The Commercial Bank of Ceylon PLC has reported profit before VAT and NBT of Rs 13.119 billion for the nine months ended 30th September 2014 in a performance befitting its status as Sri Lanka’s largest private bank.
In spite of a healthy10.38% growth inOperating Income, Profit before tax grew by 7.77 % due to the imposition of Nation Building Tax (NBT) effective January this year, the Bank said in a filing with the Colombo Stock Exchange.
Profit after tax improved by 7.89% to Rs 7.805 billion despite lower margins during the period under review resulting in gross income growing 2.14% to Rs 54.644 billion, the Bank said.
Net interest income for the nine months was up 6.23% to Rs 19.789 billion, and other income comprising of commissions, exchange profit, recoveries and gains on trading, grew by a noteworthy 21.63% to Rs 8.366 billion, largely due to gains from financial investments.
Commercial Bank Chairman Mr Dharma Dheerasinghe described the Bank’s nine-month performance as “characteristically robust,” with higher business volumes compensating to some degree, for the reduced margins.
The Bank’s Managing Director/CEO Mr Jegan Durairatnam said momentum had picked up during the third quarter, during which pre and post-tax profit had grown by a healthy 21.62% and 20.40% respectively over the corresponding three months of 2013, to Rs 4.739 billion and Rs 3.326 billion.
Net operating income for the period improved by 9.89% to Rs 24.713 billion, despite an increase in impairment charges by 14.04% to Rs 3.443 billion, mainly due to a change in the basis of computation of provisioning for individual impairment. This change is intended to improve provision cover.
Operating expenses for the period under review grew by 9.35% to Rs 11.594 billion.
Total assets increased by Rs 140.683 billion or23.19% over the nine months to Rs 747.290 billion, from Rs 606.607 billion at 31st December 2013, averaging a growth of over Rs 15 billion a month.
Total loans and receivables to banks and customers amounted to Rs 482.940 billion at the end of the period under review, an increase of Rs 63.435 billion or 15.12% since end December 2013. This represents an average loan book growth of Rs 7 billion a month during the period.
Total deposits grew by Rs 53 billion or 11.75% over the nine months at an average of almost Rs 6 billion a month, to Rs 504.161 billion as at 30th September, 2014.
The Bank’s Tier I capital adequacy ratio stood at 12.97% while the total capital adequacy ratio (Tier I + Tier II) stood at 16.13%, both well above the minimum statutory requirement of 5% and 10%.
Commercial Bank improved gross and net NPL ratios to 3.84% and 2.10% respectively, from 3.88% and 2.12% at the end of 2013. The interest margin narrowed to 3.91% from 4.53% for the whole of 2013.
Shareholder funds grew by 14.36% to 69.084 billion in the nine months reviewed. The Net Asset Value per share improved by 11.27% to Rs 79.87.
The Bankhas declared an interim dividend of Rs 1.50 per share in respect of the period under review. The Commercial Bank share which traded as Rs 155.90 (voting) and Rs 113.90 (non-voting) at the end of the third quarter, traded at Rs 174.00 and Rs 118.50 respectively on 13th November 2014. Commercial Bank has the highest market capitalisation among companies in Sri Lanka’s financial services sector and ranks No.3rd among all listed companies.
Ranked the ‘Strongest Bank in Sri Lanka in 2014’ by The Asian Banker and the only Sri Lankan bank to be ranked among the Top 1000 banks of the world for four consecutive years, Commercial Bank is also the most valuable private sector brand in the country in 2014. Commercial Bank operates a network of 239 branches and 605 ATMs in Sri Lanka. The Bank has won multiple awards as Sri Lanka’s best bank over several years, was adjudged one of the country’s 10 best corporate citizens by the Ceylon Chamber of Commerce in 2013 and has been rated the Most Respected Bank in Sri Lanka by LMD for the past 10 years. It has also been the second Most Respected Corporate entity in the country overall for the past four years in the LMD rankings, and has been rated No 1 in Sri Lanka for Honesty in 2013 and 2014 by the Magazine.
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