Corporate news

DFCC Bank profit up 31.7% to Rs. 1,288m in three months

The non-audited profit of the DFCC Bank, its subsidiaries together with the share of associate companies profit before corporate tax and financial services VAT for the three months ended June 30, 2008 (current period) was Rs. 1,288 million, an increase of 31.7 per cent over the Rs. 978 million in the corresponding period (April to June 2007).

The financial services value added tax and income tax expense was Rs. 747 million being 58 per cent of this profit and the profit attributable to equity holders after minority interest was Rs. 515 million, an increase of 30.4 per cent over the corresponding period.

The current period included a one off gain of Rs 108 million (after financial services VAT) arising from the sale of shares held as an investment.

Good control was exercised over non-interest expenses of the Bank. DVB continued to incur costs relating to expanding its network and building capacity and infrastructure for the future following a conscious decision that was taken to continue with the expansion strategy, albeit with some modifications.

The cost/income ratio for the Bank and DVB combined was 31 per cent compared with 36 per cent in the corresponding period. A legislative change effective from March 2008 further increased the charge for Financial Services Value Added Tax. The Rs. 141 million incurred for the quarter was Rs. 24 Million higher than what it would have been on the basis of the previous computation methodology.

Consolidated diluted earnings per share for the current period increased to Rs. 3.95 from Rs. 3.08 in the corresponding period.

The Bank and DVB, the commercial banking subsidiary, were cautious in attempting to grow their lending and lease portfolios in the present interest rate regime since the debt servicing capacity of many borrowers, especially those in the SME sector was strained by the combined effects of high inflation and high borrowing costs.

The combined gross advances of the Bank and DVB as at June 30, 2008 amounted to Rs. 58,850 million recording a marginal reduction during the quarter ended June 30, 2008.

NDB Bank continues steady growth in core banking

The core banking revenue (net interest income, forex and commissions, etc) of NDB Bank grew at a steady pace by 15% over the corresponding period last year, as a result of the significant growth in loans and advances by 20% and deposits by 23% over the corresponding period.

The Profit Before Tax and the Profit After Tax of the Bank excluding the exceptional equity capital gains earned by the Bank during the corresponding period last year increased by 18% and 23% over the comparative period. The group Profit After Tax and the Profit Attributable to the Shareholders also increased by 7% and 9% over the corresponding period last year excluding the equity capital gains earned by the Bank during the corresponding period last year.

The Bank continues to progress as a financial service provider by offering a comprehensive range of banking products to its corporate, SME and consumer customers.

Ceylon Glass records 44% overall growth in first quarter

Ceylon Glass Company Limited (CGCL) has reported a sales value of Rs. 679 million in the first quarter of the financial year 2008/2009 as against Rs. 469 million in the corresponding quarter of the previous year. This reflects an impressive overall growth of 44% over the corresponding quarter of the previous year.

It was indeed unfortunate that amidst such steady growth, the company had to report a loss of Rs. 120 million for the period under review as against the profit of Rs. 44 million during the corres ponding quarter of the previous year

HNB income grows 30% to Rs. 17.6 b in 1 H

The half year results released recently on Hatton National Bank show an impressive performance by the bank recording an income of Rs 17.6 Bn., a growth of 30% compared to the corresponding period last year.

HNB’s net interest income grew steadily to Rs 6.0 Bn., a growth of 13% during the first half of 2008 compared with 2007 and non interest income grew by 39% to Rs 2.3 Bn from Rs 1.7 Bn.

This enabled the Bank to improve the Net Income from Rs 6.9 Bn to Rs 8.3 Bn., a growth of 20%. During the first half 2008 the entire operating expenses bill was comfortably met by the net interest income from core banking activities.

The Bank’s non interest expenses grew only by 6% to Rs 4.5 Bn during the first half when compared to the corresponding period in 2007. Personnel costs have been well managed with an increase of only 10% to Rs 1.7 Bn when compared to the corresponding period in 2007.

Continued focus on cost management and improvement in productivity norms saw an improvement in cost income ratio from 61% to 54% during the first half of 2008.

The Bank’s provision for bad and doubtful debts decreased by 29% to Rs 424 Mn during the first half of 2008 compared to the corresponding period of 2007.

As at the end of the first half of 2008 the bank has built the statutory general provision stipulated by CBSL to 0.87% leaving the bank adequate comfort in meeting the requirement of 1% by end of March 2009.

HNB’s Operating Profit from Ordinary Activities before taxes surpassed the Rs. 3 Bn mark, recording a growth of 49% over 2007.