DFCC increases profits in first half

The non-audited group profit after tax, attributable to equity holders of DFCC Bank, for the six months ended September 30, 2007 (current period) was Rs. 1,131 million, an increase of 34 pc over the Rs. 841 million in the previous comparable period (April to September 2006).

Composition of Group PAT in the consolidated financial statements attributable to equity holders of DFCC Bank is given below. In the consolidated financial statements the reported profit before tax and after tax are adjusted for inter company dividends, and other consolidation adjustment, which are eliminated in the consolidation process.

The profit before value added tax and income tax was Rs. 1,115 million in the current period being an increase of 10 pc compared to Rs. 1,010 million in the comparable period.

The 11 pc decrease in the first quarter of this financial year was offset by the 32 pc increase recorded in the second quarter, General Manager/Chief Executive Officer, Nihal Fonseka said.

Funds from the fully subscribed Rights Issue (net of investment in Commercial Bank of Ceylon Limited (CBC) ) and a credit line from the European Investment Bank enabled the Bank to reduce its dependence on high cost short-term customer deposits that were resorted to in the first quarter as an interim financing measure.

The reconstitution of the liabilities with a lower level of short-term customer deposits enabled the bank to improve the annualized interest margin from 3.6 pc in the first quarter to 4.7 pc in the second quarter and 4.2 pc for the full half year.

The gross approvals during the current period was Rs. 7,158 million being 21 pc lower than Rs. 9,043 million in the comparable period. The undisbursed approvals on 30 September 2007 were Rs. 10,328 million.