By DailyNewsUG Correspondent,
Development Finance Company of Uganda Bank Limited commonly known as DFCU business performance is in doldrums.
DFCU’s Banks net profit fell 46% for the year 2021 to Shs13.2billion. This is the lowest profit ever recorded in more than a decade since 2008 when it earned Shs13.1billion.
The lender’s NPL increased from Shs94billion in 2020 to Shs274billion in 2021 as a result of negative impacts of the coronavirus pandemic.
In addition, the bad debts written off increased from Shs13.9billion to Shs37.5billion as loan exposures increased from Shs 351billlion to Shs 480billion during the same period.
dfcu bank, which recorded a consistent growth in profits in the past years, suddenly started to record a slow growth following acquisition of the defunct Crane bank assets in 2017. This is because some the loans that the lender took over from Crane Bank transactions have never been recovered.
dfcu’s Crane bank acquisition boosted its profitability only in 2017 with net profit nearly tripling to Shs127billion, up from Shs46.27billion in 2016 and Shs 37billion in 2015. But this was short-lived.
The lender’s profit slowed to Shs60.9billion in 2018 before raising to Shs 73.4billion in 2019. However, in 2020, the profits declined to Shs 24bn.
Katamba says with the full reopening of the economy and the economic activity expected to bounce back with real GDP projected to grow by 6%, the lender is expected to record profit growth.
“We also expect demand for credit to return as businesses recover and reposition for growth,” he said. “We will continue to focus on the growth of our retail business, supporting businesses and individuals in the post covid recovery during 2022, in addition to building resilience in our loan book through rehabilitation and debt recovery programs.”