EXCLUSIVE: An interview with Mathias Katamba, on why he is leaving dfcu Bank and his next moves

Mathias Katamba has been dfcu Bank Chief Executive Officer since 2018 and has led the bank through probably its toughest time in its 58-year history.

Mathias Katamba, the outgoing Managing Director and Chief Executive Officer of Uganda’s dfcu Bank, has spoken to CEO East Africa Magazine, confirming he is exiting the bank, which he has headed since December 2018.

In an exclusive interview with this reporter, Katamba, a banker with over 23 years of experience, said he was quitting for what he called “personal reasons” and that his departure had been “mutually agreed with the board”.

“It is true that I will be leaving dfcu bank at the end of January, after what has been four interesting years,” he told CEO East Africa Magazine, adding: “My decision is based on personal reasons, which I have discussed and agreed with the board accordingly.”

Asked why he is leaving the bank at a critical time when it is emerging from the turbulence that followed the controversial acquisition of the defunct Crane Bank, Katamba said, “It is not in my DNA to work forever in one place. I have done my part and I believe it is time to move on”.

“Let me take this opportunity to thank my colleagues, the board, and the customers that enabled us to through, dfcu Bank, to transform lives and businesses, by making more possible,” he added.

Katamba joined dfcu Bank in December 2018, after Juma Kisaame, the architect of the troubled January 2017 Crane Bank acquisition was forced out of the bank at the end of 2018. 

Katamba has managed to work through a tough operating environment to restore confidence in the business and with it, some growth as well.  

For example, deposits grew by 15.3% from the UGX1.98 trillion that he inherited in 2018 to UGX2.59 trillion at the end of 2020. Lending grew by 8% from UGX1.4 trillion to UGX1.8 trillion in the same period. However, the increased costs-to-income ratio, as well as increased provisioning for bad debts, led to erratic profits performance.

During this period profit, increased from UGX61.7 billion in 2018, to UGX73.4 billion in 2019, before slipping to UGX24.1 billion at the end of 2020. 

In 2021, the bank went back to the drawing table and took strategic measures to cut costs and improve efficiency.

The measures, among others, involved reducing the quantum of high-cost fixed deposits as well as rationalising its lending, to focus on high-yielding and high-impact loans, which although it led to a reduction of the loan book by 15%, led to a 40% increase in borrowing customers. Although it led to a 12% reduction in customer deposits, the decision to move out of expensive fixed deposits also resulted in a UGX 29 billion saving in interest expenses for the year 2021.

Except for the reduction in lending and deposits which subsequently affected asset growth, other bank fundamentals grew in 2021. 

“In 2021, we delivered strong top-line growth with a 21% increase in operating income, from UGX304 billion to UGX368 billion driven by a 17% increase in net interest income and a 35% increase in non-interest income. We also achieved a 26% reduction (UGX29 billion) in interest expense and improved operational efficiency as demonstrated by a significant improvement in the cost-to-income ratio from 63% to 49%. This was achieved mainly by the rationalisation of our business operations and increased use of digital platforms,” Katamba said. 

Mr. Katamba, has during his time at dfcu Bank also had a chance to lead the Uganda Bankers Association and hold other industry leadership positions. He says his future remains grounded in transforming lives, through affordable financing.

He however said that this efficient performance was pulled back by a tough operating environment dominated by the sticky effects of the Covid-19 pandemic. 

He explained that dfcu Bank by its very nature and foundation has a legacy of significantly supporting a number of indigenous businesses in the high-impact areas of retail and trade, construction and real estate as well as education and hospitality and tourism, all of which were hit hard by the pandemic. 

“A few customers with large exposures experienced tough covid related business challenges and the bank had to make higher than anticipated provisions for loans and advances. This resulted in an increase in the impairment of loans and advances of 384% or UGX 118 billion which consequently resulted in a decline in profit after tax from UGX24 billion in 2020 to UGX9 billion in 2021,” he said, adding: “Otherwise, our pre-provisioning profit i.e. profit before provisions, fair value losses and tax grew significantly by 67% from UGX114 billion in 2020 to UGX190 billion in 2021.”

“I am grateful for the team that I worked with in these four years to stabilise dfcu Bank against the various waves. I am happy, I am leaving the bank in a good place to continue its next phase of growth and transforming lives and businesses in Uganda,” he said.

“I am also eternally grateful to God and my Board, for the opportunities that I have been afforded, including leading dfcu through probably its most challenging times in its 58-year history,” he said. 

Asked where he will be heading after dfcu, Katamba says that he is still passionate about transforming lives through affordable and inclusive finance.

“As a person and given my personal background and upbringing, I am still passionate about the power of education and affordable financing in uplifting and transforming lives. I have seen that work for me and several other households and clients I have served in my 23 years banking career. My future and the future of our country lies here,” he said. 

“Uganda is at the cusp of great things, especially with the discovery of oil and gas. There are also vast opportunities and gaps in serving the underserved segments of our population,” he said, without delving into the details of his next move. 

Who is Mathias Katamba?

Prior to dfcu, Katamba was the Managing Director of Housing Finance Bank which he led through a major transformation in its digital offering, customer experience and turnaround in financial performance. Before that, he was Co-founder and Managing Partner of Progression Capital Africa, a Private Equity Fund providing capital and technical support to micro-finance institutions in Uganda, Kenya, Tanzania, Rwanda and Zambia.

He also previously served as CEO of Finance Trust, transforming the institution from a Microfinance deposit-taking Institution (MDI), to acquiring regulatory approval for a Tier 1 Commercial Bank license. He also previously held various positions at Orient Bank Limited (now I&M Bank Uganda).  PostBank Uganda, Barclays (now Absa), and Pride Microfinance. 

Katamba was until mid-2022, the Chairman of the Uganda Bankers’ Association. He is a Board Director at UAP Old Mutual Uganda, Chairman, Central Broadcasting Services and a member of the Presidential CEO Forum. He has also previously served as the Chairman of the Uganda Institute of Bankers, Chairman/National President of the Association of Microfinance Institutions in Uganda (AMFIU), Member of the Investment Committee of the Deutsche Bank Global Commercial Microfinance Consortium, Member of the Steering Committee for Client Protection (SMART Campaign) at the Center for Financial Inclusion and Director at the Private Sector Foundation in Uganda. 

He has completed the Advanced Executive Leadership training from Strathmore Business School (Strathmore University Kenya) in conjunction with the IESE Business School and Lagos Business School Nigeria. He has also completed Executive Leadership courses at the  Harvard Kennedy School (Harvard University) and the Wharton Business School (University of Pennsylvania).

He holds a Postgraduate Diploma in Public Relations from the Chartered Institute of Public Relations, a Master of Science in Financial Management from the University of East London and a Bachelor of Arts in Economics from the University of Greenwich.

Tagged: Dfcu Bank Mathias Katamba TOP BANKS in Uganda

Source: CEO East Africa

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