dfcu Bank is set to pay a final dividend of UGX 6.8 billion to its 3,851 shareholders by August 31st after the Board of Directors made a final approval at the Annual General Meeting held at Hotel Africana on Thursday this week.
Speaking on behalf of the Board of Directors, Mr Jimmy Mugerwa, the Chairman Board said the bank upheld a strong tradition of shareholder returns, proposing a dividend of UGX 9.10 per share for 2023 which represents a 2.1 percent increase from the UGX 8.91 per share distributed in 2022, underscoring our unwavering commitment to enhancing shareholder value.
Mr. Mugerwa urged the shareholders to update their account details and mobile money contacts in anticipation for the dividend payments.
dfcu Limited is a holding company of dfcu Bank listed on the Uganda Securities Exchange with a market capitalization of UGX 168 billion. The current share price of dfcu is UGX 225, and is expected to rise according to Mugerwa.
A snapshot of the financial results
dfcu Bank Managing Director, Mr. Charles Mudiwa said the Bank recorded an 11 percent improvement in net profit after tax from UGX 31 billion to UGX 34 billion and will continue to pay dividends to shareholders.
The company also recorded a 2 percent increase in total interest income from UGX 345 billion to UGX 350 billion and a 12 percent increase in non-funded income from UGX 86 billion to UGX 97 billion driven by a significant recovery on the fair value asset due to the bank’s revamped recovery strategy.
The bank also registered an increase in the total number of customers from 1.4 to 1.86 million mainly driven by its active participation in the Parish Development Model (PDM) program where the government is a key partner to the bank and a 17 percent increase in transaction volumes, including a 33 percent uptake of the bank’s digital banking offerings, especially mobile banking.
dfcu Chief Financial Officer, Kate Kizza noted that the stock of financial investment government securities increased by 4 percent from UGX 949 billion in 2022 to UGX 987 in 2023 with the increase being part of the bank’s liquidity management strategy to take advantage of the rising interest rates in the market.
The Bank’s liquid assets also increased by 8 percent from UGX 1.6 trillion in 2022 to UGX 1.7 trillion in 2023, providing a cushion against economic downturns, unexpected expenses or revenue fluctuations.
“This financial buffer enhanced the Group’s resilience to external shocks, making it better equipped to meet short term obligations without financial strain,” Kiiza said.
However, the customer loans and advances dropped by 17 percent from UGX 1.3 trillion in 2022 to UGX 1.1 trillion in 2023 due to management’s cautious approach to credit extension.
The Bank’s total number of borrowers have continued to grow, increasing by 19 percent as the Bank expanded its credit outreach to more households across the country.
The Group’s deposits decreased by 4 percent from UGX 2.4 trillion in 2022 to UGX 2.3 trillion in 2023. The Bank noted that the deposits were also impacted by increasing costs, with the market facing liquidity shortages.
Renewed focus
With one of the most extensive distribution networks across the country, dfcu holds the 3rd largest network with 54 branches across the country and holds the number one positions in Kampala and Wakiso, with 28 branches, increasing our competitive advantage.
This is supported by a good agent banking spread of more than 1500 Agents across the country and 77 ATMs nationwide.
The dfcu Chief Retail Banking Officer Annette Kiconco said the bank is set to open more branches and increase its Agents to 2000 before close of the year, and to 3000 by first quarter of 2025.
“We continue to optimise our physical distribution to ensure our customers can find us wherever they need us,” Kiconco noted.
Looking ahead, Kiconco explained that the dfcu Retail Banking Division is dedicated to leveraging innovative and relevant banking solutions to meet its clients’ evolving needs.