Nine months ended December 31, 2009:
DFCC Bank PAT up
DFCC Bank’s own non-audited Profit After Tax (PAT) for the nine
months ended December 31, 2009 (current period) was Rs. 1,327 million an
increase of 13.8 percent over the comparable period (April to December
2008).
Nihal Fonseka |
A combination of portfolio reduction due to continued low demand for
project loans and the sharp drop in market lending rates during the
third quarter resulted in the reduction in the interest margin and net
interest income from lending activities. However, the Bank was able to
contain costs (non-interest expenses) at below the comparable period,
said DFCC Bank CEO Nihal Fonseka in a statement.
The portfolio contraction resulted in the release of part of the
mandatory general provision previously made, which is one percent of the
portfolio on which specific provisions are not made.
The cumulative reduction of this mandatory general provision in the
current period was Rs. 57 million. However, in the second quarter the
general provision on the finance leases portfolio was increased to 3
percent from 1 percent on June 30, 2009, recognizing impairment losses
of this portfolio over and above the specific provision. This additional
general provision during the current period was Rs. 72 million and the
net amount charged to the income statement was Rs. 15 million.
Gross specific provisions increased from Rs. 365 million in the
comparable period to Rs. 489 million in the current period which was
considerably reduced by recoveries of previously provided loans and
advances which increased to Rs. 377 million from Rs. 261 million in the
previous period.
The bank swapped US dollars 15 million sourced from an overseas
medium term borrowing to Rupees with the exchange risk covered.
The premium payable on the forward exchange purchase contract gave
rise to an exchange loss but was more than compensated by the higher
interest income earned on the Rupees generated. |