Firm 1H 2024 performance from DFCC Bank
View(s):DFCC Bank has continued to record good key performance indicators in the first half of 2024, reflecting the entity’s growth and stability amidst the ongoing revival of economic activity.
In line with the eased monetary policy stance of the Central Bank, market interest rates continued to adjust downwards. However, the adjustments, particularly of lending interest rates, remained weaker than the adjustments to deposit interest rates, with the expectation of credit extending to the private sector by commercial banks.
DFCC Bank PLC, the largest entity within the group, reported a Profit Before Tax (PBT) of Rs.7,237million and a Profit After Tax (PAT) of Rs.4,654 million for the period ended 30 June 2024 compared with the previous period’s PBT of Rs.5,110 million and a PAT of Rs. 3,205 million.
The group recorded a PBT of Rs.8,342 million and PAT of Rs.5,739 million for the review period compared to Rs.5,867 million and Rs.3,923 million, respectively, in 2023.
The bank’s total tax expense, which includes Value Added Tax (VAT) and Social Security Contribution Levy (SSCL) on financial services and Income Tax, was Rs.4,754 million for the period ending 30 June 2024. As a result, the bank’s tax expense as a percentage of operating profit for the period stood at 50.53 per cent.
Along with the improvement in liquidity conditions of the domestic money market in line with the relaxed monetary policy stance of the Central Bank, both deposit and lending interest rates have continued to adjust downwards during the period under review and are expected to transmit the benefit of policy easing thus far by continuing the downward adjustments in lending interest rates. Accordingly, the bank recorded notable downward adjustments to lending and deposit rates to align with the monetary directions to ease monetary conditions for individuals and businesses adequately and swiftly, thereby supporting the envisaged rebound of the economy.
With the tariff reduction for remittances, fee income has reduced compared to 1st half of 2023, even though the bank has increased volumes. Along with the change in the business environment, the bank increased the commission from credit card operations by increasing volumes.
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