Lower Revenues

Nov 09, 2010 (LBO) – Sri Lanka’s DFCC Bank’s net profits were down 36 percent to 823 million rupees in the September 2010 quarter from a year earlier amid lower interest rates and profits of Commercial Bank, an associate, no longer being consolidated. Group gross loans and advances were flat at 54.5 billion rupees at end September 2010 from 54.6 billion rupees end March.

Total performing loans were slightly low at 46.2 billion rupees by end September from 46.9 billion rupees at end March 2010.

DFCC chief executive Nihal Fonseka told shareholders that loans fell to 38 billion rupees, down 3.5 percent for the half year, due to “prepayment of some large corporate loans,” which was lower than the 4.6 percent contraction seen in the first quarter.

But its commercial banking unit, DFCC Vardhana had seen higher growth in loans.

Loan loss provisions were lower at 65 million rupees, against 652 million rupees in March.

Group bad loans were up to 8.3 billion rupees from 7.6 billion in March 2010.

But Fonseka said compared to June 2010 the non-performing loan ratio had fallen to 10.5 percent from 11.6 percent.

“..[T]he current trends are that many businesses see a turnaround from improved domestic demand for their products