Dfcu had in the last five years experienced steep declines in profits due to substantial growth in impairments, provisioning, and write-offs. Photo / File
On Tuesday, dfcu managing director Charles Mudiwa referenced a line that was hard to ignore.
Dfcu, he said, had come out of the woods and had now regained its high growth trajectory, which would soon deliver it back into Uganda’s top five most profitable banks.
He was responding to a question from a journalist who wondered whether dfcu had now regained its growth momentum.
"Yes, we (dfcu) have come out of the woods, and we are now focusing on driving the growth of the bank. This is why we are talking of being among the top five banks in a few years from now,” he said during the presentation of the bank’s financials for the year to December 2024.
Of course, his reference “to coming out of the woods” had been drawn from the troubled times when and after dfcu acquired defunct Crane Bank.
The acquisition, which had at first come with a substantial increase in profits, eventually turned chaotic, with dfcu recording substantial declines in profits due to exponential growth in bad loans and write-offs inherited from Crane Bank.
In January 2017, dfcu – the year in which it acquired Crane Bank assets - registered a surge in profits from Shs23b to Shs114b.
However, in 2018, the profits declined to Shs60b but recovered to end 2019 at Shs73.4b.
The profit position, however, collapsed in 2020, declining to just Shs24b before declining further to Shs9.3b in 2021.
But in 2022, the bank recovered to register a marginal increase to Shs29.47b and Shs28.72b in 2023, and closed 2024 with a substantial profit growth to Shs72b.
The growth, Mr Mudiwa said, had been achieved through continuous operational improvements and a reorganisation of the bank’s top managers, who, he said, had started performing well, thus “positioning the bank to do well in a few years”.
Mr Charles Mudiwa was himself appointed in April 2023 as dfcu managing director. Photo / File
In the last two years, dfcu has effected various changes among top managers, appointing Kate K Kiiza in August 17, 2023 as the executive director and chief corporate and institutional banking officer, Ms Annette Kiconco, chief retail banking officer (May 2024), Ms Margaret Karume and Hope Lorna Nakhayenze, as chief credit officers (May 2024 and March 2025, respectively) Ms Maryann Wanjiku Michuki, chief business solutions and marketing officer (April 2024) and Musa Musazi as chief technology, digital and operations officer.
The team above, including Mr Mudiwa, who himself was appointed in April 2024, has delivered dfcu, according to the managing director back on the growth trajectory and is now looking ahead to 2025 and beyond to “grow stakeholder value with innovative solutions, inclusivity and empowering people”.
To consolidate the growth, he said, focus will be on developing sector specialisation, customer intimacy, and sector ecosystems and emphasizing digital and data-driven performance.
Ms Kate K Kiiza was appointed in August 17, 2023 as the executive director and chief corporate and institutional banking officer. Photo / File
The new focus will seek to achieve a 20 percent return on equity, a cost-to-income ratio in mid 60s, and delivering the bank among the top five banks in profit after tax by 2026.
The bank will, therefore, enhance its focus on agriculture and manufacturing, among the eight priority sectors, in which it will provide credit to spur growth.
During the year ended December 2024, dfcu registered a profit after tax of Shs72b, which was a 51 percent growth from the Shs28b posted in 2023.
While presenting the bank’s financial results, dfcu acting chief financial officer Ms Rebecca Birungi, said the bank’s income had grown to Shs361.56b from Shs349.64b in 2023, which was a 4 percent increase, largely due to a surge in loan interest and government debt income.
Ms Birungi said the bank registered Shs269.32b, up from Shs259.7b, from interest income due to increased business activity from growth in both physical and online customer transactions.
The bank also registered a decline in impairment losses on loans to Shs12b from Shs82.71b in 2023 due to continued focus on the rehabilitation of its non-performing loans portfolio, increased portfolio monitoring, which saw non-performing loans reduce from 9.5 percent to 4.4 percent in 2024.
Dfcu also recorded a modest growth in customer deposits to Shs2.35 trillion from Shs2.31 trillion, while total assets grew to Shs3.46 trillion from Shs3.2 trillion in 2023.
However, shareholders’ equity rose to Shs704.25b, up from Shs644b, which was a 9 percent growth as a result of the increased net loans and advances to customers and government securities, while operating expenses grew to Shs286b from Shs245b.
The performance, therefore, saw the bank propose a dividend payout of Shs15b, which would return earnings per share of 20.09, an improvement of the Shs9.1 paid in 2023.
