DFCC - 30.06.2012

Gaja · 1 DFCC - 30.06.2012 Thu Aug 09, 2012 3:38 pm

Gaja

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http://www.cse.lk/cmt/upload_report_file/371_1344504906678.pdf

Slstock · 2 Re: DFCC - 30.06.2012 Thu Aug 09, 2012 3:55 pm

Slstock

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Gaja,
Great you are back to report before announced. Saves me time.

Massive revenue growth but Eps is almost same as last year due to interest rates.

DFCC is a safe share . Cannot expect massive growth from established/matured companies as such as with growing. A blue chip. Capital adequecy is very strong.x

A stable share only for the patient . NAV is 95 closer to trading price at Rs 110. PE wise there are stronger shares in the market. But with stability and NAV one of the strongest.

Gaja · 3 Re: DFCC - 30.06.2012 Thu Aug 09, 2012 4:01 pm

Gaja

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What will be the impact to the NAV in the days to come due to this :- INVESTMENTS
The quoted equity investment securities of DFCC are carried at a cost of LKR 4,971m as at 30 June 2012. The aggregate market value of the investments on 30 June 2012 amounted to LKR 13,733 m with an unrealized gain of LKR 8,762 m. The interim non-audited financial statements are not based on the new accounting standards and therefore this unrealized gain is currently not recognized in the financial statements. However, under the new accounting standards all listed shares currently classified as investment securities would be reclassified as available for sale and marked to market and the unrealized gains recognized in the equity of DBB.

Slstock · 4 Re: DFCC - 30.06.2012 Fri Aug 10, 2012 8:00 am

Slstock

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Gaja wrote:What will be the impact to the NAV in the days to come due to this :- INVESTMENTS
The quoted equity investment securities of DFCC are carried at a cost of LKR 4,971m as at 30 June 2012. The aggregate market value of the investments on 30 June 2012 amounted to LKR 13,733 m with an unrealized gain of LKR 8,762 m. The interim non-audited financial statements are not based on the new accounting standards and therefore this unrealized gain is currently not recognized in the financial statements. However, under the new accounting standards all listed shares currently classified as investment securities would be reclassified as available for sale and marked to market and the unrealized gains recognized in the equity of DBB.

Gaja, I am not sure, how this is going to be accounted for under the new standards but it appears it will be documented under equity. But clearly a Rs 33 value addition per DFCC share is there.

sriranga · 5 DFCC profits up marginally Sat Aug 11, 2012 12:54 am

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The DFCC Group recorded a consolidated profit after tax of Rs. 713 million for the 1st quarter ended 30 June 2012 up 1.5 percent from Rs. 702 million the previous year, the bank announced earlier this week. The banking business contributed Rs. 617 million to profit after tax

Its investment banking joint venture, Acuity Partners (Pvt) Ltd (APL) contributed Rs. 49.5 million in the current period marginally lower than Rs. 52 million in the comparable period. The environment was not conducive for investment banking business and the contribution from APL’s core activities was significantly lower than in the previous period. However, APL benefitted from an issue of new shares to minority shareholders by a subsidiary at a premium to net asset value which gave rise to deemed disposal profit of Rs. 142 million attributable to APL and recognized in APL’s consolidated income statement. The contribution from all other subsidiaries and associate company collectively was Rs. 15.6 million in the current period (Rs. 30.5 million in the comparable period).

The interest income of DBB in the current period was Rs. 3,242 million, an increase of 54% over Rs. 2,099 million in the previous comparable period. The higher interest income was the result of portfolio growth with total loans and advances (excluding interest receivable) increasing 45% from Rs. 65,527 million on 30 June 2011 to Rs. 94,808 million on 30 June 2012, as well as due to the increase in market interest rates by several percentage points during that time. However, the rising trend in interest rates also had an adverse impact on funding cost. The environment was not conducive to raising medium and long term funds from the domestic market as investor appetite for such investments was very low.

Mobilization of demand and lower cost savings deposits also became difficult with investor preference shifting to short tenor time deposits. Thus, although DBB increased its customer deposit base by 98% from Rs. 26,613 million on 30 June 2011 to Rs. 52,634 million on 30 June 2012 there was a shift to higher cost term deposits and this change in the funding mix resulted in interest expense of DBB increasing from Rs.980 million in the comparable period to Rs. 1,914 million in the current period, an increase of 95%. The interest margin of DBB thus reduced, as was the case for the overall banking sector, and the net interest income of DBB was Rs. 1,328 million in the current period recording a modest increase of 19% over Rs. 1,119 million in the comparable period.
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=58865