By Our Reporters
DFCU has lately suffered a difficult period resulting from unflattering publicity by sections of the online media prompting its lawyers to commence steps to sue some of the offending media outlets. The Kalenge Bwanika law firm has firmly notified a number of bloggers of impending legal suits as a way of checking on the negative publicity that has kept growing. As the lawyers take that path, the DFCU management is apparently not taking a nap. Clearly having felt the pinch, the management too are doing all they can (including reaching out to UBA that unites all commercial banks) to ensure the fight back efforts can take off very comprehensively. As evidence of a situation that is increasingly becoming difficult for them, the DFCU management has used today Wednesday New Vision to a run a quarter page advert reassuring all the stakeholders that all is well notwithstanding the unflattering media exposes. The New Vision statement implies that unfounded as they are said to be, the social media reports have devastatingly hurt DFCU’s brand reputation and diminished stakeholder confidence in the bank.
The advert says the unflattering media reports should be contemptuously ignored and that the bank is sure of a certain future, the very reason its depositors shouldn’t worry. The bad media reports are bad enough in themselves but the relentless efforts by DFCU to refute them barely makes the situation any better. “The best would be to totally ignore because when you respond you prompt even those who missed the original social media reports you are reacting to go and look out for them. It also portrays a sense of nervousness which makes your adversaries chest-thump that the consequences are already being felt,” says an experienced CEO leading one of the banks that is a member of UBA. “It’s actually a catch-22 situation for my colleague Juma [Kissame the DFCU MD] because the public is sometimes too gullible to discern these social media reports.” The same CEO expressed fear that instituting civil and criminal proceedings against the offending social media outlets may not provide lasting solutions for the FDCU brand because those who are behind such reports could go underground and begin operating faceless (anonymous) social media accounts-and the damage will still be caused and in that case without any restraint. “Gloves could come off because once underground, individuals will act with no responsibility at all yet you have no means to get holds of them. I would rather you deal with bloggers who are well identified than facing something similar to what TVO is doing to the government of President Museveni.”
UBA’S MESSAGE;
In the same New Vision edition (of 10th October 2018 page 25) is another media statement by Uganda Bankers Association (UBA) reacting to the same DFCU chaos the social media influencers have created. The UBA message is clear testimony of the extent to which the social media campaign has created nervousness and anxiety not only for DFCU but for the entire banking industry. The UBA statement says that, whereas a lot of progress and recovery was beginning to be made, the DFCU chaos could reverse all these gains and potentially crash the entire banking industry which won’t be good at all for the economy. UBA describes the PR dilemma bedeviling DFCU as something that “has the potential of undermining confidence in the industry and risks triggering undesired panic with adverse consequences for the economy.” UBA then enumerates recent developments that evidence recovery and renewed stakeholder confidence in the banking industry. These include the fact that monthly bank deposits are now averaging at Shs20trn compared to previously when it stood at mere Shs14.7trn. And that the liquidity instruments (things like government bonds) have lately grown to over Shs7trn which indicates steady recovery. That the number of Ugandans opening bank accounts has rapidly been growing to the extent that over 11m Ugandans now have bank accounts compared to mere 6m of as recent as 2015. UBA statement adds that an escalation in the DFCU chaos will only undermine efforts the industry has been making to invest in ICT platforms and solutions aimed at reducing the cost of delivering financial services. The clearly disturbed UBA executives call upon all Ugandans to do what they can to de-escalate the nervousness resulting from the unrelenting DFCU crisis because “maintaining stability remains a responsibility for all of us [Ugandans] and not only the regulator and financial institutions.” This is how the UBA statement concludes: “We further count on the support of the relevant authorities to continue providing the right environment for sustained growth in the banking and financial sector.” Another Commercial bank top executive said that the timing of the chaos bloggers have created for DFCU only makes things even more complicated. “Acquisitions of the nature that DFCU took on swallowing Crane Bank aren’t easy things. They are never easy to manage because you inherit much more complex things than what seems to be the case at the time of entering the acquisition talks. And it’s even more complicated in the Ugandan market where the Crane Bank acquisition was of proportions that are almost unprecedented. It might be good for business in the long term but you need a lot of leadership stability in the short term and not a situation similar to DFCU where the MD Juma Kissame is in the evening of his contract. Simultaneously having to manage consequences of an acquisition with an MD who is on his way out isn’t a good thing for any bank’s stability,” said one of the industry watchers we spoke to for this article.
