DFCC bank PAT increases

For the three months ended June 30 :

The DFCC Bank’s own non-audited Profit After Tax (PAT)for the three months ended June 30, 2009 was Rs468 million and it was an increase of 35 percent over the comparable period said press release issued by the bank.

Despite a contraction in the credit portfolio, which mirrors the general trend in the Sri Lankan banking industry, the Bank was able to improve its net interest income through proactive liability and liquidity management.

The Bank chose to shed expensive time deposits and increase the current allocation to government securities to benefit from the higher yield that prevailed earlier in the year. Thus, despite an 8.1 percent reduction in interest income on loans and advances during the current period, the net interest income of Rs770 million in the current quarter was a 13 percent increase over the comparable period.

Close attention to cost control and the cessation of general provisioning mandated by the Central Bank of Sri Lanka which has been built up to the maximum required level, enabled the Bank to increase the operating profit before taxes by 17.7 percent compared with the previous period. The deferred tax liability reduced consequent to the contraction of the lease portfolio and thus reduced the effective tax rate significantly.

However, the consolidated profit attributable to equity holders after minority interest in the current period was Rs479 million, a reduction of 6.9 percnt over the comparable period mainly due to the elimination of dividends received from Commercial Bank of Ceylon PLC (CBC) as a consolidation adjustment and the lower profit after tax contribution from CBC in the current period.