INTERVIEW: dfcu’s Mathias Katamba talks resilience and innovation in 2019 and a cautious 2020 Today, dfcu Bank published their 2019 results, posting a 21% growth in profitability from UGX60.9 billion to UGX73.4 billion. Across board, most of the bank’s fundamentals showed a double-digit improvement, putting the bank back on a growth trajectory after a bumpy 2018. In this interview, adopted from the bank’s results, that were published today, Mathias Katamba shares some facts behind the figures.

How was 2019 for dfcu Bank?

In 2019, we steered the organisation through another year of success and growth; the operating environment was generally positive with a few challenges along the way, dfcu continued to demonstrate resilience and market leadership in the various segments that we serve. We delivered robust growth in the business and witnessed increased uptake of the Bank’s products and services year on year. Our stakeholder engagement across the multiple value chains of business and community also increased as we made a meaningful contribution towards the social-economic transformation of households and communities where we serve.

Based on the financials, you certainly had a good year. What are the key highlights of your performance?

Net profitability has increased by 21% from UGX60.9 billion in 2018 to UGX73.4 billion in 2019 with the return on equity ratio increasing by 2 percentage points from 12% to 14% during the period. Net Loans and Advances to Customers increased by 10% from UGX1.398 trillion in December 2018 to UGX1.539 trillion in December 2019 with a 3% growth in Customer Deposits from UGX 1.979 trillion to UGX2.039 trillion and a 1% increase in total assets from UGX 2.916 trillion to UGX2.958 trillion during the year.

What were the key drivers of this growth?

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. This gave rise to a 4% growth in net operating income from UGX306 billion in December 2018 to UGX319 billion in December 2019 and set the Bank on a solid footing to further harness institutional capabilities going forward.

In what ways did dfcu Bank positively impact the economy?

Over the years, dfcu has contributed towards social-economic transformation in the various sectors of the economy where we serve including; agriculture and agribusiness, trade and commerce, education, health, manufacturing, tourism, real estate, energy, construction, transport, communication, community, personal and households. A significant part of our business is dedicated to long term development finance with more than twenty percent funding to the agribusiness sector and this will continue to grow year on year given that the majority of Ugandans are directly employed in the agriculture sector and agriculture provides a significant part of national export revenue.

There has been a lot of talk about digitization in the financial sector. How has dfcu Bank faired so far in this space?

During the year, we deployed key digital solutions that were geared towards improving the all-round customer experience – and further enhanced our capacity to be a digitally-driven organisation in line with our strategic aspiration of becoming the next generation bank in Uganda. We deployed the Investment Club app which revolutionized the management and administration of group savings that had previously been a key bottleneck to their growth as highlighted by the members and also rolled out the next generation intelligent ATMs that now make it possible for customers to do much more at the ATMs including instant deposits, transfers, and payments. Additionally, we partnered with a leading telecommunications company to provide mobile money escrow services and shall continue to engage key players to drive innovation and co-creation along the customer journey.

How do you see the outlook for 2020?

We are cognizant of the ongoing global COVID-19 pandemic that may adversely impact the operating environment by majorly disrupting global supply chains, transport, and travel. However, with guidance and support from our board, strong management team and dedicated staff, we remain focused on driving efficiency to harness institutional capabilities growth. We shall continue to build a digitally-driven organization that reaches the mass market and key segments of our business in a cost-effective manner and shall provide market leadership to drive social-economic transformation in the communities where we serve. We thank our customers and stakeholders for yet another great year with us and look forward to your continued engagement to deliver value and make more possible.