The DFCC Bank is set to expand its commercial banking operations through, subsidiary, DFCC Vardhana Bank (DVB), officials said.“We will forge ahead with retail banking products through this arm and this is the main reason we increased our stake in DVB to 99.1% recently – so that we can fully control it,” Nihal Fonseka, CEO DFCC told the Business Times on the sidelines of a media briefing to launch their annual report for 2011. He said that the 10% they bought in Nation’s Trust Bank recently was a portfolio investment.
DFCC Group posted a consolidated profit after tax of Rs 3 billion for 2011/12, which is an increase of 37% over the Rs 2.2 billion recorded in the previous year (excluding the exceptional profit relating to the reduction of DFCC’s shareholding in Commercial Bank in 2010/11).
The main contributing factors to the profit growth were lower loan loss provisioning and higher write-backs due to improved asset quality and re coveries, higher non-funds based income and a strong loan portfolio growth, a DFCC press release said. It added that these more than offset the slightly reduced contribution from the 50% owned investment banking joint venture Acuity Group, which was affected by the somewhat unfavourable market conditions in the latter part of 2011.
The combined credit portfolio of the DFCC Bank and grew 47% from Rs 60.7 billion to Rs 89.1 billion. Credit growth was experienced across diverse areas of economic activity, in both the Corporate and Small and Medium Enterprise (SME) sectors. Mr. Fonseka said that this year the demand for credit growth is lower than last year owing to the Central Bank credit rules brought in early this year. He added that their leasing business has also witnessed a drop in demand. Total customer deposits of the group increased 75% to Rs 44.4 billion during 2011 from Rs 25.4 billion a year earlier. |
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