Kampala, Uganda: dfcu Bank has projected a pre-tax loss of Sh26.3 billion for the first six months of 2026, reflecting continued pressure from rising operating expenses and higher loan impairment charges despite recording strong growth in customer deposits, lending and its overall balance sheet.
According to the bank’s unaudited half-year financial results for the period ended June 30, 2026, the projected pre-tax loss marks an improvement from the Sh39.7 billion loss recorded during the same period last year, although it underscores the lender’s continued struggle to return to profitability.
After accounting for an income tax credit of Sh10.5 billion, dfcu expects to post a net loss after tax of Sh15.8 billion.
The results present a mixed financial performance, with the bank continuing to expand its business while facing increasing cost pressures that weighed on earnings during the first half of the year.
Customer deposits rose by Sh410 billion, increasing from Sh2.46 trillion in June 2025 to Sh2.87 trillion by the end of June 2026. The bank said the growth reflects sustained customer confidence and has further strengthened its funding base.
Lending also recorded strong growth, with loans and advances to customers increasing by 21 percent to Sh1.44 trillion, up from Sh1.19 trillion in the corresponding period last year. The increase points to continued demand for credit from households and businesses despite prevailing economic challenges.
However, the expansion in lending was accompanied by a rise in credit risk provisions. The bank booked Sh11.8 billion in impairment allowances on loans and advances as it strengthened provisions against potential defaults while growing its loan portfolio.
Operating expenses also climbed sharply during the period, rising to Sh230 billion from Sh150.4 billion a year earlier, adding significant pressure to the bank’s profitability.
Despite the projected loss, dfcu maintained a strong financial position.
The bank’s total assets increased to Sh3.94 trillion, while liquid assets stood at Sh2.18 trillion, including Sh662.7 billion in cash and cash equivalents. Shareholders’ equity reached Sh755.4 billion, with the bank maintaining a capital adequacy ratio of 27 percent, comfortably above the minimum regulatory requirement.
Commenting on the results, dfcu Bank Chief Executive Officer Charles Mudiwa said the institution remains financially resilient and well-positioned to continue supporting customers and Uganda’s economy.
“The bank remains well-capitalised and liquid enough to continue supporting customers and financing economic activity,” Mudiwa said.
The half-year performance suggests that while dfcu continues to strengthen its market position through growth in deposits, lending and assets, restoring profitability remains a major focus for management as it seeks to contain operating costs, improve efficiency and safeguard the quality of its expanding loan portfolio.
The latest financial results come as Uganda’s banking sector continues to navigate rising operating costs, evolving credit risks and increased investment in digital transformation, even as demand for lending remains resilient.
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