Business
DFCC Bank records strong performance despite economic challenges in Q3 2023
Group Total operating income up by 43% to LKR 31 Bn
Group records Operating Profit Before Taxes on Financial Services of LKR 11 Bn.
Group PAT of LKR 7 Bn
Impairment charge of LKR 12 Bn reflective of present economic stresses
During the period under review, DFCC Bank remained committed to providing high-quality, customer-centric banking services across the country despite facing unprecedented challenges that affected the banking industry. As a result of this dedication, the Bank has recorded a strong performance for the Q3 of 2023.
The Central Bank of Sri Lanka’s (CBSL) timely policy rate relaxation has enabled downward adjustments to the historically high-interest rates, and improved economic conditions would help boost credit flows to the economy in the period ahead. Meanwhile, a reduction was also observed in the yields on government securities with falling risk premia following the finalisation of the debt treatment on rupee-denominated instruments under the domestic debt optimisation (DDO) programme.
The Bank has aligned with the CBSL guidelines and reduced lending and deposit rates to pass the benefits of the continued easing of monetary conditions to individuals and businesses adequately and swiftly, thus supporting the envisaged rebound of the economy.
The following commentary relates to the unaudited Financial Statements for the period ended 30 September 2023, presented in accordance with Sri Lanka Accounting Standard 34 (LKAS 34) on “Interim Financial Statements”.
DFCC Bank PLC, the largest entity within the Group, reported an Operating Profit Before Taxes on Financial Services of LKR 10,693 Mn, Profit Before Income Tax (PBT) of LKR 8,305 Mn and a Profit After Tax (PAT) of LKR 5,498 Mn for the period ended 30 September 2023. This compares with an Operating Profit Before Taxes on Financial Services of LKR 2,269 Mn, PBT of LKR 1,420 Mn and a PAT of LKR 1,043 Mn in Q3 of 2022. The Group recorded an Operating Profit Before Taxes on Financial Services of LKR11,069 Mn, PBT of LKR 9,938 Mn and PAT of LKR 7,064 Mn for the period ended 30 September 2023 compared to 2,612 Mn, LKR 1,762 Mn and LKR 1,320 Mn, respectively, in 2022. All the member entities of the Group made positive contributions to this performance. The Bank’s Return on Equity (ROE) increased to 11.66% during the period ended 30 September 2023 from 5.04% recorded for the year ended 31 December 2022. The Bank’s Return on Assets (ROA) before tax for the period ended 30 September 2023 is 1.76% compared to 0.46% for the year ended 31 December 2022.
Net Interest Income
The Bank’s Net Interest Income (NII) increased 26% over Q3 of 2022 to reach LKR 23,655 Mn by the end of September 2023. Both deposit and lending interest rates have continued to adjust downwards with the broader guidelines provided by the Central Bank in line with the relaxed monetary policy stance of the Central Bank. Accordingly, the Bank has reduced both lending and deposit rates to pass on the benefits of the continued easing of monetary conditions to individuals and businesses adequately and swiftly, thereby supporting the envisaged rebound of the economy. While lower interest rates may have resulted in reduced interest income and expenses, in nominal terms, Net Interest Income (NII) has continued to improve as a metric during the period under review as a result of the Bank’s strategy of investing in high-yield government securities.
Strategically, the Bank thus increased its fixed-income investment portfolio, contributing significantly to increased interest income. The interest margin increased from 4.95% in September 2022 to 5.45% by September 2023.
Fee and Commission Income
The Bank’s dynamic strategies and the efforts of its dedicated teams led to increased remittances, trade-related commissions, and other fee income lines, which contributed to the increase in non-funded business during the period. Fee income generated by credit cards also increased significantly, in line with the volume of the transactions. Accordingly, net fee and commission income have increased by 40% to LKR 2,848 Mn for the period ended 30 September 2023, compared to LKR 2,031 Mn for the comparative period in 2022.
Impairment Charge on Loans and Other Losses
The impaired loan (stage 3) ratio increased from 4.36% in December 2022 to 6.13% as of 30 September 2023, continuing the prevalent trend amidst the present economic conditions. However, the Bank expects this trend to moderate and potentially improve towards the end of the year, reflecting positive developments in the macroeconomic environment coupled with the Bank’s concerted efforts regarding recoveries. To address the current and potential future impacts of the present economic conditions on the lending portfolio, the Bank made adequate impairment provisions during the period by introducing changes to internal models to account for unseen risk factors in the present highly uncertain and volatile environment, including additional provisions made for the Bank’s exposure to risk elevated sectors.
The Bank has used significant judgment using the information available at the reporting date to estimate the recoverable value of foreign currency-denominated investment securities issued by the Government of Sri Lanka. Accordingly, an impairment charge has been recognised to maintain a provision cover of 45% on the above investments.
Accordingly, with these provisions to address the additional risks in the economic environment, the impairment charge recorded at LKR 12,113 Mn for the period ended 30 September 2023, compared to LKR 11,962 Mn in the comparable period.
Operating Expenses
Operating expenses for the period ended 30 September 2023 increased to LKR 8,370 Mn compared with LKR 7,382 Mn during the corresponding period in 2022, primarily due to the increase in inflation. However, the Bank has taken numerous cost control measures within the Bank, resulting in operating expenses being curtailed and managed at these levels.
Other Comprehensive Income
Changes in the fair value of investments in equity securities and fixed-income securities (treasury bills and bonds) and movement in hedging reserves are recorded through other comprehensive income. Due to the application of hedge accounting, the impact on the total equity of the Bank due to exchange rate fluctuation was minimised. A fair value gain of LKR 6,431 Mn was recorded on account of equity securities outstanding as at 30 September 2023. The increase in the share price of Commercial Bank of Ceylon PLC during the period was the main contributor to the reported fair value gain in equity securities. The favourable movement in treasury bills and bond yields also resulted in a fair value gain of LKR 3,239 Mn during the period.
