DFCC Vardhana Bank (DVB) ended 2014 on an ‘excellent note’ which saw the Bank passing the important threshold of LKR 1Bn in profits and LKR 100 Bn in total assets. The Bank recorded a PAT of LKR 1.12 Bn for the year 2014 which is an 80% growth over 2013.
DVB’s achievement becomes more significant as 2014 was a difficult year due to challenging market conditions that prevailed throughout the year. The Banks NII grew by 7% to record LKR 3.3 Bn as at 31st December 2014. DVB did extremely well in fee income generation recording a 25% increase. Treasury operations too recorded a significant growth of 206% spurred by the two main business lines FX and fixed income securities.
DVB consistently applied the revised impairment assessment methodology implemented during the second quarter throughout 2014. The yearend cumulative allowance for impairment for loans and advances was maintained at a healthy level of 64% of the impaired loans and advances of the Bank.
This stellar performance by DVB has been achieved despite a significant increase incurred by them for personnel expenses which amounted to an increase of 18% over previous year. However, going by the financials this investment in the staff seemed to have paid rich dividend to the bank. DVB’s overall operating cost was well contained at only a 14% increase over 2013 through stringent cost management initiatives implemented by the bank.
In a year where corporate investment was lethargic and retail banking demand was sluggish, DVB has done well to record a credit growth in 2014 of 21% compared to the previous year despite the pawning portfolio of the Bank shrinking. This commendable achievement took the Bank’s loans and receivables to other customers at end of December 2014 to an all time high of LKR 65 Bn.
The Bank also recorded a significant growth of 26% in total assets to surpass the LKR 100 Bn in 2014 compared to LKR 79.8 Bn in 2013. The overall deposit base which stood at LKR 70.7 Bn as at end of December 2014 grew in value by LKR 5.6 Bn during the year, an increase of 9% compared to that of December 2013.
DVB is known as an active player in the commercial banking sphere in the country for its innovative customer solutions. The bank is set for a new phase of growth Spurred by the financial results returned.
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