DFCC continues to aggressively pursue its role as a commercial bank by strengthening its core business, the company said in a stockmarket filing.
The DFCC Group comprises DFCC Bank PLC (DFCC), and its subsidiaries - Lanka Industrial Estates Limited (LINDEL), DFCC Consulting (Pvt) Limited (DCPL) and Synapsys Limited (SL), the joint venture company - Acuity Partners (Pvt) Limited (APL) and the associate company - National Asset Management Limited (NAMAL).
For quarter ended March 31, 2018, the DFCC Group recorded a profit before tax of Rs. 1,545 million and profit after tax of Rs. 1,110 million as compared to Rs. 1,647 million and Rs. 1,301 million respectively in the comparative period in 2017.
The Bank reported a profit before tax of Rs.1,493 million and a profit after tax of Rs. 1,074 million compared to Rs. 1,593 million and Rs. 1,267 million in the comparative period in 2017, a drop of 6% and 15% respectively.
CEO, DFCC Bank, Lakshman Silva said, “The overall performance of the quarter indicates that DFCC Bank is well positioned to serve the nation as a commercial bank through a range of financial services that will promote wealth creation across the country.”
The Bank recorded a growth of 17% in total operating income amounting to Rs. 4,093 million for the quarter ended March 31, 2018 compared to Rs. 3,503 in the comparative period in 2017. However, due to the higher charge for impairment as a result of Bank’s prudent provisioning policies, the net operating income recorded a growth of only 4%.
The Bank’s NPL ratio increased to 3.12% as at March 2018 from 2.77% recorded in December 2017 as a result of adverse environmental conditions in the operating environment.
During the current period, net interest income grew by 29% to Rs. 3,342 million from Rs. 2,581 million in the first quarter of 2017 while net fee and commission income grew by 27% to Rs. 434 million from Rs. 343 million in the comparable period. Interest margin improved to 4.0% during the quarter under review.
Operating expenses increased from Rs. 1,343 million to Rs. 1,579 million (18%). Other comprehensive income before tax improved by Rs. 1,475 million (86%) over the previous period.
Total assets of the Bank grew by Rs. 67,236 million year-on-year, a 24% growth compared to March 2017. The growth in total assets from December 2017 was Rs. 18,393 million (6%).
Continuing the growth strategy, Bank’s Loans to and receivables from other customers (Loans and advances) grew by Rs. 35,475 million to Rs. 222,588 million.
The deposit base increased by Rs. 56,925 million (40%) from Rs. 143,625 million in March 2017 to Rs. 200,550 million as at March 31, 2018. The Bank’s low cost deposits (CASA) ratio was 19.6% compared to 21.3% as at December 31, 2017.
The Bank has successfully issued BASEL III compliant Tier II listed rated unsecured subordinated redeemable debenture of Rs. 7 billion (oversubscribed on opening day) in order to sustain the planned lending growth and to maintain stable Basel III compliant ratio.