Provisional results released yesterday for FY15 showed what DFCC described as “a record performance” that was achieved amidst a challenging business environment, marked by intense competition and declining interest margins.
Despite having to channel a substantial amount of time, effort and resources to merger activities, the bank retained its focus on its core business, resulting in this strong performance.
Group profit after tax increased 38% to Rs. 4.4 billion from Rs. 3.2 billion. Although there was a drop in net interest income, caused primarily because DFCC’s development banking model precluded the bank from maintaining current and savings accounts unlike other commercial banks, overall operating income before VAT and NBT grew by 33% to Rs 6.1 billion from Rs. 4.6 billion. The growth in operating income was driven by a combination of increased fees and other income, and stringent control of costs.
At the same time, Earnings per Share grew by 38% to reach Rs. 16.46 from Rs. 11.89. Meanwhile, total Group assets surpassed the Rs. 200 billion mark rising to Rs. 211 billion from Rs. 175 billion in the previous period.
Besides DFCC Bank’s and DFCC Vardhana Bank’s exceptional performance, the other subsidiaries in the DFCC Group - DFCC Consulting, Lanka Industrial Estates and Synapsys, and the joint venture - Acuity Partners, also reported excellent results and contributed positively to the Group’s performance.
The current year marks the 60th anniversary of DFCC Bank Plc and the Group will look at various options in transforming to a Universal Bank, including an amalgamation between DFCC Bank Plc and its commercial banking subsidiary - DFCC Vardhana Bank Plc, after receiving all the required approvals. During this journey, the DFCC Group will remain faithful to its roots in Development Banking.
Courtesy: Daily Financial Times 19 May 2015