The board of DFCU bank has recommended that no dividends should be extended to the shareholders after registering a drop in profits of shs 11 billion last year.
George Ochom, the banks general manager said the board saw it wise not to disburse any funds to the shareholders so that it can keep the financial institutions with liquidity and manage any possible crisis.
The bank’s profits fell from shs 24 billion to 13 as compared to previous years, revealed Mathias Katamba, the Chief Executive Officer.
“DFCU bank like some other players in the market experienced a drop in profitability by 45% in 2021. However, the bank posted most of its income from earnings on interest on loans, but almost experienced a wipeout of this income due to provisioning for bad loans that accrued in the wake of the Covid 19 crisis,” Katamba said.
The shareholders of DFCU bank include Arise BV (58.70%), Investment Fund for Developing Countries (9.97%), National Social Security Fund of Uganda (7.46%) and Kimberlite Frontier Africa Naster Fund (7.3%).
The drop in profits has been attributed to the Covid-19 pandemic that crashed economies and businesses across the globe.
Unlike DFCU, some of its competitors have managed to register growth in profits.
At the beginning of the week Stanbic Uganda Holdings Limited (SUHL) announced it grew its net profits by 11% in 2021 to earn UGX269billion from Ush.242billion in 2020, driven by robust growth in non-interest income earned by mostly Stanbic Bank Uganda Limited, its anchor subsidiary.