CIF, the globally recognized multi-surface cleaning brand, has officially entered the Sri Lankan market, expanding the range of international home-care solutions available to local consumers.
CIF products are now available at Cargills, Keells, Glomark and Celeste, as well as online through Daraz and uStore, at a retail price of Rs. 900 for 500ml. Shop CIF online at https://ustore.lk/collections/cif
Used by households around the world, CIF is known for its powerful cleaning performance and ability to tackle everyday dirt and some of the toughest cleaning challenges around the home.
Its introduction to Sri Lanka comes as consumers increasingly seek cleaning products that combine performance, convenience and versatility, particularly solutions that can be used across multiple areas and surfaces within the home.
One cleaner. So many possibilities.
From stubborn kitchen grease and grime to limescale around sinks and dirt that builds up on frequently used surfaces, CIF is designed to provide powerful cleaning performance while helping make every day cleaning simpler.
The brand’s multi-surface proposition allows consumers to address a range of household cleaning needs with one versatile solution, bringing greater convenience to modern cleaning routines.
CIF’s entry into Sri Lanka also brings the brand’s global philosophy closer to local consumers eventually helping people restore and rediscover the beauty of the places and things around them through effective everyday cleaning.
With its combination of global recognition, multi-surface versatility and powerful cleaning performance, CIF’s arrival provides Sri Lankan consumers with a new international option in the household cleaning category.
The world’s favorite multi-surface cleaning brand is finally here in Sri Lanka.
Just CIF it!
Business
A sustained wave of Indian assistance to Sri Lanka showcases defining shift in developmental diplomacy
By Sanath Nanayakkare
An evolving approach to regional diplomacy was brought into sharp focus with the recent foundation-laying ceremony for the Moragahakanda Bridge in Matale.
Jointly launched by Indian High Commissioner Santosh Jha and Minister of Transport, Highways and Urban Development Bimal Rathnayake, this 175-metre span is far more than a routine civil engineering project. It serves as the physical manifestation of a broader USD 450 million reconstruction package deployed by India in the wake of Cyclone Ditwah, which severely fractured the island’s transport arteries.
Foreign aid is too often discussed in cold, macroeconomic abstractions. Yet, every so often, a consistent pattern of targeted assistance alters the landscape of bilateral relations, offering a clear window into how regional partnerships evolve out of necessity and goodwill.
Across the country today, a remarkable narrative of multi-layered cooperation is unfolding.
From critical post-disaster infrastructure and maritime routes to grassroots agricultural uplift and institutional capacity-building, India’s developmental footprint is shifting unmistakably toward an organic, people-centric model of shared resilience.
What distinguishes this latest wave of assistance is its deliberate pivot from emergency support to permanent, climate-resilient transformation. When Cyclone Ditwah initially paralysed regional connectivity, India’s immediate response was marked by the rapid deployment of temporary Bailey bridges.
Today, that swift humanitarian intervention has matured into a structural blueprint: the Moragahakanda project stands as the vanguard of 13 permanent bridges being built across Sri Lanka’s provinces by IRCON International Limited, complemented by upcoming railway upgrades and modern signaling systems backed by a USD 250 million Line of Credit.
The true signature of this diplomatic shift lies in its breadth, operating simultaneously across multiple tiers of society:
Institutional Governance: Delegations of Sri Lankan parliamentarians and senior administrative officers regularly travel to India to study public policy frameworks, legislative systems, and administrative practices.
Economic Lifelines: Financial mechanisms, such as viability gap funding for the Nagapattinam-to-Kankesanthurai passenger ferry service, continue to shrink geographical distances, reviving coastal commerce and tourism.
Grassroots Empowerment: Specialised capacity-building programmes tailored for local stakeholders – ranging from state officials to rural dairy farmers -ensure that development reaches deep into the island’s hinterlands.
By aligning immediate disaster relief with long-term infrastructure, institutional capacity, and human capital, India and Sri Lanka are demonstrating how neighbours can build safer, more connected futures together, grounded firmly in mutual respect and tangible progress.
By Ifham Nizam
The Central Environmental Authority (CEA) yesterday urged visitors to the Colombo International Book Fair to bring reusable bags to carry their purchases, as part of a drive to reduce single-use plastic waste at the event.
CEA Director General R. S. P. Kapila Rajapaksha said large quantities of plastic, particularly “sili sili” bags, had been used to carry books at previous book fairs.
“We urge visitors to bring an environmentally friendly, reusable bag when they come to buy books. This simple step can help reduce the use of single-use plastic and protect the environment,” Rajapaksha said.
The book fair opens on September 25, with the CEA and the Sri Lanka Book Publishers’ Association launching an awareness programme targeting book sellers, food vendors and visitors.
The programme will be conducted under the theme “Read Smart, Carry Smart”, focusing on reducing polythene and plastic use throughout the exhibition.
The CEA said the use of plastic bags is also subject to regulations issued under the Consumer Affairs Authority Act. Gazette Extraordinary No. 2456/41, dated October 1, 2025, prohibits the free distribution of handled “sili sili” bags to consumers. Where such bags are sold, the charge must be included in the customer’s bill.
The CEA said food outlets at the book fair would also be required to comply with regulations prohibiting a range of single-use plastic products.
These include plastic straws and stirrers, disposable plastic plates, cups, spoons, forks and knives, as well as polythene-based food wrappers commonly known as lunch sheets.
The CEA said it had discussed the requirements with relevant stakeholders and reached agreement to ensure that prohibited products are not used at food outlets within the exhibition premises.
The authority urged both traders and visitors to cooperate with the initiative and help make this year’s book fair a more environmentally responsible event.
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