Don’t Give Us Fake Excuses Over Your Incompetence, Cough Our Money-Shareholders Task dfcu Bosses

Don’t Give Us Fake Excuses Over Your Incompetence, Cough Our Money-Shareholders Task dfcu Bosses

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By Spy Uganda

Kampala: Earlier this year, Dfcu Bank announced that its shareholders will have to wait longer before they think of getting dividends for the year 2021 as the bank struggles to preserve capital.

According to the bank’s latest audited financial results published recently, the bank’s overall profitability for 2021, was considerably affected by the loan impairments, which drained the bank’s productivity.

In its report, the bank reported that impairment losses shot up by 382 per cent from Shs 30.6 bn to Shs 148.3 bn, in 2020. This compelled the profit margins to drop from Shs 24.3 bn to Shs 13.3bn in 2020. Profit margins gauge the degree to which a company or a business activity makes money essentially by dividing incomes by revenues. The institution’s value losses on loans arose mainly from the financial assets acquired from the former Crane Bank in 2017.

The bank also reported a marginal drop in customer deposits from Shs 2.5 trillion to Shs 2.2 trillion in 2020. The bank further wrote off loans worth Shs 37.5bn, reflecting an approximately 170 per cent rise compared to 2020. To avert the write-off, the bank said it took a cautious approach to lend during the period, giving priority to specific sectors that demonstrated resilience during the pandemic.

Now, the above results seem to have annoyed shareholders who have since asked the bank to pay their dividends without any excuse citing that other banks have already paid their shareholders.

According to our source, a section of over 250 shareholders especially those owning over 519 million shares amounting to 15% on Thursday this week, during the virtual AGM wondered why the bank for the third consecutive year is not paying the dividends for the year ending 2021.

“Why are you not declaring the dividends for 2021 I have shares in other banks but they have all declared the dividends tell us why have decided not to pay us?” Betty Nabutto, one of the shareholders asked while attending virtually.

In response, George Ochom, the dfcu General Manager said that financial constraints are stopping them from paying.

“As you may recall in 2019 and 2020, we were stopped by Bank of Uganda from paying discretionary including dividends. But for 2021, were constrained by lack of funds, remember most of our finances come from our financial arm, the dfcu bank yet some of our large local corporates were affected by delayed receivership of contractual payments,” he said

Bank of Uganda 2020 suspended all dividend and bonus payments by financial institutions as it sought enough capital to support the economy. The suspension was however waived and banks in June 2022 resumed paying dividends but for dfcu shareholders, it’s still read in news.

“There is no way you can convince us that you cant pay yet your colleagues are paying yet you are in the same institution,” a disgruntled shareholder said.

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