KAMPALA – Another top official has announced resignation from dfcu Ltd, the company that runs dfcu Bank, which has continued to attract industry scrutiny in the aftermath of the controversial takeover of Crane Bank.
Dr. Winfred Tarinyeba Kiruabwire, in a notice published by dfcu Ltd lawyers in the newspapers on Friday, announced that she had left her role as non-executive director with immediate effect.
“She resigns due to another commitment she’s due to undertake in another regulated entity,” reads the notice published by dfcu Ltd lawyers Ligormac Advocates.
The notice indicated that the board was in the process of nominating another director to fill the role.
The development comes at the backdrop of published financial results of the dfcu Bank that showed a reduction in profits by a whopping 51%. It also comes less than three weeks after an official, the dfcu Bank’s company Secretary Agnes Tibayeita Isharaza crossed to NSSF, capping another troubled week for the bank.
After a bumper harvest in 2017 following the controversial takeover of Crane Bank, dfcu Bank has now recorded a whopping a 51.6% drop in its 2018 profits after tax, which fell to UGX 61.7bn from UGX 127bn, registered the previous year.
In annual financial statements published this week, the drop in income means that shareholders will receive less than half the dividends received in the last financial year.
“The Board is recommending a cash dividend of UGX33.01 per share less withholding tax where applicable” a dfcu Group financial statement accompanying the bank’s statement and signed by Chairman Elly Karuhanga read.
In 2017, shareholders received a dividend of UGX 68.24 per share.
The drop in shareholders’ dividends is because only UGX 24.7b was set aside to be shared amongst them compared to 2017’s UGX 51b.
To make matters worse for dfcu shareholders, the value of their shares has witnessed a 28.8% drop from UGX 970 on July 17, 2018 to UGX 670, a price at which they were trading on the stock exchange on March 27, 2019.
The drop is partly attributed to negative public opinion generated by dfcu Bank following the controversial takeover of Crane Bank, with top investors pulling out and senior staff exodus in the aftermath.
The dfcu Bank had in 2017 experienced exponential growth from UGX 46.2bn in 2016 to UGX 127bn after taking over Crane Bank, but 2018 was a downward spiral.
Customer deposits declined by 0.4% from UGX 1.987 trillion to UGX 1.979 trillion in 2018.
2018 also saw assets declining by 4.6% from UGX 3 trillion to UGX 2.88 trillion.
The resultant effect was 21% decline in income from UGX 519.8 billion to UGX 410.6 billion, which affected the bottom-line.
Financial analysts say that figures have proved that the 2017 take-over of Crane Bank was a windfall for dfcu Bank and they predict that performance will soon fall to pre-acquisition levels.
“dfcu Ltd posted a total comprehensive income of UGX 60.8 billion which was lower than last year that included a one off item of UGX 119 billion which arose from a business combination,” dfcu Bank reports in it’s 2018 published results.
A financial analyst noted:
“dfcu (Bank) has hit rocky waters writing down former Crane Bank loans by UGX 82 billion. After being catapulted by the ill fated Crane Bank acquisition for a paltry Shs 200 billion. At its core it needs a revamp of its personal banking business to grab some market share from Standard Chartered and Barclays bank,” an analyst wrote in the wake of the 2018 results.