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Thursday, 14 November 2013 01:15 - - {{hitsCtrl.values.hits}}
Improved business volumes in the third quarter of 2013 have enabled the Commercial Bank of Ceylon to narrow the gap on its profit performance compared to the corresponding period of last year, during which translation gains on foreign exchange earnings was a major contributory factor to the bottom line.
Despite many challenges faced by the banking industry, Sri Lanka’s largest private bank posted a pre-tax profit of Rs. 10.404 billion for the nine months ended 30 September 2013, only marginally lower than the Rs. 10.660 billion recorded in the corresponding period of 2012.
Post tax profit at the end of the third quarter stood at Rs. 7.233 billion as against Rs. 7.456 billion in the first nine months of last year, the bank reported in its Interim Financial Statements.
“What these figures clearly indicate is that operationally, the bank has achieved noteworthy growth in terms of all business volumes when the industry faced many challenges,” Commercial Bank Chairman Dinesh Weerakkody said. “Due to last year’s foreign exchange gains, the gap in net profit was 20% at the end of the first quarter of the current year, and 13.5% at the end of the first half. The bank has now narrowed this gap to under 3% despite the tough conditions that prevailed.”
The bank improved gross income by Rs. 18.8 billion or 21.72% in the third quarter, accelerating the pace of growth. Gross income for first nine months period increased by 15.30% to Rs. 53.498 billion.
“The bank’s performance reflects its ability to maintain operational momentum by leveraging its focus on banking fundamentals to attract business and be competitive,” Commercial Bank Managing Director/CEO Ravi Dias said.
According to the bank’s Interim Financial Statements for the nine months ended 30 September 2013, interest income reflected a healthy growth of 20.54% to Rs. 46.146 billion, mainly due to an increase in interest earning assets during the period under review. The growth in deposits which averaged Rs. 5 billion a month resulted in interest expenses growing by 29.78% to Rs. 27.5 billion for the nine months.
Total operating income grew by 2.87% to Rs. 25.507 billion for the nine months while impairment charges for loans and other losses increased to Rs. 3.019 billion from Rs. 2.889 billion.
The increase in total expenses was restricted to 8.55%, from Rs. 9.767 billion in the first nine months of last year to Rs. 10.603 billion at the end of the third quarter of 2013.
Total deposits grew by Rs. 53.568 billion to Rs. 448.943 billion as at 30 September 2013. Gross loans and advances increased by Rs. 28.282 billion or 7.32% over the nine months to Rs. 414.698 billion, crossing the Rs. 400 billion mark. Total assets of the bank increased by 15.58% to Rs. 591.490 billion as at 30 September 2013.
The bank’s Tier I and Tier II Capital Adequacy Ratios stood at 13.11% and 16.87% respectively at the end of the review period, well above the minimum levels prescribed by the Central Bank. The Gross NPL Ratio was 4.20%, and the Net NPL Ratio 2.46%. The interest margin for the period was 4.52% while Return on Assets (before tax) and Return on Equity stood at 2.52% and 17.52% respectively.
At Group level, the Commercial Bank, its subsidiaries and associates posted pre-tax profit of Rs. 10.449 billion for the nine months reviewed. Profit after tax for the period was Rs. 7.246 billion.
The largest private bank in Sri Lanka and the only Sri Lankan bank to appear three years consecutively in the world’s Top 1,000 Banks, Commercial Bank operates a network of 232 branches and service points and a network of 576 ATMs in Sri Lanka. The bank also operates 18 outlets in Bangladesh. The bank has won multiple awards as the country’s best bank over several years.
