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Dfcu profits have dropped from Shs78bn in 2017 to Shs62bn in 2018
Dfcu profits have dropped from Shs78bn in 2017 to Shs62bn in 2018

Dfcu Profitability Drop Blamed on Crane Bank Fraudulent Takeover

According to the Bank's half-year financial results released on Wednesday, Dfcu Bank’s 2018 profit has fallen by 51.6% amidst falling deposits and incomes.
posted onMarch 29, 2019
nocomment

By Max Patrick Ocaido

Dfcu Bank has registered a profit fall to Shs62bn in 2018 from Shs78bn in the previous year, with the bank blaming the turbulence associated with Crane Bank.

According to the Bank's half-year financial results released on Wednesday, Dfcu Bank’s 2018 profit has fallen by 51.6% amidst falling deposits and incomes.

The profitability fall has been attributed to the high costs of maintaining and running the acquisition of defunct Crane Bank. Dfcu controversially bought Crane Bank at Shs200bn after Bank of Uganda put it into receivership in 2016.

Reports show that after Crane Bank takeover, Dfcu assets increased by 67% having risen from the worth of Shs1.8trn to Shs3trn. However, following the COSASE probe that exposed Bank of Uganda and Dfcu on the fraudulent sale and takeover of Crane Bank, deposits and incomes have since dropped as customers continue to shun the Bank with deposits declining by 0.4% from Shs1.987 trillion in 2017 to Shs1.979 trillion in 2018.

Further reports also indicate that one year after taking over Crane Bank, Dfcu suffered a huge liquidity crisis that as a result curtailed lending registering just a mere 4% growth from Shs1.334 trillion to Shs1.393 trillion in 2018. Dfcu's half-year financial results also indicate that the Bank’s assets declined by 4.6% from Shs3 trillion to Shs2.88 trillion and as a result, the Bank in 2018 experienced a 21% decline in income from Shs519.8 billion to Shs410.6 billion.

This also caused a nosedive in net profit from Shs127.6 billion to Shs61.7 billion. The fall in profits has in turn affected the dividends shared by the shareholders after a 51.6% fall as dividends reduce from Shs51 billion to Shs24.7 billion. Arise BV is the majority shareholder in Dfcu bank with 58.71% after lending US $50 million in February 2017. The money was to help Dfcu Bank meet its short-term capitalisation needs after it controversially took over Crane Bank in January 2017.

“We did not take over ‘the best performing’ institution so we have to continue cleaning up until we stabilize,” Mathias Katamba, Dfcu Managing Director said.

Dfcu also blamed the nosedive on its profitability on the COSASE probe that put BoU on the spotlight thus affecting the entire banking sector. In accordance with section 119 of the Financial Institutions Act 2004, Dfcu Bank last week released a list of over 7000 dormant accounts that have remained inactive for over 5years.

CHECK FULL LIST OF DFCU DORMANT ACCOUNTS

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