DFCC Bank records PAT Rs 4,415 m in 2017 | Sunday Observer

DFCC Bank records PAT Rs 4,415 m in 2017

Lakshman Silva
Lakshman Silva

Despite a backdrop of higher taxes, volatile interest rates, tight margins and intensifying competition, DFCC Bank closed the financial year ended 31 December 2017 with a profit before tax of Rs 5,792 million a growth of 31% and profit after tax of Rs 4,415 million a growth of 34% over the year ended 31 December 2016.

The Bank’s net interest income rose by 27%, to Rs 11,343 million improving the net interest margin from 3.3% in 2016 to 3.6% in 2017. In addition, the Bank’s net fee and commission income grew by 22% to Rs 1,591 million, while it recorded a growth in most of its income segments with a 25% increase in total operating income year-on-year.

DFCC has been recognised by S&P and the international rating outlook has been revised to “stable” from “negative” while maintaining ratings at B/B. This was closely followed by Fitch who also upgraded DFCC’s international and long term outlook from “negative” to “stable” while maintaining the international & domestic ratings at B+ and AA- .

The Bank’s financial position saw the total assets of the Bank grow by Rs 43,047 million (15%) during year 2017 mainly from Rs 27,891 million growth in loans and receivables. Total loans and receivables was Rs 213,676 million compared to Rs 185,785 million as at 31December 2016.

The Bank’s deposit base reported a substantial increase of 38% from LKR 140,514 million in 2016 to LKR 193,308 million in December 2017. The Bank’s low cost deposits (CASA) ratio increased to 21.3% from 20.2% in 2016. This was aided by a successful drive to increase the current and savings base in the retail banking space with a range of innovative products and services, an aggressive sales force and an expansion of delivery channels which contributed to enhanced business volumes.

During the year, the Bank relocated many branches to more customer friendly locations with enhanced facilities.

The Bank’s CASA deposits increased by LKR 9.4 Bn during the 4th quarter whilst the Bank continued to enjoy long term concessionary credit lines which improved the ratio from 21.3% to 30.1% as at December 2017.

The Net loss from financial instruments at fair value through profit and loss from other operating income increased mainly due to the marked to market impact and volume increase in foreign currency swaps year-on-year, which is managed through the higher interest income from increased lending of advances funded through swaps.

Chairman Royle Jansz said, “The fundamentals have been put in place for stable, sustainable growth and the bank has set itself a challenging target over the next three years. Good corporate governance is a cornerstone of the bank’s policy and governance has been strengthened.”

CEO DFCC Bank Lakshman Silva said, “DFCC’s future outlook is positive as the Bank’s growth drivers are delivering results.

The Bank’s key focus areas are enhancing operational efficiencies, strategic investments, notably in technology, IT systems and solutions and increasing our penetration into markets across the country.”

DFCC Group recorded profit before tax of Rs 5,891 million in 2017.