DFCC Vardana Bank records profit increases of 92.5%

DFCC Vardhana Bank’s profit before tax (PBT) amounted to Rs 708.5 million during 2011 recording an increase of 31.5% compared with the PBT of Rs 538.8 million in 2010. The provision for taxation amounted to Rs 177 million. The effective tax rate was 24% of PBT down from 51% in 2010. Profit after taxation (PAT) attributable to the shareholders amounted to Rs 531.4 million reflecting an increase of 92.5% over the PAT of Rs 276 million over the previous year. The earnings per share (EPS) increased by 73.3% to Rs 2.6 in 2011 from Rs 1.50 in 2010 while the return on assets (ROA) was 1.4% up from 0.9% in 2010.

In terms of asset growth and profit generation during the year, DVB delivered a sound financial performance. Total assets increased by 55.6% to Rs 45,940 million as at 31 December 2011. This growth was driven by the increase in loans and advances. The favourable macro-economic conditions and positive investment sentiments supported the rapid increase in loans and advances.

Interest income from loans and investments amounted to Rs 3,733 million showing an increase of 10.8%, despite low interest rates, benefiting from the balance sheet growth. The income streams have begun to be diversified with the addition of pawning advances, housing loans, financial leases, credit card advances and other PFS products.

Total customer deposits expanded to Rs 33,587 million as at 31 December 2011 from Rs 23,496 million a year before recording an absolute growth of Rs 10,091 million or a 43% increase. In comparison, the savings deposits grew by Rs 1,839 million or 34% to Rs 7,251 million from Rs 5,412 million. The saving deposits constitute 21.6% of the customer deposit portfolio while focus of savings deposit promotion remains to be the growth in the proportion of savings deposits. The public deposits continued to be the main funding source and constituted 73% of all sources of finance including the equity capital. The deposit growth rates exceeded the banking sector average growth rate of 15% for the year.

Rights Issue of Shares: DVB increased the Stated Capital by Rs 1,105 million through a rights issue of 36,837,739 ordinary shares at Rs 30/- per share, increasing total stated capital to Rs 3,183 million divided into 221,026,586 shares.