DFCC Bank and DFCC Vardhana Bank’s profit after tax has crossed the Rs 3 bn mark,for the first time in the Bank’s history.
The financial year ended December 31, 2016 was the first full year of operations after the amalgamation of DFCC Bank with DFCC Vardhana Bank, which took place on October 1, 2015. The expectations were that the amalgamated Bank would reach new financial and other thresholds as a result of a successful blending of development banking and commercial banking coupled with significant synergies. In terms of the performance of DFCC Group, a consolidated profit after tax of Rs 3,469 million was recorded during the year ended December 31, 2016. Apart from DFCC, major contributions were made by Acuity Partners, Lanka Industrial Estates and National Asset Management who posted Profits before Tax of Rs 299 million, Rs 111 million and Rs 39 million respectively in their individual financials.
As for DFCC itself, the Bank’s operating profit (before value added, NBT and income tax) reached a new high of Rs 5,400 million, a growth of 51% over the previous year. The outcome was that the bottom line (without extraordinary capital gains) recorded a strong growth of 60% to reach Rs 3,289 million compared to Rs 2,053 million in the previous period.
As such, it could be said that DFCC underwent a paradigm shift in 2016 in key financial and non financial metrics.
“It was a year in which DFCC excelled in several metrics such as financial performance, employee engagement and brand enhancement. Total income grew 35% to reach Rs 26,754 million while proactive management of asset and liability pricing enabled a 25% growth in net interest income. This was aided by a successful drive to increase the current and savings base with innovative retail products, which diversified funding and stabilised interest margins. An increased focus on ancillary services, which included the Bancassurance arrangement with AIA, and introduction of unique digital banking delivery channels, like the Vardhana Wallet, helped achieve 14% growth in net fee and commission income.
Effective use of market opportunities helped post a 56% growth in trading results from FOREX and Government securities while the net gain from financial investments amounted to Rs 1,165 million, the bulk coming from a dividend of Rs 712 million from DFCC’s shareholding of Commercial Bank of Ceylon. Overall, operating Income surpassed the Rs 11 billion mark to reach a new high of Rs 11,461 million.
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