DFCC after tax profit increases by 10 per cent

CORPORATE RESULTS: The non-audited group profit after tax, attributable to equity holders of DFCC Bank, for the nine months ended December 31, 2006 (current period) was Rs. 1,347 million, an increase of 10pc over the Rs. 1,225 million in the previous comparable period (April to December 2005).

In the consolidated financial statements the reported profit before tax and after tax is adjusted for inter-company dividends, and other consolidation adjustment, which are eliminated in the consolidation process.

The financial year of the associate company, Commercial Bank of Ceylon Limited (CBC) and two subsidiaries, DFCC Stockbrokers and DFCC Vardhana Bank (DVB) ends on December 31. Thus the nine months results for the period April 1, 2006 to December 31, 2006 includes the results of these companies for the period January 1, 2006 to September 30, 2006.

The results of DFCC, DVB and CBC for the quarter to December 31, 2006 include the mandatory general provision of 0.1 pc of the performing and over due loans and advances balance on December 31, 2006 imposed by Central Bank.

The profit before Value Added Tax and Income Tax expense was Rs. 1,652 million in the current period an increase of 19 pc over Rs. 1,386 million in the comparable period after charging the recently mandated general provision which amounted to Rs. 41 million for the quarter ended 31 December 2006.

The Bank continued to maintain and improve the momentum of growth during the quarter December 31, 2006. Loans and advances net of provisions on December 31, 2006 was Rs. 42,506 million, compared to Rs. 33,110 million on December 31, 2005 a year on year increase of 28 pc.

This quarter recorded a growth of Rs. 3,130 million while growth in the first six months of this financial year ended September 30, 2006 was only Rs. 3,062 million. Both term loans and financial leases contributed to this growth.

The non-performing loans and advances as a percentage of the total loans and advances were 6.1 pc at December 31, 2006, a reduction from 7.4 pc on 30 September, 2006.

This improvement was due to the containment of advances that were newly classified as non-performing during the third quarter, recovery of previously provided advances and the growth in the credit portfolio.