The DFCC Group recorded a consolidated profit after tax of Rs 1,138 m for the three months ended June 30, 2014 compared with Rs 612m in the corresponding period of the previous year (comparable period). Apart from the Banking Business which contributed Rs 1,093m to profit after tax and is analysed below, the investment banking joint venture, Acuity Partners (Pvt) Limited (APL) contributed Rs 3m in the current period (Rs 10 m in the comparable period).

The contribution from all other subsidiaries and associate company collectively was Rs 48m in the current period (Rs 24m in the comparable period). BANKING BUSINESS The Banking Business of the DFCC Group is undertaken by DFCC Bank (DFCC), a licensed specialized bank and 99% owned subsidiary DFCC Vardhana Bank (DVB), a licensed commercial bank.

Both banks function as one economic entity and as such it is appropriate to analyse the consolidated performance of the two banks as DFCC Banking Business (DBB). A consolidated Income statement for DBB has been released to the Colombo Stock Exchange as supplementary financial information. This statement was derived from the interim financial statements. Since the financial year of DVB ends in December, the accounts of DVB are consolidated with a 3 month lag. The DBB recorded Rs 1,541m as operating profit before taxes, an increase of 61% over the comparable period. Profit after tax (both VAT on financial services and income tax) was Rs 1,093m, an increase of 89% over Rs 577m in the comparable period.

Net Interest Income (NII) of DBB for the period decreased by 20% from Rs 2,120m to Rs 1,693m due to the drop in on lending rates in tandem with a drop in benchmark interest rates. Credit growth exceeded industry average and was an increase of 15% year on year. However, the major part of the asset build up was based on disbursements towards the latter part of the quarter.