DFCC Bank 4Q weighed by loan loss provisions; full-year earnings up 16%

DFCC Bank PLC reported earnings of Rs.6.08 a share or Rs.2.66 billion for the quarter ended in December 2026, compared to Rs.6.47 a share or Rs.2.78 billion in the year earlier period, a slippage of 5 percent.

The performance was weighed down mostly by the Rs.1.11 billion charge the bank made for the possible bad loans for the quarter, which was up substantially from Rs.387.12 million in the year earlier period.

The increase in the provisions appears to have been due to the Rs.118.08 billion growth in the loan book in the financial year, which came at a 26.8 percent growth.

The loan growth slowed in the final quarter to Rs.17.81 billion.

The bank’s asset quality too improved, with the Stage 3 ratio falling to 4.55 percent, from 5.63 percent at the beginning of the year.

The bank raised Rs.99.61 billion in deposits, at a 21.4 percent growth in the year.

The bank in February 2026 raised Rs.10.0 billion from the GSS+ bonds, with the maturity terms of five, seven and 10 years, to beef up its capital profile.

By end-December 2025, the bank had its Tier I capital ratio at 13.55 percent, while the Tier II capital ratio was at 15.93 percent, when the regulatory minimums were at 8.5 percent and 12.5 percent, respectively.

DFCC’s profits were helped by the net interest income, which rose by 8 percent to Rs.8.00 billion.

The net fee and commission income rose by a robust 49 percent to Rs.2.03 billion, making a quarter of the net interest income.

The bank said its fee incomes were generated from the remittances, trade-related commissions and card-based services. 

“The credit card portfolio expansion contributed meaningfully to (this) performance,” the bank added in a commentary that followed the financial results release. 

Meanwhile, for the full year ended in December 2025, the bank reported earnings of Rs.26.00 or Rs.11.37 billion, up 16 percent.

Hatton National Bank PLC has a 12.47 percent stake in DFCC Bank, being its largest shareholder.

The government in concert held roughly a 21 percent stake in DFCC Bank as of end-December 2025.