DFCU, currently Uganda’s second largest bank, following its 2017 takeover of Crane Bank has released its half-year financial statements indicating a fall in profit margin from Shs114bn in December 2017 to Shs41bn as of June 30, 2018.
This Shs72billion shortfall represents a decline of about 63 percent in profits. The bank also suffered a drop in interest expenses from Shs64.3bn to Shs53.4bn during the period.
With an asset portfolio of Shs3trillion after acquiring the assets and some liabilities of Crane Bank, DFCU registered an increase in customer deposits by 10 per cent from Shs1.8trillion to Shs2trillion.
Even if the profits came down, the effect of having acquired Crane Bank on the cheap can still be felt as the Shs41bn made in the first half of 2018 are good results compared to 2016 before the Crane Bank take-over. In the entire 2016, DFCU made Shs45bn.
In the statement signed by the bank’s chairman Elly Karuhanga, DFCU says they carried out a fair valuation exercise of assets acquired from Crane Bank in January 2017, resulting into a fair value gain of Shs121.85 billion that was recognised in the results ending June 2017.
In trying to explain the the 63 per cent profit drop compared to the same period last year, DFCU Bank says consolidated profits for the six months ended June 30, 2018 “normalised” following the integration of the acquired net assets of Crane Bank.