Dfcu Bank today announced their 2019 results, posting a 21% growth in profitability from UGX60.9 billion to UGX73.4 billion.
The results, Matthias Katamba’s first full year results since he joined the bank in December 2018, are much better than 2018 when the bank posted a 66% decline in profitability- from UGX127.6 billion in 2017 to UGX61.7bn. This was largely due to a 4.7% reduction in assets from UGX3.030 trillion in 2017 to UGX2.888 trillion in 2018. Deposits also generally remained flat- falling by a minor 0.4% from UGX1.987 trillion to UGX1.979 trillion.
In the one year Katamba has been at the bank, dfcu has made a strong double-digit come-back, with lending growing by 10% from UGX1.398 trillion in December 2018 to UGX1.539 trillion in December 2019- compared to a growth rate of 4.7% in 2018.
Customer deposits also recovered, growing by 3% from UGX 1.979 trillion to UGX2.039 trillion- the first time the bank’s deposits are crossing the UGX2 trillion mark, a sign of growing consumer confidence.
Strong lending, driven by deposits growth, also saw the bank’s assets recover from a 4.7% decline in 2018, to post a 1% increase from UGX 2.916 trillion to UGX2.958 trillion, just a few billions shy of the UGX3 trillion mark.
In an interview, Katamba said: “Profitability was driven by increased efficiency as we reduced our operating costs by 4% from UGX202 billion in December 2018 to UGX193 billion in December 2019, in addition to reducing our funding costs by 7% in terms of interest expenditure from UGX105 billion to UGX97.6 billion in the same period.”
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However, shareholders are yet to smile as the board has recommended that dividends be held, pending an assessment of the full impact of Covid-19 on the economy and business operations.
“The emergence of a global pandemic COVID-19 (corona virus) has put a lot of uncertainty in the world economy. Pay out of the dividend will depend on the assessment of the full impact of the global pandemic on business operations. Suffice to say the company has consistently paid a healthy dividend over the years and will continue to do so in future,” said a board notice, published along with the results today.
Amidst the Covid-19 challenges, Katamba will have to work hard to maintain his performance record carried on from Housing Finance Bank, where in 5 years, he grew the bank’s assets by 30% from UGX597billion in 2014 to UGX777billion in 2018 and also grew profitability by 386.2% from UGX4.3 billion in 2014 to UGX21 billion in 2018.
Shareholders and consumers alike can count on his 15 years of senior banking experience gained from Barclays, Pride Microfinance, Finance Trust Bank and Housing Finance Bank to do the job.
