DFCC Bank's nine-month profits up 33% to Rs.1.2 billion

DFCC Bank's non-audited group profit after tax for the nine months ended December 31, 2005 was Rs. 1,225 million, an increase of 33 percent, over the corresponding period of last year's figure of Rs. 919 million.

A strong performance in the third quarter enabled the Group to improve on the 21 percent profit growth recorded at the half-year, DFCC Bank General Manager/ CEO Nihal Fonseka said. Profit before tax of DFCC Bank's operations increased by 29 percent in the current period compared to the previous comparable period. In the first half of the current period this increase was only 2 pc.

A substantial increase in the net funds advanced to customers during this quarter (Rs. 2,807 million compared to Rs. 1,755 million in the first two quarters) and higher yield on government securities contributed to this improvement. There was a significant increase in capital gains from the disposal of equity shares in the third quarter and this helped to maintain other income in the current period at the previous year's level.

Overall, the quality of the credit portfolio has been stable and the aggressive provisioning policy adopted over the years has resulted in adequate provisioning for the non-performing advances brought forward from previous years.

The gross provisions in the current period was consequently much lower than in the previous comparable period.

The size and frequency of recoveries from previously provisioned or written off loans are indicative of probity of the provisioning policy.
