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| Sunday, 8 August 2004 |
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| News Business Features Editorial
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DFCC ventures into infrastructure projects DFCC Bank sees opportunities in the financing of infrastructure projects and services particularly in areas such as power generation, information and communication technology and leisure as well as high value adding enterprises in exports and agriculture. The bank will continue to play an active role in SME development and if the peace process makes progress in reconstruction and rehabilitation efforts in the North and East, states Chief Executive officer and Director of DFCC Bank Nihal Fonseka in the latest annual report. According to the report gross approvals of loans and leases increased to Rs 17,930 million from Rs 10,819 million in the previous year. Disbursements which lag approvals amounted to Rs 12,217 million an increase of 44 percent over the previous year. The finance leasing portfolio grew strongly by 56% to reach Rs 3,567 million fuelled by increased demand for this product from the SME sector. It was particularly satisfying that about 65% of new leases granted were disbursed by our branches located outside the Western province, states Fonseka. The banks continued efforts in the restructuring and rehabilitation of projects facing problems and the orderly disposal of assets belonging to some projects that had failed coupled with credit growth resulted in non performing loans and finance leases decreasing from Rs 2,912 million to Rs 2,621 million and the ratio of non performing loans and leases to the total improving from 13.3 to 10.3 percent, he added. Net provisions of Rs 330 million were made for bad and doubtful debts compared to Rs 401 million in the previous year. The banks associate and subsidiary companies contributed positively to group results. DFCC Stock Brokers had an excellent year while NAMAL underperformed although it was profitable and the funds under its management fared well. Lanka Ventures had a good year and its performance was further boosted by a one off refund of taxes paid previously. The associate company Commercial Bank had yet another successful year reporting an after tax profit of Rs 1.5 billion higher than the previous year. However its contribution to DFCC group profit under equity accounting declined due to adjustments on consolidation as explained in the Financial review. During the year DFCC bank invested rs 542 million in a rights issue to support the expansion of Commercial Bank. In addition DFCC made an investment of Rs 541 million in its commercial banking arm DFCC Vardhana Bank. |
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