DFCC Vardhana Bank net up 28% in 3Q

DFCC Vardhana Bank PLC’s (DVB) profits for the nine-months to September this year rose by 27.86% from the year earlier with a total figure ofRs. 401.73 million, interim accounts showed. Growth was also helped by higher business volumes and provision reversals. The bank reported earnings of Rs. 1.59 per share for the quarter.

“Turnover for the nine-months ending in September was Rs. 5.18 billion which is a positive growth of 73.51% over the comparison period last year,” DFCC Vardhana Bank CEO Lakshman Silva said.

Banks were restricted to a 18.0% regulatory ceiling on credit growth set by the Central Bank of Sri Lanka for 2012. The credit ceiling was brought in by the Central Bank to curb the credit bubble and avert the balance of payment crisis. During the year, DFCC Vardhana Bank secured a foreign credit line, lifting the credit ceiling up to 23.0%, allowing the bank to lend up to Rs. 1.0 billion till the end of the year.

“Despite these challenges, the bank remains focused on a strong growth trajectory and looks forward to contributing to the economic growth of Sri Lanka,” Mr Silva further added.

Interest income rose 80.71% to Rs. 4.64 billion in the nine months to September with interest expenses rising at a faster 128.16% to Rs. 2.99 billion and net interest income growing at a slower 31.48% to Rs. 1.66 billion.Unspecified other income rose 36.90% to Rs. 480.87 million.Performing loans grew at 15.14% to Rs. 36.77 billion in the September three quarters from December 2011.

Deposits grew at 31.48% to Rs. 44.16 billion by end September 2012 from December 2011. Of this, savings deposits have grown by 22.9% and time and savings deposits has risen by 36.14%, favourably for the bank’s liability portfolio. Total assets have also grown by 21.66% to Rs. 55.89 billion.

Rated ‘AA-(lka)’ with a ‘stable’ outlook by Fitch Ratings Lanka, DFCC Vardhana Bank is majority owned by DFCC Bank PLC, which is a licensed specialised bank and Sri Lanka’s only development finance institution.