| Sri Lankan development banking group DFCC reported a drop in second quarter 2011 group income and after tax profits, which pertained to the period ended September 30, 2010. Group income fell 18% to Rs. 2.96 billion from Rs. 3.60 billion year-on-year while after group tax profits dropped 36% to Rs. 545.72 million from Rs. 854.31 million.
However, it must be noted that second quarter after tax profits for the bank only increased 9% to Rs. 465 million.
The report also indicated that, following the sale of 13.5% stake in its associate Commercial Bank of Ceylon, the group's first half 2011 consolidated financials were buoyed by the addition of Rs. 3.025 billion during the first quarter ended June 30, 2010. This resulted in an one-time contribution to group income and after tax profits for the first half of 2011 which then showed an increase to Rs. 9.96 billion and Rs. 3.89 billion respectively.
DFCC still retains almost 15% of issued voting shares as an investment in its former associate. Meanwhile, group interest income for the quarter fell to Rs. 2.41 billion, a situation somewhat tempered by group interest expenses also reducing to Rs. 1.10 billion, which led to a 7% decrease in net interest income to Rs. 1.30 billion. At the same time unspecified, group non interest income increased by more than 60% to Rs. 549.58 million.
On the other hand, group non interest expenses rose almost 30% to Rs. 635.73 million, while group provisions for bad and doubtful debts more than halved to Rs. 65.65 million.
Additionally, total performing loans and advances were virtually the same as the year before at Rs. 46.24 billion, while total non performing loans increased 8% to Rs. 8.30 billion. This allowed total gross loans and advances for the group to also remain virtually unchanged at Rs. 54.54 billion. Total balance sheet assets grew close to 5% to Rs.94.54 billion.
The report also revealed reductions in gross advances "mainly due to prepayment of some large corporate loans" which were "compensated by higher growth in gross advances in the commercial banking subsidiary DFCC Vardhana Bank Ltd."
It also emerged that "the pipeline of projects under consideration and committed projects is showing signs of improvement that portends renewed business confidence in the context of low interest rate and inflation regime with political stability."
It was also noted that "contribution to profit after tax from DVB was Rs 90 million compared with Rs 76 million in the comparable period. This increase was largely due to reversal of specific provision through recoveries." |
E-mail
