DFCU’s pretax profit dropped 48.68% to Ugx25.63 billion in the first six months of 2022 due to a 104.56% jump in impairment allowances to Ugx75.06 billion.
According to International Accounting Standard (IAS) 36, impairment losses are the amount by which the carrying amount of an asset or cash-generating unit exceeds its recoverable amount.
The carrying amount is the amount at which the cash generating unit is recognized in the balance sheet after deducting accumulated depreciation and accumulated impairment losses.
Dfcu bank’s profit after tax (PAT) lost 51.63% to Ugx18.78 billion to bring down Earnings per share (EPS) to Ugx25.10 from Ugx51.89 for the six months to June 2021.
Despite the declines, total revenue increased 5.67% to Ugx187.39 billion and operating expenses were flat at Ugx85.2 billion compared to Ugx85.47 billion in June 2021. Dfcu’s operating income before impairment improved 16.23% to Ugx100.69 billion.
The balance sheet showed that total assets reduced 1.86% to Ugx3.29 trillion while total liabilities declined 1.49% to Ugx2.68 trillion. Loans advanced to customers fell 16.03% to Ugx1.40 trillion while customer deposits edged up 2.31% to Ugx2.44 trillion.