Dfcu to pay dividends after two years 

Dfcu Limited has announced a dividend of Shs 8.19 per share less withholding tax to be paid out to its shareholders for the year ended December 31, 2022, two years after the financial institution last declared such a reward.

Jimmy Mugerwa, the chairman of dfcu Limited, announced the dividend during the bank’s annual general meeting at Kampala Serena hotel last week. He explained that the bank had not issued out a dividend due to the low business volumes witnessed during the Covid-19 pandemic.

He added that the regulatory requirement for commercial banks to maintain a minimum paid-up capital of Shs 120bn, up from Shs 25bn, had also denied the financial institution to issue a dividend.

“The hard economic times brought about by the Covid-19 period affected us and we are not able to make enough profits to give out dividends. But most importantly, was that Bank of Uganda wanted all banking institutions to add onto the required capital to operate and we had to look for Shs 120bn before December 31, 2022. We, therefore, had to retain all the money
so that we can have the required capital amount in that time frame and we did this without a need for any more capital injection by the shareholders,” Mugerwa said.

According to George Ochom, Dfcu Limited general manager, shareholder funds grew by six per cent to Shs 632 billion in 2022 from Shs 594 billion in 2021 as result of the increase in retained earnings.

“Our shareholders will continue to see improved performance from the company, especially in 2022 where we saw our earnings grow. Our earnings per share rose from Shs 12 in 2021 to Shs 39 in 2022.”

The majority shareholders of Dfcu Limited are Arise BV with 58.7 per cent, Investment Fund for Developing Countries (IFU)
with 10 per cent, NSSF with 7.6 per cent, Kimberlite Frontier Africa Master Fund with 7.36 per cent and over 3,800 individual shareholders.

The dividends will be paid out by August 30, 2023, to shareholders who will have their names on the shareholders’ register as of August 9, 2023.

During the same meeting, the bank also released its annual report for the year 2022, which showed improved financial performance. The company’s key performance indicators progressed in terms of credit risk management and overall earnings.

Net profit after tax increased by 217 per cent to Shs 29.5bn, from Shs 9.3bn. Impairment on loans reduced by 41 per cent from Shs 148bn in 2021 to Shs 88bn in 2022, while total assets grew by three per cent from Shs 3.13 trillion to Shs 3.24 trillion.

Customer deposits increased by six per cent while interest expenses on deposits reduced by nine per cent as the bank focused on growing current and savings deposits while the bank saw a 15 per cent growth in the number of borrowing customers.

“Our business remains very strong and our trading subsidiary dfcu bank has consistently maintained strong capital ratios,” Mugerwa said.

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