Being the first bank to release its interim results for the December quarter, DFCC Banks said that its nett profit for the period rose to Rs.630 million compared to the 566 million in the same period last year. The Bank's non-audited consolidated profit after tax for the 9 months ended 31 December 2010 was Rs 6,616 million compared with Rs.1,327 million in the 9 months ended 31 December 2009.This includes an exceptional profit contribution of Rs 5,361 million arising from the reduction of voting ordinary shareholding in Commercial Bank of Ceylon PLC (CBC) to 15 pc from 26.8 pc during June to August 2010.
The gross advances of the Bank as at 31 December 2010 amounted to Rs 39,121 million. The third quarter of the current period witnessed 3 percent growth in advances which was an improvement on the 1 percent growth recorded in the second quarter. This was due to renewed demand for leasing and project loans although partly offset by some prepayments by borrowers who opted to refinance their longer term loans with short term borrowings to take advantage of the lower interest rates and significant liquidity in the banking system. The combined gross advances of the Bank and the commercial banking subsidiary, DFCC Vardhana Bank Ltd (DVB) increased to Rs 57,376 million, for a growth of 5.pc in the current period. The credit growth in the branches dealing with the Small and Medium Enterprises (SME) was stronger than in the corporate division, where, although the level of approval was almost double that of the previous period, disbursements tend to take place with a time lag due to the greater complexity of the projects financed. Credit approved but not as yet disbursed as at the end of the current period was Rs10,343 million compared with Rs 7,096 million at the end of the previous period.
The gross non-performing loans, advances and leases (NPA) ratio of the Bank was 7.5 percent reduced from the peak of 11.6 pc on 30 June 2010 and lower than 10 pc on 31 March 2010, the end of previous financial year. Gross non performing assets that stood at Rs 5,424 millionon 31 March 2010 declined by Rs 1,094 million to Rs 4,330 million at the end of the current period. These positive developments relating to growth in the core business and improved asset quality augurs well for the future.
Despite the improvement in asset quality, the Bank continued its prudent provisioning policy. As at 31 December 2010, the specific provision cover was62 pc and the non-performing loan exposure net of specific and general provisions (disregarding collateral value) as a percentage of equity of the Bank on 31 December 2010 was 3 percent.
The contribution to profit after tax from DVB was Rs157 million compared with Rs129 million in the comparable period. This increase was largely due to reversal of specific provision through recoveries.
CBC ceased to be an associate company on 2 June 2010 and therefore the results for the second and third quarters of this financial year do not include the proportionate profit after tax of CBC.
source - www.dailymirror.lk
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