Company profile: Dfcu Group & dfcu Bank

At the end of 2015, Dfcu bank was Uganda’s sixth-largest bank, with assets of Shs1,651.63bn. The recent acquisition of the insolvent Crane Bank – whose assets of Shs1, 794.34bn at the end of 2015 made it the fourth-largest bank – means it is much larger, although its true size won’t be known until it releases its financials or the forensic audit into Crane Bank is released.

Dfcu became a commercial bank in 2000 after taking over and renaming Gold Trust Bank. But it had operated in Uganda since 1964, when it was set up by the Uganda government and the Commonwealth Development Corporation (CDC) of the United Kingdom, as a development finance institution, to provide long time financing to small and medium enterprises.

The Development Finance Company of Uganda Limited, as it was known then, was not spared the upheaval of the 1970’s and 1980’s. It scaled down operations between 1974 and 1985, and at one point employed only two clerical staff. In 1994, took over the Uganda Leasing Company and started leasing, developing property, and offering mortgages on top of its original mission. It added general banking services in 2000 after acquiring Gold Trust Bank.

The company became the sixth equity to list on the Uganda Securities Exchange in 2004 as part of government’s public enterprise’s divestiture programme (the government believed that listing on the stock market would increase the level of participation of Ugandans in the privatisation process).

Before the IPO, the development finance arm of the UK government, CDC group, was the majority shareholder in Dfcu Limited with a 60% while the Uganda government and the International Finance Corporation – the World Bank’s private sector arm – had a 40% stake.

Following the IPO, the major shareholders were CDC (through Actis Capital LLP) with 60%, NSSF with 10%, Norway’s Norfund with 10%, and the general public with 20%.

In 2008, Dfcu merged its two businesses – development finance and Dfcu bank – under Dfcu bank.

The company’s shareholding changed in 2013, with CDC reducing its shareholding – which had been managed by Actis – from 60% to a directly managed 15%. The multinational financial services provider, Rabobank, acquired a 27.54% stake while Norfund increased its holding to 27.54%, making the two institutions the biggest shareholders in the bank. The partnership with Rabobank was to enable Dfcu extend banking services to rural areas, promote food security, and provide financing to the agriculture sector.

Dfcu purchased the loss-making Global Trust Bank from the central bank in 2014, which had taken over its management and revoked its licence.

The bank says it focuses on small and medium enterprises, and is one of the few institutions that provides SMEs with long-term funding. Its focus sectors are education, construction, manufacturing, and agribusiness. It hopes to become the leading player in the agribusiness sector by 2018, partly through leveraging its relationship with Rabobank, the second-largest agriculture lender in the world.

723 (at the end of 2015)

Key People

Name Title
Elly Karuhanga Non-Executive Director/Chairman, dfcu Limited
Jimmy D Mugerwa Non-Executive Director/Chairman dfcu Bank
Mathias Katamba Chief Executive Officer, dfcu Bank
James Mugabi General Manager and Company Secretary, dfcu Limited
Agnes Tibayeita Isharaza Company Secretary, dfcu Bank

Largest Shareholders (as at 31 December 2015)

Investor Equity stake
Rabo Development B.V 27.54%
NORFINANCE AS (Norfund) 27.54%
CDC Group PLC 15.00%
National Social Security Fund 5.93%
Kimberlite Frontier Africa Naster Fund 3.76%
National Social Security Fund-Pinebridge 1.09%
Others 17.11%