Thursday 16 May 2019

Sri Lanka's DFCC March net falls 45-pct on higher taxes, trading losses

ECONOMYNEXT- Net profits at DFCC Bank fell 45 percent to 590.5 million rupees in the March quarter from a year earlier with higher taxes and trading losses.

The group earnings were 3.05 rupees a share. The share closed trading at 68.00 rupees on Wednesday, up from 67.40 rupees on Tuesday.

Interest income for the quarter grew 17 percent to 10.2 billion rupees from a year earlier while interest expenses grew 20 percent to 6.9 billion rupees, leading to net interest income growing 10 percent to 3.3 billion rupees.

The loan book grew 5 percent to 262.5 billion at end-March, compared to the start of the financial year three months earlier.

"The bank lent prudently and did not pursue aggressive growth particularly to sectors that exhibited stress," Director/Chief Executive Lakshman Silva told shareholders in a statement.

Loan losses fell 96 percent to 23 billion rupees.

Gross non-performing loans at the bank level grew to 3.91 percent by March compared to 3.12 percent a year earlier.

Total capital adequacy fell to 15.62 percent from 16.17 percent at end-December.

Fee and commission income grew 8 percent to 467.2 million rupees in March from a year earlier.

Losses from trading amounted to 413.7 million rupees, down from a 292.9 million rupee gain from a year earlier.

DFCC took a 2.3 billion rupee net fair value loss from financial instruments, compared to a 6.2 million rupee gain.

This hit was balanced out with a similar gain in net other operating income, mostly through foreign exchange gains.

"Fair value losses of 1,407 million rupees and net fair value gain of 603 million rupees were recorded on account of equity securities and fixed income securities respectively," Silva said.

"The steep drop of 13.7 percent in the share price of Commercial Bank of Ceylon PLC during the quarter mainly contributed to the reported loss of equity securities, while prices of treasury bills and bonds were favourably impacted by decline in interest rates of government securities."

Income taxes grew 113 percent to 479.4 million rupees amid new and higher taxes on banks.

Deposits at the bank grew to 248.2 billion rupees in March, up 3 percent from December.

Total assets grew 4 percent to 392.49 billion rupees over the three months, while net assets per share fell 3 percent to 166.06 rupees.

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