Financial Times

DFCC to concentrate on development outside Colombo and Gampaha

By Duruthu Edirimuni

DFCC Bank will concentrate on funding projects outside Colombo and Gampaha this year, while actively engaging in IT enabled services.

“We are very keen to fund projects that will come up in the future out side Colombo and Gampaha with the government’s special incentives to companies who wish to invest in these regions,” Nihal Fonseka, CEO, DFCC Bank told the Sunday Times FT.

He said the Bank is looking at sectors such as technology base outsourcing and IT enabled services as well. “We are also very keen to get into the new knowledge economy of IT enabled services,” he added.

He said that the DFCC Group as a whole, saw profits after tax grow 26 percent and a return on equity improve by 15.8 percent. The contribution from the group’s commercial banking operations was a significant factor in this performance.

In particular, the significant improvement in the performance of the strategic 95 percent-owned commercial banking subsidiary, DFCC Vardhana Bank Limited, resulted in the aggregate profit after tax of Rs. 1.2 billion for the two businesses, an increase of 16 percent.

He said that the profit before tax and value added tax on financial services of the bank’s operations were at Rs.1.86 billion, which were 10 percent higher than in the previous year. He said that the increase would have been almost 17 percent had the final dividend of Rs. 107 million from Commercial Bank of Ceylon Limited been approved before the closing of DFCC Bank’s financial year, as has been the case in the past.

The net group profit attributable to shareholders recorded a 26 percent increase to Rs 1.7 billion with diluted earnings per share increasing in tandem to Rs 29.42.

Meanwhile, strong demand for capital asset funding from construction, food and beverage, transportation and communication sectors helped loan and lease approvals, as well as disbursements to grow significantly compared with the previous year. Fonseka noted that the local banking industry was not positioned well enough to meet the inevitable cross border competition especially from India, when the Comprehensive Economic Partnership Agreement is finalised for implementation.

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