DFCC Bank PLC reported improved performance in the three months ended in December 2023, as the bank saw the loans picking up, with the easing interest rates and the provisions were lower from a year ago. However, the higher costs and taxes hurt the profits. The bank reported Rs.7.59 billion in net interest income for the October-December period, down 3 percent from the same period in 2022, as the margin between what the bank offers for its loan customers and what it pays to its deposits narrowed, with the declining interest rates.
While the high-yielding government securities portfolio buttressed the margins for most part of the year, in addition to the higher interest rates, such yields too started coming down towards the latter part of the year.The bank saw its net interest margin falling to 5.18 percent by the year end, from 5.45 percent three months ago, although it was still up from 4.96 percent at the start of 2023.The bank was seen reopening its lending spigots in the final three months, with its loan book expanding by Rs.14.89 billion. However, in the year, the loan book contracted by Rs.8.29 billion or 2.06 percent to Rs.394.68 billion, due to the bank taking an extremely cautious approach to new lending, as a result of the weaker borrower profiles in a moribund economy.
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