Thursday, 2 January 2014 00:00
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Parent DFCC Bank has invested Rs. 2.19 billion in commercial banking subsidiary DFCC Vardhana Bank Plc.
This is following the completion of the Rights Issue of unlisted ordinary shares.
DFCC Bank owns 99.12% of Vardhana and the balance stake is held by around 43 shareholders.
Last month DFCC Vardhana had a Rights Issue of two for every seven held at Rs. 35 per share. This entailed the issuance of 63.150 million new ordinary shares.
Rights were to raise Rs. 2.2 billion as part of strengthening the core capital of DFCC Vardhana Bank to support the expansion of lending and investment activities.
Another focus was to increase the Tier 1 Capital (equity capital) to enhance the bank’s capacity to issue debt securities to grow its credit granting activities. The expanded capital base (Rs. 5.39 billion post-Rights from Rs. 3.18 billion pre-Rights) will also enable the bank to increase counterparty limits in trade finance and dealing limits in Treasury transactions to expand the sources of income generation.
DVB’s core capital adequacy ratio, as % of risk weighted assets was 9.88% by end September 2013, from 12.77% as of 31 December 2012. Minimum requirement is 5%.
Total capital adequacy ratio, as % of risk weighted assets was 11.37% as at end September 2013, down from 15.22% by end 2012. Minimum requirement is 10%.
The Rights Issue was completed on Monday.
In the first nine months of FY13, DVB’s net interest income amounted to Rs. 2.36 billion, up from Rs. 1.86 billion a year earlier. Net profit grew to Rs. 418.4 million from Rs. 383 million in the first nine months of last year.
Its total assets as at 30 September 2013 amounted to Rs. 73 billion, up from Rs. 59.5 billion as at end 2012. Liabilities grew from Rs. 54.4 billion to Rs. 67.5 billion. DVB has Rs. 1.74 billion in retained earnings.
