• Sat. May 18th, 2024

DFCC Bank’s impairment charge nearly doubles in 2020

DFCC Bank’s impairment charge nearly doubled to Rs Rs 3.3 billion at the end of 2020 when compared to the previous, the Bank announced.

TheBank’s total impairment charge increased by 98% from Rs 1,669 million in 2019 to Rs 3,298 million for the year ended 31 December 2020

“as the impacts of the COVID-19 pandemic will continue to be felt for some time, the Bank continues to closely monitor its loan portfolio and provisioning levels,” it said.

DFCC Bank’s nonperforming loans (NPL) ratio moved up to 5.56% in December 2020 from 4.85% in December 2019 in line with the overall banking sector growth in NPLs.

The Bank called for ‘ appropriate remedial actions’ to avert excessive pressure on the solvency and liquidity of the sector.

“Despite the debt moratorium provided to businesses and individuals affected by the COVID-19 pandemic, the increase in non-performing loans (NPLs) poses a credit risk to the banking sector and the full impact of the pandemic on asset quality is yet to be determined. Without appropriate remedial actions being taken, the solvency and liquidity of the sector may come under pressure,” it said.

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