ONE ON ONE: dfcu Bank CEO Mathias Katamba explains the good half year results and how the bank is supporting economic recovery Despite the ongoing COVID-19 pandemic, dfcu Limited posted good financial performance in the first half of 2021 with consolidated net profit after tax increasing by 33% from UGX 29.1 Billion in June 2020 to UGX 38.8 Billion in June 2021. Considering the challenges in the business environment and slow economic recovery, the company focused the first half of the year on maintaining an optimal balance between supporting our customers to recover and financial performance. The extension of the credit relief program by the Central Bank enabled us to prolong the provision of relief in terms of restructures and repayment moratoriums to customers whose businesses have been impacted by the pandemic. “Looking forward, we will continue to execute on our strategic priorities, invest for growth, and accelerate our digital transformation to deliver on our commitments to our customers and shareholders, while ensuring the safety of our customers and staff. “Further improvements in operational efficiency combined with cost optimization in the second half of the year will help us further improve our performance,” the Company says.

In this one-on-one, the bank’s Chief Executive Officer Mathias Katamba talks about the good performance, how the bank is supporting economic recovery and what the customers should expect while doing business with dfcu.

What is your assessment of the operating environment for period under review?

The first half of the year has been mixed, characterized by a second wave of COVID-19 infections with new variants and the lockdown that was instituted to curb the rising pace of infections across the country and the resultant strain on the health sector. On a positive note, the economy continues to show signs of recovery with the GDP estimates for financial year 2020/21 closing at 3.3% which was higher than projections earlier in the year of 3.1% driven primarily by stronger household consumption. The financial year 2021/22 is expected to show even stronger growth especially if vaccinations pick up and other critical sectors of the economy are opened.

How did dfcu Bank perform considering the challenging environment?

Despite challenges in the operating environment, dfcu consolidated net profit after tax increased by 33% from UGX 29.1 Billion in June 2020 to UGX 38.8 Billion in June 2021. This upside in profit performance was driven by a 23% growth in net income. In terms of financial positions, we continued to shore up liquidity given the uncertain environment with a 2.6% increase in liquid asset holdings. Due to the constricted economic activity, the Bank took a conscious approach to credit growth resulting in net loans and advances to customers reducing by 4.1%. The marginal drop in customer deposits was a result of the deliberate move to minimise the cost of funds as we continued to gradually release the expensively priced deposits. On the other hand, the impact of the restrictions and slow pace of activity reflected on our customers as the provisions for loans and advances to customers increased from UGX 8.7 Billion in June 2020 to UGX 36.7 Billion in June 2021.

What is dfcu Bank doing to galvanize support for customers, communities and the economy to recover?

We continue to provide relief in terms of restructures and repayment moratoriums to customers whose businesses have been impacted by the pandemic. More than 45% of our customers have received some form of credit relief to date. As a mechanism to further promote access to credit for small business and households, we started deployment of our mobile loan solution to our consumer banking customers and leveraged our customer relationship management to provide new and additional funding to business customers. At the national level, we continued to engage with stakeholders in key sectors of the economy in the areas of Oil and Gas particularly, to promote the participation of customers in the local content component. We continue to sponsor the Best Farmer initiative which promotes the use of best practices in agribusiness in conjunction with our partners. The Bank also continues to support Savings groups and SACCOs (Savings and Credit Cooperative Organizations) through capacity building programs and small farmer-based groups through our Agricultural Development Centre. Our staff have shown that, regardless of the circumstances, they will go over and above to support our customers, communities, and one another. We are providing tailored support across our footprint to help them manage through the pandemic.

What should customers and stakeholders expect?

Our efforts will continue to focus on driving efficiency of operations and harnessing our digital investments to sustain customer ease of doing business with us. We will also continue to play our role of ‘making more possible for our customers’ by providing much needed funding to support both individuals and business to recover. The pandemic is still with us for some time, so the health and safety of our customers and staff will continue to be a priority as well.