Bank of Ceylon delivers positive results in Q3

Chairman Ronald C Perera PC (left) and General Manager/CEO W.P. Russel Fonseka

• Profit Before Tax of Rs. 22.6 b; Total Assets base at Rs. 4.3 t
• Total Deposit base at Rs. 3.7 t; gross loans and advances at Rs. 2.4 t

Bank of Ceylon (BOC) said it concluded the third quarter of 2023 on a positive note, demonstrating resilience in a challenging economic environment. 

The Bank’s PBT stood at Rs. 22.6 billion, supported by a 20% increase in interest income. However, interest expenses outpaced growth, leading to a 53% decline in net interest income compared to Q3-2022. This reflects the Bank’s prudent approach of not transferring the full impact of interest rate hikes to its customers, prioritising their business revival efforts.

Net fee and commission income grew by 10%, mainly due to increased card-related transactions and retail banking services. However, income from trading and other operating income were impacted by exchange losses associated with the LKR appreciation.

The Bank proactively managed credit risk by applying management overlays to identify risk-elevated industries and reassessing exposures to high-risk borrowers. This resulted in a net reversal of impairment provisions during the period, due to business revival activities, stringent credit monitoring, and currency appreciation.

Chairman Ronald C. Perera PC emphasised that BOC has successfully brought many non-performing loans under control and supported affected business ventures through its Revival and Rehabilitation Unit.

Operating expenses increased by 13%, primarily due to inflationary pressures. Despite these challenges, the Bank maintained a healthy capital position, with Tier I and Total Capital Adequacy Ratios exceeding regulatory requirements.

Despite the LKR appreciation and low interest regime, the Bank’s deposit base grew by 11% to Rs. 3.7 trillion, demonstrating strong customer confidence. The Bank’s asset base reached Rs. 4.3 trillion, with loans and advances amounting to Rs. 2.3 trillion and investments of Rs. 1.8 trillion.

Commitment to SME development and infrastructure funding

The Bank remains committed to supporting the SME sector and financing large infrastructure projects, underscoring its role as a national champion. The recent launch of the “SME Energizer” loan scheme exemplifies this commitment, providing credit facilities to micro, small, and medium enterprises to stimulate economic growth and export earnings.

General Manager/CEO Russel Fonseka reaffirmed BOC’s commitment to fostering the SME sector and financing large infrastructure projects, despite the challenging operating environment.

Global recognition and brand strength

BOC’s resilience and contributions to the Sri Lankan economy have been recognised globally. The Bank was ranked among the world’s top 1000 banks by The Banker UK magazine for the 12th consecutive year, and it was named the No.1 Banking Brand in Sri Lanka for the 15th consecutive year by Brand Finance Lanka. The Bank’s brand value stands at over Rs. 50 billion, the highest in the sector.

Bank of Ceylon said it has navigated challenging economic conditions with resilience and continues to play a pivotal role in supporting Sri Lanka’s economic recovery. Its commitment to customers, SMEs, and infrastructure development is unwavering, and its strong financial performance and international recognition are testaments to its stability and growth potential.