The synergies of the amalgamation with Vardhana Bank are starting to materialise. For the nine months ended September 30, 2016, DFCC’s profit after tax recorded a 43% growth to Rs. 2,527 million from Rs. 1,766 million with the Group posting a 32% growth to Rs. 2,692 million from Rs. 2,034 million.
DFCC’s core banking business was the main driver with net interest income up 17% to Rs. 6,231 million from Rs. 5,325 million. This was complemented by net fee and commission income, which grew by 14% to Rs. 951 million from Rs. 832 million.
Reflecting a controlled approach, the total assets of the Group grew by 12% for the nine months and stood at Rs. 277,517 million as at September 30, 2016 compared to Rs. 247,109 million as at December 31, 2015. Meanwhile, the total assets of the Group recorded a year-on-year growth of 17% compared to Rs. 236,564 million as at 30 September 2015. In terms of prudential indicators, DFCC is one of the best capitalized banks in the industry.
As at September 30, 2016, the Group Tier 1 capital adequacy ratio was 14.0% and the total capital adequacy ratio was 13.6% before considering the current year to date profit. These ratios stand well above the regulatory stipulated levels.
Close monitoring and follow up have enabled an improvement in portfolio quality as borne out by the decline in the gross non-performing loan and advance ratio to 3.9% from 4.4% during the third quarter.
This is creditable considering the substantial exposure of the Bank’s credit portfolio to higher risk project finance and term lending.
Accompanying this improvement was the decrease in the impairment allowance to Rs. 910 million from Rs. 953 million as a result of improved recoveries.
Meanwhile, on the cost side, the synergies from the amalgamated banks along with stringent cost control and efficiency measures resulted in a reduction of operating expenses by 7% to Rs. 3,296 million from Rs. 3,530 million.