ECONOMYNEXT – DFCC Bank said it has sold a part of its Sri Lanka sovereign bond portfolio booking a loss of 2,171 million rupees, but the transaction also triggered the reversal of 2,453 million rupees of provisions.
DFCC Bank reported sovereign bonds at a value of 4,593 million rupees by end December 2023, down from 5,215 million rupees a year earlier. The rupee value declined 517 million dollars due to currency appreciation during the year.
The bank told shareholders that it had provided a 50 percent impairment provision for the ISBs by end December.
The bank also sold Sri Lanka government securities booking a gain of 2,056 million rupees.
Group interest income for the March 2024 quarter fell 25 percent to 18.5 billion rupees as the bank slashed lending rates, while interest costs fell 33 percent to 11.85 billion rupees.
Net interest income fell 6 percent to 6,717 million rupees.
Net fee and commission income grew 6 percent to 930 million rupees.
DFCC made provisions of 1,107 million rupees for bad loans, down from 3,105 million last year.
Personnel expenses went up 76 percent to 1,933 million rupees as salaries were raised. Sri Lanka’s wage earners lost disposable income through a combined hit of a currency collapse and income tax rate hike and a reduction in slabs.
Group net profits were flat at 1,847 million rupees, against 1,823 million rupees last year, giving earnings of 4.31 rupees per share.
For the six months to June the group reported earnings of 5,533 million rupees, up 47 percent from a year earlier, giving earnings of 13.17 rupees per share.
Gross assets fell 1 percent to 564 billion rupees from December to June. Bank said it cut high cost borrowings from other banks, and grew its deposits.
Equity grew 6 percent to 76.0 billion rupees at group level. Its loan book grew 3 percent to 357 billion rupees. Tier 1 capital adequacy improved to 13.1 percent by June from 12.4 percent in December and total capital adequacy to 16.8 billion rupees from 14.4 billion. (Colombo/Aug11/2024)