Dfcu Bank has announced a significant dividend payout, totaling 6.8 billion shillings to its shareholders for the financial year ended December 31, 2023. This announcement was made during the bank’s 59th Annual General Meeting (AGM), which was held in Kampala on Thursday. The event highlighted the bank’s strong financial performance over the past year, drawing attention to the positive trajectory of its operations and financial health.
During the AGM, the Chairman of the Board at Dfcu Limited, Jimmy Mugerwa addressed the shareholders and informed them that they would receive a dividend payout of 9 shillings and 10 cents per share.
“The board has proposed a dividend of 9 shillings and 10 cents per share for the year that ended 2023,” he said.
This announcement reflects the bank’s ongoing commitment to delivering value to its investors and recognizing their continued support and trust in the institution.
The dividends for the financial year ended December 31, 2023, show a notable increase compared to the previous year. The current payout signifies a 2.1% rise from the 8.91 shillings per share paid out in 2022. This increase underscores the bank’s dedication to enhancing shareholder value and its strategic efforts to improve financial performance.
Kate Kiiza, the Executive Director and Chief Finance Officer at Dfcu Bank provided further insights into the dividend increase.
“The dividends paid for 2022 were 6.129 billion shillings. This year, the declared dividends amount to 6.808 billion shillings. What that means is that the shareholder earning per share is moving from 8.19 shillings to 9.1 shillings. For the shareholders, per every share that you hold, that is how much it has increased. Previously, you got 8.19, now you get 9.1.” she said. This increase in dividends is a clear indicator of the bank’s improved financial health and its unwavering dedication to ensuring that shareholders benefit from the bank’s growth and profitability
Performance Overview
The year 2023 marked significant achievements for Dfcu Bank, highlighting its resilience and strategic foresight. One of the major milestones was the successful increase in share capital to the new statutory limit of 150 billion shillings, accomplished well ahead of the June 2024 deadline. Remarkably, this was achieved without requiring any additional capital from shareholders, demonstrating the bank’s strong internal financial management and resource allocation.
Dfcu Bank’s financial performance for 2023 showcased its ability to maintain a robust capital position, effectively cushioning against key risks. The bank’s total capital ratio improved by 3.2%, reaching an impressive 29.5%, significantly above the regulatory minimum of 12% as prescribed by the Financial Institutions Act. This improvement highlights the bank’s strong capital adequacy and its ability to support growth and absorb potential losses.
The concerted efforts to manage credit risk during the year led to a 6% reduction in the impairment of loans and advances to customers, decreasing from UGX 88 billion to UGX 83 billion. This reduction indicates the bank’s effective risk management strategies and its focus on maintaining a healthy loan portfolio. Additionally, the total number of borrowers increased by 19%, as the bank expanded its credit outreach to more households across the country, further solidifying its position in the market.
The bank reported a 2% increase in total interest income, rising from UGX 345 billion to UGX 350 billion. This growth was driven by the bank’s strategic efforts to enhance its interest-earning assets and optimize its loan portfolio. Moreover, non-funded income saw a significant 12% increase, growing from UGX 86 billion to UGX 97 billion. This rise in non-funded income underscores the bank’s diversified revenue streams and its ability to generate income beyond traditional interest earnings.
Net profit after tax improved by 11%, increasing from UGX 31 billion to UGX 34 billion.
Interest income from government securities experienced a substantial increase, surging by 52% from UGX 86 billion in 2022 to UGX 131 billion in 2023. Additionally, investment securities saw a 7% increase, rising from UGX 902 billion in 2022 to UGX 968 billion in 2023, further enhancing the bank’s asset base.
Shareholders’ equity increased by 2%, growing from UGX 632 billion in 2022 to UGX 644 billion in 2023. The bank’s robust financial position is further evidenced by the substantial growth in its customer base, which doubled by 103%. The number of borrowers also increased by 19%, while transactions rose by 17%, indicating the bank’s expanding reach and customer engagement. Dfcu Bank’s operational network continued to grow, with the bank now boasting 2,015 agents, 78 intelligent ATMs, and 54 branches nationwide. The increase in mobile banking usage by 33% highlights the bank’s focus on leveraging technology to enhance customer convenience and accessibility. The bank remains deeply committed to uplifting the communities it serves, with a strong emphasis on impactful local initiatives and transformative programs.
Community Initiatives
With an extensive 54-branch network, Dfcu Bank has undertaken several impactful local initiatives, complemented by transformative programs such as Women in Business, Rising Woman, the SME Business Accelerator, and the Agribusiness Development Centre. These initiatives have significantly fostered the bankability of Farmer-Based Organizations (FBOs), Small and Medium Enterprises (SMEs), and Savings and Credit Cooperatives (SACCOs).
The Women in Business program aims to empower women entrepreneurs by providing them with the necessary financial resources, training, and mentorship to grow their businesses. This initiative has helped many women gain access to credit and improve their financial literacy, contributing to the economic development of their communities.
The Rising Woman initiative focuses on recognizing and supporting women who have demonstrated exceptional entrepreneurial skills and leadership. Through this program, Dfcu Bank has provided financial support, training, and mentorship to help these women scale their businesses and achieve greater success.
