2015 was a year o f transformation for DFCC following the amalgamation with DFCC Vardhana Bank and the change in the financial yearend to December 31 from March 31. The performance reported is for nine months from April 2015 to December 2015 as against that of the previous full year. Net profit after tax as at December 31, 2015 was Rs.1,642 million (group) and Rs.1,068 million (bank) while that for FYE March 2015 was Rs.4,439 million and Rs.3,240 million, respectively. However, there were several exceptional items in both periods which distort the comparison.

FYE 31 March 2015 included substantial one-off capital gains and impairment reversals, while the period ended December 31, 2015 entailed significant nonrecurrent expenses incurred during the amalgamation for items such as systems integration and data migration. The change of the financial year meant that the bank incurred an additional taxation charge based on the full year, even though results were for nine months.

Also, substantial dividend income, which accrues in the first quarter of the calendar year, could not be included. Meanwhile, total assets grew by 17 percent to Rs.247,109 million as at December 31, 2015 from Rs.210,610 million as at March 31, 2015. This included a robust credit portfolio growth of 18 percent to Rs.171,111 mi l l ion from Rs .144,896 million. At the same time credit quality was not compromised.

The ratio of impaired loans to total loans for December 31, 2015 was 5.1 percent compared to 6.1 percent for March 31, 2015, indicating a credit quality improvement. Close monitoring drove down the bank’s ratio of impaired loans to total loans as well as its regulatory non-performing loan ratio, with the latter improving to 3.7 percent as at December 31, 2015 from 4.3 percent as at March 31, 2015. Its balance sheet strength is demonstrated by a group Tier 1 capital adequacy ratio of 15.4 percent and a total capital adequacy ratio of 15.3 percent making DFCC Bank one of the highest capitalised banks in the industry. CEO Arjun F e r n a n d o commented, “While 2015 was a transformative year for DFCC, the amalgamation with Vardhana has laid the foundation for the bank to take on the competition. We are therefore confident of resuming our normal growth trajectory in 2016 and beyond.”