Commercial Bank equity sale helped profit at DFCC Bank
View(s):DFCC Bank, the largest entity within this banking group, has recorded an increase in pre-tax profit and post-tax profit of 11 per cent and 1 per cent, respectively (by end September 2018) compared to the previous corresponding period.
This is however after adjusting for the exceptional gain from the sale of Commercial Bank equity shares reported in the previous period, despite substantially higher impairment and taxation provisions, the bank said in a media statement.
“The reported pre-tax profit of Rs.3,792 million and post-tax profit of Rs. 2,530 million reflects a decline of 13 per cent and 26 per cent respectively compared to the corresponding period in 2017 after the exceptional gain is accounted for,” it said.
Group pre-tax profit of Rs. 4,036 million and post-tax profit of Rs. 2,693 million was recorded for the nine months ending September 2018 as compared to Rs. 4,377 million and Rs. 3,391 million respectively, in the comparative period in 2017.
The bank recorded a healthy growth of 22 per cent in Net Interest Income to Rs. 10,020 million from Rs. 8,228 million mainly as a result of the net portfolio growth of Rs. 40,725 million in loans and receivables year-on-year and the prudent management of asset and liability re-pricing.
DFCC said it continued to penetrate the market by extending its branch network, conducting extensive business promotions including a new savings campaign, and by investing in innovative products and IT system modernisations that have contributed towards expanding delivery channels and improving service deliverables. The bank added seven-fledged branches to its branch network during the nine months’ period.
“The impairment provision during the period increased to Rs. 1,898 million compared to Rs.1,017 million in the comparable period. However, recovery processes are being rigorously pursued to minimise any actual losses that may arise from such exposures,” the release said.
DFCC CEO Lakshman Silva said 2018 has been a year where the bank did some crucial changes in terms of structure and processes in order to ensure that “we have a strong foundation in place as we keep growing as a fully-fledged commercial bank.”
Despite the worsening trend in NPL, DFCC managed to maintain its NPL ratio below industry average and increase its net interest margins he said, adding: “The bank is investing heavily in our digital capabilities, keeping pace with the Fintech developments in the market.”