‘DFCC Bank stands firm amidst challenges’

In the backdrop of an extremely challenging environment supporting the efforts by the Government to uplift and stabilize the economy,

continued its committed service to customers across the country providing essential banking services without interruption during these challenging times. DFCC Bank concluded the quarter ended 31March 2021 with sound performance and growth.

DFCC Bank really swung into full gear as a full-service Commercial Bank marking 65 years of being a pioneer in Sri Lanka’s banking sector. The Bank has made great strides recently to capture market share by demonstrating agility to embrace its goal of becoming a customer centric digitally enabled bank. The Bank introduced several concessionary schemes to its clientele in accordance with the Directions/ Guidelines of Central Bank of Sri Lanka extending financial and advisory support to all segments of customers.

The following commentary relates to the unaudited Financial Statements for the quarter ended 31 March 2021, presented in accordance with Sri Lanka Accounting Standard 34 (LKAS 34) on “Interim Financial Statements”.

Financial Performance Profitability

The DFCC Group comprises of DFCC Bank PLC (DFCC), and its subsidiaries – Lanka Industrial Estates Limited (LINDEL), DFCC Consulting (Pvt) Limited (DCPL) and Synapsys Limited (SL), the joint venture company – Acuity Partners (Pvt) Limited (APL) and associate company – National Asset Management Limited (NAMAL).

DFCC Bank PLC, the largest entity within the Group, reported a profit before tax (PBT) of LKR 1,915Mn and a profit after tax (PAT) of LKR 1,479 Mn for the quarter ended 31 March 2021. This compares with a PBT of LKR 1,295 Mn and a PAT of LKR 925 Mn in the comparative period.

The Group recorded a PBT of LKR 2,036 Mn and PAT of LKR 1,583 Mn for the quarter ended 31 March 2021 as compared to LKR 1,408 Mn and LKR 1,014 Mn respectively in the comparative period of year 2020. All the member entities of the Group made positive contributions to this performance.

The basic earnings per ordinary share (EPS) of the Bank improved to LKR 4.80 for the quarter ended 31 March 2021 from LKR 3.04 for the comparative period in year 2020 recording an increase of 58%. The Bank’s Return on Equity (ROE) improved to 6% during the quarter ended 31 March 2021 from 4.93% recorded for the year ended 31 December 2020. The Bank’s Return on Assets (ROA) before tax also improved to 0.91% during the quarter ended 31 March 2021 compared to 0.78% recorded for the year ended 31 December 2020.

Net Interest Income

The Bank recorded a LKR 2,679 Mn in net interest income (NII) which is a 10% decline year on year primarily due to the drop in AWPLR more than 370 bps over the past 12 months and due to the business implications that arose with the pandemic situation. In line with this trend and due to the time taken to re price the existing deposits to reflect market trends the interest margin also has slightly decreased from 2.53% in December 2020 to 2.35% in March 2021. (DFCC Bank)