Financial Times - DFCC Bank reports sharp rise in 3-mth profits

DFCC Bank said its group non-audited post-tax group profits for the three months ending 30 June 2006 was Rs 400 million, up 80 percent over Rs 222 million in the previous comparable period (April to June 2005).

The financial year of the associate company, Commercial Bank of Ceylon Ltd (CBC) and two subsidiaries, DFCC Stockbrokers (Pvt) Ltd and DFCC Vardhana Bank Ltd (DVB) ends on 31 December. Thus the first quarter results for the period 1 April 2006 to 30 June 2006 includes the results of these companies for the period 1 January 2006 to 31 March 2006, the bank said.

It said the significant increase in the profit after tax of CBC was partly due to the mark to market gain relating to trading securities on 31 March 2006. CBC reported an unrealized gain of Rs. 667 million for the first quarter ended 31 March 2006.

DFCC CEO Nihal Fonseka said in the statement that the bank’s (own) post-tax profits for the current period was Rs 218 million, an 86 percent increase over Rs 117 million in the comparable period. The profit before VAT and income tax expense was Rs 513 million in the current period over Rs 218 million in the comparable period. The current period profit includes the final dividend of Rs107 million from Commercial Bank of Ceylon Limited (CBC) in respect of the financial year to 31 December 2005 received in April instead of March (previous financial year) as has been customary. “If this income is excluded, the profit before taxes in the current period would have been Rs 406 million,” he said.

The significant improvement in profit before taxes was mainly due to increase in the outstanding credit portfolio. The net credit portfolio on 30 June 2006 was Rs 36,959 million over Rs 28,599 million on 30 June 2005. The net interest income of Rs 563 million in the current period over Rs 417 million in the comparable period.