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DTB Profits Grow amidst Banks Recapitalization Saga

By Francis Otucu

Diamond Trust Bank (DTB)’s profits grew by 22.7% in 2018, sending good vibes to its customers. Financials released by the bank indicate that DTB’s increase in profit was mainly due to prudent management that saw the reduction in Non-Performing Loans (NPLs) from Shs40bn in 2017 to Shs27bn in 2018, meaning NPLs reduced by Shs13bn.

Figures seen by The Second Opinion show that commercial banks recorded double digit growth in net profits in financial year 2017-2018, with huge reductions in their NPLs.

The bank saw bad loans written off reduce to Shs26.27bn, down from Shs35.7bn recorded in 2017. The bank’s total expenditure also reduced to Shs145.14bn down from Shs157bn.

However, DTB’s total income reduced to Shs163.59bn in 2018, down from Shs172.2bn recorded a year earlier. The results also show that the bank was cautious with its lending; loans advanced to customers reduced to Shs534.18bn, down from Shs623bn in 2017.

Customer deposits also slightly reduced to Shs1.14 trillion down from Shs1.16 trillion recorded a year earlier. The bank’s total assets increased to Shs1.6 trillion up from Shs1.54 trillion in 2017. The bank’s conservative approach which resulted to low loan growth also meant that deposits dropped marginally by 2 percent. Due to prudent fund management, Net Interest Income of the Bank grew by 4% from Shs92.34bn to Shs96.18bn. Operating income has also grew by 5% to Shs128.55bn from Shs122.83bn the previous year. Retained earnings increased by 45 % from Shs79.68bn in 2017 to Shs115.62bn in the last financial year.

With the news coming at a time when government has run to Parliament seeking approval of Shs620.7 billion for the planned recapitalization of Bank of Uganda and five other banks over deficits and losses accumulated since 2013, financial institutions seeking bailouts can pick a leaf.

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