DFCU Limited has reported a loss after tax of 15.768 billion Shillings for the six months ended June 30, 2026, largely due to provisions set aside for the ongoing legal battle arising from the acquisition of assets and liabilities of the defunct Crane Bank.
The announcement comes a day after the company notified shareholders, prospective investors and the market that its half-year financial statements would reflect a loss, mainly because of provisions made for court cases.
The loss does not reflect weak business performance. Instead, it stems from a one-off accounting provision required to cover potential liabilities and legal costs associated with the high-profile litigation linked to the controversial 2017 Crane Bank transaction. Despite the reported loss, DFCU’s underlying business remained strong during the first half of 2026.
The bank recorded net income of 215.6 billion Shillings, up from 199.6 billion Shillings in the corresponding period of 2025, when it posted a net profit of 34 billion Shillings. Total assets increased to Shillings 3.94 trillion from Shillings 3.53 trillion, while customer deposits rose to Shillings 2.87 trillion from Shillings 2.457 trillion over the same period.
Non-interest income grew by 35 per cent to63.2 billion Shillings, while the ratio of non-performing assets improved significantly to 3.3 per cent from 5.6 percent.
The reported loss was driven almost entirely by the long-running legal dispute in London over claims that the Crane Bank acquisition was irregular, including allegations that the assets were undervalued by the Bank of Uganda.
The dispute dates back to January 2017, when the Bank of Uganda took over Crane Bank, citing undercapitalisation and concerns over the safety of depositors’ funds. The central bank subsequently sold selected assets and liabilities to DFCU Bank in a process that was later criticised by analysts and a parliamentary inquiry as rushed and irregular.
Crane Bank’s former majority shareholder, Sudhir Ruparelia, together with Crane Bank Limited (in liquidation), challenged the transaction, arguing that the Bank of Uganda acted unlawfully and sold the bank’s assets below their true value.
Following a ruling by Uganda’s Supreme Court against the Bank of Uganda in a related domestic case, Crane Bank’s shareholders filed a £170 million (more than 800 billion Shillings) lawsuit in the High Court in London against DFCU Bank, DFCU Limited and several former executives. The claim alleges that DFCU conspired with officials from the Bank of Uganda to acquire Crane Bank’s assets at a substantially reduced price.
DFCU sought to stop the case, arguing that English courts had no jurisdiction over decisions taken by the Ugandan government. However, both the UK Court of Appeal and the UK Supreme Court dismissed those arguments, allowing the case to proceed to a full trial in London. The litigation has significantly increased the bank’s legal expenses and potential financial exposure. Legal costs rose from 42.3 billion Shillings in 2024 to 76.6 billion Shillings in 2025.
In the first half of 2026, international accounting standards required DFCU to recognise a provision to cover potential court liabilities and future legal expenses. This one-off provision effectively wiped out what would otherwise have been a profitable half-year performance.
Meanwhile, DFCU’s financial performance since acquiring parts of Crane Bank in 2017 has fluctuated considerably. In 2017, the bank’s profit after tax surged to127 billion Shillings, up from 46.3 billion Shillings in 2016, as the acquisition made DFCU the country’s second-largest bank by assets after Stanbic Bank.
Between 2018 and 2020, annual profits stabilised at between 60 billion Shillings and 70 billion Shillings. However, profitability declined sharply thereafter as the bank grappled with inherited non-performing loans, reputational challenges and rising legal costs related to the London proceedings.
In 2021, profit after tax fell to 9.3 billion Shillings, largely because non-performing loans increased from 94 billion to 274 billion Shillings as inherited distressed loans matured during the COVID-19 pandemic.
The bank gradually recovered, posting profit after tax of 29.5 billion Shillings in 2022 and 34 billion Shillings in 2023 as restructuring efforts began to bear fruit, although litigation costs continued to weigh on earnings.
Between 2024 and 2025, new management implemented measures to strengthen the bank’s performance, including expanding digital banking services and increasing lending to small and medium-sized enterprises.
These initiatives boosted profit after tax to 72.1 billion Shillings in 2024, representing growth of 115 per cent, before rising further to 74.9 billion Shillings in 2025. However, legal costs associated with the London case reached 76.6 billion Shillings in 2025, highlighting the growing financial burden of the litigation.
DFCU Bank Managing Director Charles Mudiwa said the bank’s core operations remain healthy and profitable, with strong performance across all business segments. He said the reported half-year loss was driven entirely by the exceptional, one-off provision made to account for the significant costs and potential liabilities arising from the London court case-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
