By Kampala Post Reporter
Diamond Trust Bank Uganda has registered a 22% growth in its profits before tax in 2018 compared to the previous year.
According the audited results released last week, the bank’s profits before tax in the last financial year grew to Shs18.45 Billion compared to Shs15.12 the previous year.
Industry watchers say the bank’s positive results could be an indicator that the sector and the economy as a whole is on recovery path after several years of slowdown. The news comes with a sigh of relief to Uganda’s banking industry which is on a recovering trail from the hard economic times experienced in the previous year.
Commercial banks have now started to record surge in profits amid drops in Non-Performing Loans (NPLs). DTB’s financial statements indicate that the increase in profit was mainly due to prudent management that saw the reduction in Non-Performing Loans (NPLs) from Shs40bn in 2017 to Shs27bn in 2018. This means NPLs reduced by Shs13bn.
Available statistics from the Ministry of Finance shows that commercial banks recorded double digit growth in net profits in financial year 2017-2018, with huge reductions in their NPLs. However, financial analysts remain cautious arguing that it is early days before banks can start celebrating about getting back on their feet.
The bank also saw bad loans written off reduce to Shs26.27bn, down from Shs35.7bn recorded in 2017. The bank’s total expenditure also reduced to Shs145.14bn down from Shs157bn. However, DTB’s total income reduced to Shs163.59bn in 2018, down from Shs172.2bn recorded a year earlier. The results also show that the bank was cautious with its lending; loans advanced to customers reduced to Shs534.18bn, down from Shs623bn in 2017.
Customer deposits also slightly reduced to Shs1.14 trillion down from Shs1.16 trillion recorded a year earlier. The bank’s total assets increased to Shs1.6 trillion up from Shs1.54 trillion in 2017. The bank’s conservative approach which resulted to low loan growth also meant that deposits dropped marginally by 2 percent.
Due to prudent fund management, Net Interest Income of the Bank grew by 4% from Shs92.34bn to Shs96.18bn. Operating income has also grew by 5% to Shs128.55bn from Shs122.83bn the previous year. Retained earnings increased by 45 % from Shs79.68bn in 2017 to Shs115.62bn in the last financial year.