Dfcu declares dividend despite drop in profits

Wednesday March 31 2021
fin03pix

The bank posted an increase in loans and advances, which rose by 15 per cent while customer deposits grew by 27. PHOTO | FILE

By Ismail Musa Ladu

Despite a tough year that forced a drop of more than 60 per cent of dfcu’s profitability, the bank yesterday said it will pay shareholders a dividend. 

The bank, Mr Mathias Katamba, the dfcu chief executive officer, said Covid-19, despite putting in place tight and prudent risk management measures, had taken a hit in the period ended December 2020. 

According to the bank’s financial results for the year ended December 31, 2020, dfcu noted a profit decline of nearly 67 per cent, which it said would have been worse, considering the immeasurable toll due to Covid-19 and the general outlook of the economy. 

“We cannot say we had a good time in a bad year, but we can say we needed to put controls and measures in place to allow us prepare for post recovery as we engaged the sector,” Mr Katamba said, noting they had re-evaluated and made proactive adjustments to the business model in regard to managing risks and business continuity.  

During the period, dfcu registered a sharp decline in profits to Shs24b from Shs74b for the year ended December 2019, which was blamed on an increase in loan provision and impairment. 

However, the bank posted an increase in loans and advances, which rose by 15 per cent while customer deposits grew by 27. 

Advertisement

Total assets increased by 18 per cent while the bank said it will, with the approval of the Central Bank, pay out Shs50.33  per share. Mr George Ochom, the dfcu general manager, they had put together Shs37.7b to cater for the pay out. 

In her presentation, Ms Kate Kiiza, the dfcu chief financial officer, said total revenue remained relatively stable while loan provisions increased by 107 per cent. Impairment of financial asset rose by 400 per cent, to reach Shs50b, consequently eating into the bank’s profitability.

Advertisement