DFCU scoops Shs 127 billion net profit after taking over Crane Bank

Slightly more than a year after taking over Crane Bank, DFCU reported a huge profit of Shs127.6 billion in the year that ended on December 31, 2017.

This means that its profit margin increased by Shs 81 billion considering that in the same period last year, it recorded a profit of Shs 46 billion.

According to the bank’s financial statement, the bank registered good results in all major areas apart from the Non-Performing Loans (NPLs) portfolio.

NPLs increased by Shs38.3billion to Shs96.6billion in 2017, up from Shs58.3billion in 2016.

The bank’s total revenue expenditure also increased to Shs350.8billion in 207, up from Shs197.6billion in 2016.

Boosted by the take-over of Crane Bank that brought more high net customers, the bank’s loan portfolio increased to Shs1.3 trillion, up from Shs 834.8bn.

Customer deposits also increased to Shs1.98 trillion in 2017, up from Shs1.13 trillion a year earlier.

The bank’s total assets increased to a record Shs3 trillion, up from Shs1.7 trillion in 2016.

DFCU acquired Crane Bank in January 2017, for literally a song.

The agreement does not state the value of assets and liabilities assumed by DFCU, legal experts say, neither does it indicate the amount of money paid by DFCU.

This could expose the DFCU shareholders to legal challenges by shareholders of Crane Bank. Already some of the shareholders of Crane Bank are lining up a suit to challenge what they deem as “unfair terms” under which the bank was taken.

Who owns DFCU?

According to documents tendered in court, among the shareholders of DFCU are staff of Bank of Uganda through the central bank’ staff retirement benefits scheme. These own 0.59%.

Analysts say this is intriguing considered the bank’s central role in the sale of Crane Bank.

The biggest shareholder DFCU is Arise BV with 58.71%. Arise BV comprises Rabo Development from the Netherlands and NorFinance from Norway.

DFCU is also partly owned by the Commonwealth Development Corporation (CDC) a British government-owned company whose stake is  9.97%.

Uganda’s National Social Security Fund (NSSF) owns 7.69%; Kimberlite Frontier Africa Naster Fund 6.15%; SSB-Conrad N. Hilton Foundation 0.98%; Vanderbilt University 0.87%; Blakeney Management 0.63%; retail investors 11.19% and 2,000 undisclosed institutional investors who own 3.22%.