DFCC Bank group profit after tax up 34% to Rs. 1,131 m in 6 months

The non-audited group profit after tax, attributable to equity holders of DFCC Bank, for the six months ended September 30, 2007 (current period) was Rs. 1,131 million, an increase of 34 per cent over the Rs. 841 million in the corresponding period (April to September 2006).

Composition of Group PAT in the consolidated financial statements attributable to equity holders of DFCC Bank - In the consolidated financial statements the reported profit before tax and after tax are adjusted for inter company dividends, and other consolidation adjustment, which are eliminated in the consolidation process.

Commercial Bank of Ceylon Limited (CBC) profit for the corresponding period has been restated from the previously reported figure of Rs. 253 million arising from a change in accounting policy related to its Bangladesh operations.

The profit before Value Added Tax and Income Tax was Rs. 1,115 million in the current period, an increase of 10 per cent compared to Rs. 1,010 million in the corresponding period. The 11 per cent decrease in the first quarter of this financial year was offset by the 32 per cent increase recorded in the second quarter.

Funds from the fully subscribed Rights Issue (net of investment in Commercial Bank of Ceylon Limited) and a credit line from the European Investment Bank enabled the Bank to reduce its dependence on high cost short-term customer deposits that were resorted to in the first quarter as an interim financing measure.

The reconstitution of the liabilities with a lower level of short-term customer deposits enabled the bank to improve the annualised interest margin from 3.6 per cent in the first quarter to 4.7 per cent in the second quarter and 4.2 per cent for the full half year.