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Shareholders concerned as dfcu Bank expenses grow over Court battle with Sudhir Ruparelia

By Executive Editor

info@kampalagazette.com

Shareholders of dfcu Bank are concerned over increasing expenses.

Kampala Gazette has understood that between 2022 and 2023, dfcu Bank’s expenses grew to Shs 114 billion, up from Shs 85 billion.

During last year’s Annual General Assembly (AGM) held at Serena Hotel in Kampala, the shareholders tasked the Bank to explain what was causing the increase in expenses.

The Shareholders were concerned that without a cut in spending, the Bank was not anywhere to being profitable.

However, dfcu Group General Manager explained that the increase in expenses was partly due to the on-going court battle between dfcu Bank and defunct Crane Bank in the United Kingdom.

Overall, however, the bank performed well in 2022, with a 56% improvement in net profit to Shs29.3bn in the first six months to June 30 driven by a reduction in loan impairment.

The lender’s financial results released on Aug. 24 show continuous growth in performance owed to aggressive loan collections and recoveries and intensified portfolio management that enabled it to deliver a 33% reduction in loan impairment and advances.

The results further indicate that the bank booked new business and grew its non-funded income by 25% with the mass customer acquisition done over the period.

On the balance sheet side, the lender’s liquid assets grew by 20% to Shs1.9tn in the first six months of 2023 from Shs1.5tn in the same period of 2022.

Growth in liquid assets was boosted by a 2% increase in customer deposits, an 8% growth in shareholders’ equity, and a 16% reduction in loans and advances.

Overall, total assets grew from Shs3.2tn in the first six months of 2022 to Shs3.3tn in the same period this year.

Key to note is that, whereas loans and advances to customers dropped by 16% to Shs1.1tn in the first six months of 2023 from Shs1.3tn in the same period last year, the total number of borrowers served grew by 11% over the period, as the bank increased its lending to individuals and businesses across the country.

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