Kampala — The acquisition of Crane Bank in January 2017 is one of the major factors why dfcu is now Uganda's largest bank, by profitability.
In its 2017 half year results, the bank revealed an after-tax profit surge of Shs114b, compared to Shs23b over the same period in 2016.
In a statement issued on Tuesday, dfcu confirmed that the profitability was driven by the acquisition of Crane Bank assets.
"The performance is largely attributed to the January 2017 acquisition of Crane Bank assets and assumption of liabilities by dfcu Bank that presented numerous opportunities in line with dfcu's growth aspirations," said the bank in a statement.
According to Mr William Sekabembe, the executive director, dfcu, the assets brought in terms of loans and advances, contributed to a rise in interest income for the bank. The asset base expanded to Shs3 trillion in part because of the customer loan growth by 55.5 per cent to Shs1.3 trillion. This led to the increment in interest income - the largest contributor to the total income of the bank.
"dfcu took over Crane Bank so that it can make more profit and this reaffirms that customers can easily get their money and transact the same way prior to the takeover," he said.
Furthermore, they also grew their deposit base from Shs 1.1trillion to Shs1.8 trillion, which they were able to leverage and increase on their lending.
Dfcu acquired some of the assets and liabilities of Crane Bank in January 2017. Crane Bank had been taken-over by Bank of Uganda (BoU) after its capital had fallen below the minimum requirement set by the regulator. Dfcu acquired all cash, deposits, loans and advances, furniture and branches. However, the bank did not acquire insider loans, related company loans, any shareholder liabilities and taxes among others.
Dfcu discloses Shs68bn as being expenditure on acquisition of the cash and balances of Crane Bank.
The results also indicated a decline in non-performing loans ratio from 6.6 per cent to 5.5 per cent which Mr Kisaame believes will reduce even more with time generating profits for the bank.
"With the economy set to grow by 5 per cent in 2017-2018, with increase in new infrastructure, the oil and gas sector all show signs of development, I expect the bank to keep making more profits," he said.
Dfcu bank seeks to move from a niche bank to a universal bank serving many purposes to society implemented through its digital strategy. So far, Shs72 billion ($20m) has been set aside to cater for this movement.
Mr Sekabambe said the bank will put in place strategies to mitigate the increasing cyber-crimes.
Of the Shs114b profit, Shs55b has been attributed to the revaluation of the assets and liabilities of Crane Bank.