DFCC bank PAT up

DFCC bank has recorded RS 1360 million profit after tax (PAT) for the financial year ended 31 March 2009.

This was Rs. 1318 million in the previous year. Bank’s profit before tax is recorded as Rs. 2006 million. The DFCC Group recorded Rs 2,068 million profit after tax the year ended 31 March and this was Rs 2246 million in 2008.The group’s profit before tax was recorded as Rs 3122 million and this was Rs 3090 million in the previous year.

At in bank level demand for new project loans declined with both approval of loans and disbursements falling behind the previous year.

The Bank was also compelled to take a much more cautious approach to

the expansion of credit, especially the granting of fixed rate finance leases, due to clear signs of stress in that segment, the Bank’s annual report said..

Net interest income on customer advances was affected by the contraction of the portfolio through the year as well as higher non-performing loans and leases.

Capital gains on disposal of mature equity investments and emphasis on cost control despite the high average inflation that prevailed, helped to negate the adverse impact of higher provisions for possible credit losses.

At the Group level, DFCC Vardhana Bank (DVB) was also affected by the difficult credit climate although it was able to grow its customer advances due to the higher working capital requirements of businesses. Nevertheless, it too had to cope with a worsening of credit quality with higher non-performing advances and provisions.

The venture capital subsidiary Lanka Ventures PLC, had a steady year at the operational level but a prior year tax charge of Rs. 137 million relating to a refund that had been received in 2004 under the subsequently repealed tax amnesty resulted in a significant loss for the year.

Lanka Industrial Estates Limited (LINDEL) that owns and operates an industrial estate in a Colombo suburb recorded a profit after tax exceeding Rs. 100 million for the first time, a slight increase from the previous year. The recently established information technology subsidiary, Synapsys Limited, recorded a loss due to expenses incurred in building capacity to enter foreign markets.

DFCC consulting (Pvt) Limited made only a nominal contribution in the absence of new overseas assignments.

The new investment banking joint venture, Acuity Partners Private Limited, became fully operational and moved to a new location in early 2009.