Buyers tempt dfcu bank with offers
May 03, 2009
BUYERS have approached the CDC Group Plc, the leading shareholder in the dfcu Group, with offers to acquire the dfcu Bank, its manager said last week.
By Sylvia Juuko
BUYERS have approached the CDC Group Plc, the leading shareholder in the dfcu Group, with offers to acquire the dfcu Bank, its manager said last week.
Actis, a private equity investor in emerging markets, manages the CDC Group Plc’s 60.02% stake in the dfcu Group.
The dfcu Bank is a wholly-owned subsidiary of dfcu Limited.
Dr. Nkosana Moyo, the Group board chairman, explained that the vast interest was driven by the bank’s robust performance.
“Actis is a financial investor. Its business is to make investments and at the appropriate time to sell these investments.
“Approaches have been made concerning dfcu but Actis has chosen not to pursue any of these,†Moyo said.
He did not disclose who the investors were.
Moyo was speaking during dfcu Limited’s annual general meeting at the Kampala Serena Hotel last week.
He was reacting to a shareholder’s query, regarding reports that a Nigerian bank was interested in purchasing a stake in the dfcu Bank.
“You will appreciate that this is a shareholder issue and not a board issue. We are aware of the rumours that have circulated in the market.
“In preparation for this AGM, we consulted with shareholders to find out whether there was any truth behind the rumours and that is Actis position,†he said.
The market has been awash with reports of that the United Bank of Africa, a Nigerian bank, eyeing a majority stake in the dfcu Bank. The dfcu Group posted a 54% rise in net profits to sh13.1b last year, up from just sh8.5b in 2007, while customer deposits grew 56% to sh255b, up from sh163b, the previous year.
Total assets grew by 30% to sh496b, lending assets by 23% to sh283b, while investments in government and other securities went up by 20% to sh120b.
While operating income grew by 27%, the Group’s cost to income ratio fell from 73% in 2007 to 58% in 2008 as a result of continuous efforts to increase revenues and improve operational efficiencies.
For this performance, the shareholders will earn a dividend of sh21.13 per share, up from sh13.09 in 2007.
Juma Kisaame, the dfcu Bank managing director, said the integration of dfcu Limited’s business stream into the bank had been completed.
“We are now more efficient, which explains why our cost to income ration dropped from 73% to 50%. We want to bring it down further,†he said.
He said the bank would invest in a robust information technology platform to further increase operating efficiency.
“We carry out stress test on our portfolios. We are carefully continuing to grow business without undue adverse impact on the balance sheet,†Kisaame told the shareholders.
He said while the global economic crisis would impact on areas like donor flows and remittances, the bank was in a strong position to mitigate the effects.
“The fundamentals of the business segment we support are sound.
“Our approach is to understand and monitor their activities so that we come up with mitigation if it’s needed,†Kisaame explained during the meeting.
BUYERS have approached the CDC Group Plc, the leading shareholder in the dfcu Group, with offers to acquire the dfcu Bank, its manager said last week.
Actis, a private equity investor in emerging markets, manages the CDC Group Plc’s 60.02% stake in the dfcu Group.
The dfcu Bank is a wholly-owned subsidiary of dfcu Limited.
Dr. Nkosana Moyo, the Group board chairman, explained that the vast interest was driven by the bank’s robust performance.
“Actis is a financial investor. Its business is to make investments and at the appropriate time to sell these investments.
“Approaches have been made concerning dfcu but Actis has chosen not to pursue any of these,†Moyo said.
He did not disclose who the investors were.
Moyo was speaking during dfcu Limited’s annual general meeting at the Kampala Serena Hotel last week.
He was reacting to a shareholder’s query, regarding reports that a Nigerian bank was interested in purchasing a stake in the dfcu Bank.
“You will appreciate that this is a shareholder issue and not a board issue. We are aware of the rumours that have circulated in the market.
“In preparation for this AGM, we consulted with shareholders to find out whether there was any truth behind the rumours and that is Actis position,†he said.
The market has been awash with reports of that the United Bank of Africa, a Nigerian bank, eyeing a majority stake in the dfcu Bank. The dfcu Group posted a 54% rise in net profits to sh13.1b last year, up from just sh8.5b in 2007, while customer deposits grew 56% to sh255b, up from sh163b, the previous year.
Total assets grew by 30% to sh496b, lending assets by 23% to sh283b, while investments in government and other securities went up by 20% to sh120b.
While operating income grew by 27%, the Group’s cost to income ratio fell from 73% in 2007 to 58% in 2008 as a result of continuous efforts to increase revenues and improve operational efficiencies.
For this performance, the shareholders will earn a dividend of sh21.13 per share, up from sh13.09 in 2007.
Juma Kisaame, the dfcu Bank managing director, said the integration of dfcu Limited’s business stream into the bank had been completed.
“We are now more efficient, which explains why our cost to income ration dropped from 73% to 50%. We want to bring it down further,†he said.
He said the bank would invest in a robust information technology platform to further increase operating efficiency.
“We carry out stress test on our portfolios. We are carefully continuing to grow business without undue adverse impact on the balance sheet,†Kisaame told the shareholders.
He said while the global economic crisis would impact on areas like donor flows and remittances, the bank was in a strong position to mitigate the effects.
“The fundamentals of the business segment we support are sound.
“Our approach is to understand and monitor their activities so that we come up with mitigation if it’s needed,†Kisaame explained during the meeting.