COMBank’s 1Q pre-tax profit up 40% to Rs 4.145 b

Growth in interest income on loans and advances, complemented by gains in foreign exchange income continued to underpin financial performance at Commercial Bank of Ceylon PLC, enabling the country’s benchmark private bank to post strong results for the first quarter of 2012.

The bank has reported profit before tax of Rs. 4.145 billion for the three months ended 31 March 2012, an increase of 40 per cent over 1Q 2011 while profit after tax for the three months grew 38 per cent to Rs. 2.843 billion.

Interest income improved by Rs. 2.422 billion or 27.43 per cent to Rs. 11.25 billion, mainly as a result of the interest income on loans and advances growing by a noteworthy 42.44 per cent to Rs. 9.075 billion.

“These results reflect a continuation of the momentum achieved in 2011, even under challenging market conditions,” Commercial Bank’s Managing Director and CEO Ravi Dias said. “Loan growth was steady in the quarter reviewed and the challenge for the rest of the year would be to maintain the cost of funds.”

The total deposits of the bank stood at Rs. 351.040 billion as at 31 March 2012, reflecting a growth of 10.23 per cent from Rs. 318.461 billion as at 31 December 2011. Gross loans and advances of the bank too increased and stood at Rs. 308.670 billion, reflecting a growth of 7.19 per cent. Total assets of the bank reached Rs. 474.952 billion as at 31 March 2012, recording a growth of 7.67 per cent compared to Rs. 441.099 billion as at 31 December 2011. Elaborating on other key indicators, Commercial Bank’s Chief Financial Officer Nandika Buddhipala said net interest income grew by 17 per cent to Rs. 5.065 billion. Meanwhile, non-interest income (commissions, investment income, foreign exchange and other income) recorded a growth of Rs. 1.927 billion or 130 per cent to Rs. 3.406 billion mainly as a result of translation gains following the depreciation of the Sri Lanka Rupee against the US Dollar in the quarter under review, he said.

Provisions on account of bad and doubtful debts (net of recoveries) too increased by Rs. 704.6 million during the period under review compared to the corresponding period in 2011.

Taken as a Group, the Commercial Bank, its subsidiaries and associates posted pre-tax profits of Rs. 4.155 billion for the quarter reviewed, recording a growth of 39.76 per cent. Profit after tax for the three months was up 37.99 per cent to Rs. 2.85 billion. Commercial Bank is the largest private bank in Sri Lanka, and the only Sri Lankan bank listed in the world’s Top 1,000 banks. It operates a network of 216 service points in Sri Lanka and a network of 516 ATMs, the single largest ATM network operated by a bank in the island.

The bank has been adjudged ‘Best Bank in Sri Lanka’ for 14 consecutive years by ‘Global Finance’ Magazine and has won multiple awards as the country’s best bank from ‘The Banker,’ ‘FinanceAsia,’ ‘Euromoney’ and ‘Trade Finance’ magazines.