DFCC Bank recorded a Profit After Tax of Rs. 1.7 billion from core banking operations for the quarter ended 31 March, compared with Rs. 2.82 billion in the corresponding period of 2025, as higher impairment charges weighed on profitability, while market-related valuation losses further affected the reported bottom line.
The bank’s Profit Before Tax stood at Rs. 2.44 billion, compared with Rs. 3.96 billion a year earlier. At group level, Profit After Tax was Rs. 1.81 billion, down from Rs. 2.93 billion in the first quarter of 2025.
Despite lower profitability, DFCC Bank reported continued balance sheet expansion during the quarter. Total assets rose 3% from December 2025 to Rs. 884 billion, supported by a 5% increase in the loan portfolio to Rs. 540 billion. Deposits grew 7% to Rs. 604 billion, while total liabilities increased 4% to Rs. 777 billion.
Net Interest Income increased 12% to Rs. 8.32 billion, supported by asset growth and funding cost management in a lower interest rate environment. Net fee and commission income rose 34% to Rs. 1.92 billion, driven by trade-related commissions and card-based services.
Impairment charges increased to Rs. 3.16 billion from Rs. 1.36 billion a year earlier, as the bank strengthened provisioning through updated expected credit loss models and additional management overlays to reflect global and domestic risks. The Stage 3 impaired loan ratio improved to 4.18% from 4.55% at end-December 2025.
The bank also recorded an unrealised loss of Rs. 569 million on equity investments through the income statement, linked to market volatility. Operating expenses increased to Rs. 5.28 billion from Rs. 4.33 billion, reflecting continued investment in technology, digital services, marketing, and business growth.
DFCC Bank said integration and migration work is now underway following its agreement to acquire Standard Chartered Bank’s Wealth and Retail Banking operations in Sri Lanka, a move expected to strengthen its retail and affluent banking franchise.
The bank maintained capital and liquidity above regulatory requirements, with a Tier 1 Capital Ratio of 12.118%, Total Capital Ratio of 16.046%, Net Stable Funding Ratio of 126.54%, and Liquidity Coverage Ratio of 154.41% as at 31 March.