The COVID-19 pandemic negatively impacted economies across the globed and in Uganda affecting many sectors and livelihoods in different ways. Despite that, dfcu Limited weathered the storm and for the most part recorded positive performance for 2020.
“While the impact of the pandemic affected our business operations, the Bank demonstrated resilience in the face of adversity and our core business remained strong and continued to grow year on year. We are therefore pleased to announce the proposal to pay dividends to our Shareholders,” the company says in a statement.
Total revenue remained relatively stable year on year despite the impact of the pandemic and a declining interest rate environment.
Loan provisions increased by 107% and impairment of the financial asset rose by 400%, to reach 50 Billion consequently posting a net profit for the year of 24 Billion. The Financial asset is composed of non-performing loans that were taken over from the 2017 transaction.
The Group reported an 18% asset base increase from UGX2,958 billion to UGX3,499 billion, upheld by strong growth in liquid assets and loans and advances.
The deposit base grew by 27% from UGX2,039 billion to UGX2,595 billion which was attributed to both newly acquired and existing clients across the business segments.
The company maintains that it remained well capitalized with capital ratios of 19.34% and 20.94% for tier one and two capital respectively. Liquidity position remained strong with an average liquid assets ratio above 35%. Considering this robust liquidity, strong equity shareholders and healthy capital position, the Board has recommended a dividend payout to the shareholders.
Safety measures
As a responsive business, dfcu says it recognized the challenges occasioned by the Covid-19 pandemic and took the following measures to ensure safety and business continuity;
1. Reduced / removed charges on the use of digital channels.
2. Enhanced the alternative channels functionality and increased our digital footprint.
3. Provided credit relief to customers with loan restructures, rescheduling and repayment holidays.
4. Provided support to businesses and households with new and additional funding.
5. Supported the National COVID Taskforce with items in cash and in kind.
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dfcu extended support to personal, Small and Medium Enterprises across the country with credit funding and advisory services especially on business continuity, in addition to providing credit relief in terms of loan reschedules, restructures and repayment holidays.
“We continue to provide this relief as part of enabling customers to ‘Restart and Thrive’ post the 2020 pandemic. Furthermore, customers who suffered job loss and had credit facilities were provided with insurance payments to meet their loan obligations. Our overall provision of credit to various sectors of the Economy resulted in a 15% growth in net loans and advances to customers,” the company says.
The Outlook
Over the years, dfcu says, as a company, it has made significant investments to shore up institutional capabilities that enabled us to navigate the pandemic and its resultant effects.
“Our endeavor to play an active role in transforming the economy and enhancing the well-being of people is in line with the efforts of economic recovery in the new normal environment.
“Even though challenges remain for a number of sectors, we remain committed to supporting small and medium scale enterprises, advancing the cause of women in business, supporting key sectors of the economy in Agriculture, Manufacturing, Trade, Construction, Communications and Services. We have also laid the foundation to play an active role in the emerging Oil and Gas Sector,” the company states.
Facts and Figures:
• Net loans and advances to customers grew by 15%.
• Customer Deposits grew by 27%.
• Total assets increased by 18%.
• Proposed dividend of UGX50.33 per share.
