COMBank 9-month PBT up 25% to Rs 10.9 b

Commercial Bank has posted impressive third quarter results, with robust growth in gross income and profits following noteworthy increases in lending and strong gains in foreign exchange income.

Sri Lanka’s largest private sector bank has reported pre-tax profit of Rs. 10.938 billion for the nine months ending 30 September 2012, reflecting growth of 25.48%. Profit after tax for the period was up 25.41% to Rs. 7.646 billion.

Reaffirming its status as one of the best performing entities in Sri Lanka’s financial sector, the bank posted gross income of Rs. 45.610 billion for the nine months, an increase of Rs. 12.7 billion or 38.61% over the corresponding period of last year.

Within this, interest income grew by 35% to Rs. 37.216 billion, consequent to substantial expansion of the bank’s loans portfolio, while non-interest income improved by 70.57% to Rs. 7.677 billion, facilitated by foreign exchange income of Rs. 4.097 billion, which represented a growth of 180.59%.

“Our results continue to be encouraging on all fronts, even in a changing environment. Building on our momentum with a focus on core banking, the bank posted a solid monthly average growth in both loans and deposits amounting to Rs. 4.5 billion and Rs. 5.9 billion respectively during the period under review,” said Chairman Dinesh Weerakkody. “Such exemplary performance reinforces the key role played by Commercial Bank in the national economy.” The bank’s Managing Director and CEO Ravi Dias added: “This nine-month performance was achieved despite a significant increase in the cost of interest-bearing liabilities due to the prevailing high market interest rates.”

The bank’s net interest income for the nine months improved by 19.33% to Rs. 16.013 billion, while  interest expenses grew by 50.06% to Rs. 21.202 billion, in response to the comparatively higher interest rates that prevailed.

Within non-interest income, an increase in the volume of foreign currency operations of the bank and the translation gains recognised consequent to the depreciation of the Sri Lanka Rupee against the US Dollar during the nine months, combined to boost foreign exchange income.  In addition, the other income of the bank, which mainly comprises of commission income and investment income, recorded an increase of 17.75% and reached Rs. 3.580 billion.

Commercial Bank’s Gross Loans and Advances stood at Rs. 329.071 billion as at 30 September 2012, an increase of Rs. 41.108 billion or 14.28% from 31 December 2011. Total deposits grew by Rs. 53.442 billion or 16.78% over the same period to Rs. 371.904 billion. Total assets increased by 12.97% from Rs. 441.099 billion at 31 December 2011 to Rs. 498.299 billion at the end of the review period.

Net provisions for bad and doubtful debts increased to Rs. 1.250 billion as against a net reversal of Rs. 480.7 million for the first nine months of 2011, principally as a result of a more stringent provision policy adopted by the bank.

Non-interest expenses increased by 17.89% to Rs. 10.005 billion, largely on account of increased personnel costs and premises, equipment and establishment expenses linked to the expansion of the bank’s delivery channels in Sri Lanka. The bank opened 11 new service points and added 38 new terminals to its ATM network during the nine months reviewed.

The bank’s total capital adequacy ratio stood at 13.51% as at 30 September 2012, as against the prescribed minimum of 10%. The gross and net non-performing advances ratios increased to 3.72% and 2.18% respectively at the end of the third quarter. Return on assets before tax and return of equity improved to 3.1% and 21.41% respectively.

As a Group, the Commercial Bank of Ceylon PLC, its subsidiaries and associates recorded pre-tax profit of Rs. 10.942 billion, a growth of 24.99%. Group profit after tax for the period increased by 24.83% to Rs. 7.624 billion.

The largest private bank in Sri Lanka, Commercial Bank is the only Sri Lankan bank to be listed two years consecutively in the world’s Top 1000 Banks. The bank operates a network of 225 service points in Sri Lanka and a network of 541 ATMs, the single largest ATM network operated by a bank in the island. It also operates 17 service points in Bangladesh.

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.