DFCC Group posts robust 1H performance

The DFCC Group recorded a robust first half performance with consolidated profit after tax of Rs. 2,071 million for the six months which ended on September 30, 2014 compared with Rs. 1,222 million during the previous period.

This growth of 70% was underpinned by the strong performance of the Group's Banking Business (a composite of DFCC Bank, a specialised bank, and its 99% owned subsidiary, DFCC Vardhana Bank, a commercial bank).

The stand alone operating profit before taxes of the Group's Banking Business was Rs. 2,996 million and profit after tax was Rs. 2,002 million, against Rs. 1,962 million and Rs. 1,180 million in the previous period.

This represents impressive growth of 53% and 70%. The other members of the DFCC Group, which includes the joint venture investment bank, Acuity Partners (Pvt) Ltd, collectively contributed Rs. 126 million to PAT compared with Rs. 104 million in the previous period - a growth of 21%.

The Group's Banking Business recorded a portfolio growth of 19% year-on-year.

This was a notable achievement given the weak demand for credit that persisted throughout most of the period. This growth rate far exceeded that achieved by the banking industry.

The period was also marked by a drop in benchmark interest rates leading to a steep decline in lending rates. While borrowing costs also declined, the lag effect had an impact on net interest income, which decreased by 18% from Rs. 4,092 million to Rs. 3,364 million.