Dfcu Bank has announced its financial results for the first half of fiscal year 2024, reporting an improved performance in Net profit after tax, which increased by 45% to Shs42 billion in June 2024 from Shs29 billion in June 2023.
Half-Year Financial Highlights:
Net profit after tax increased by 45% to Shs42 billion in June 2024 from Shs29 billion in June 2023. This growth is attributed to significant reduction in credit losses from loans and advances, owing to sustained recoveries efforts
It was also attributed to reduction in the interest expense cost as a result of a deliberate effort to balance the bank’s deposits drivers and growth in fees and commission arising from the increase in transacting customers year on year
Compared to the full year 2023, this performance was an increase of Shs13.6 billion, a 48% growth year on year.
Net loan loss provisions decreased significantly by 114% from a loss of Shs50 billion in June 2023 to a credit of Shs6 billion in June 2024. The decrease resulted from management’s efforts to reduce the non-performing loans and diversify the portfolio thereby lowering the concentration risk.
Management continues to closely monitor the non-performing loans to rehabilitate them and make recoveries. The current strategy resulted in the reduction of the non – performing loans ratio from 15.2% in June 2023 to 5.2% in June 2024.
The bank’s asset base increased by Shs6.5 billion from Shs3,158 billion in December 2023 to Shs3,164 billion in December 2024. The growth was mainly attributed to the increased investment in government securities that registered a growth of 4% (Shs36.5 billion), a strategy by management to diversify earning assets given the cautious approach to credit risk during the first half of the year.
The Company’s deposit base remained flat at Shs2,319 billion in June 2024 from December 2023. Management continues to drive a balance in the bank’s deposit mix, keeping interest costs within target.
Shareholders’ funds grew by 6% from Shs644 billion in December 2023 to Shs684 billion in June 2024 arising from the increase in retained earnings at half year.
The Company remains well capitalized with capital ratios of 29% and 30% for core and total capital respectively. Liquidity position remains strong with an average liquid assets ratio above 40%. Considering this robust liquidity and healthy capital position, management is optimistic that the Company is well positioned for future growth and higher financial performance.
