Commercial Bank of Ceylon PLC has made a robust start to 2017, reporting profit of Rs 6.34 billion before VAT and NBT, reflecting growth of 17.93% over the first quarter of 2016.
VAT and NBT for the three months reviewed increased by 40.33% to Rs 1.12 billion due to an increase in the VAT rate and the higher profits earned during the period under review.
Consequently, profit before income tax for the quarter grew by lower percentage of 14.03% to Rs 5.22 billion, while profit after tax, at Rs 3.77 billion, increased by 16.73%. Overall, the Bank paid Rs 2.56 billion in taxes for the three months under review, an increase of 19.73% over the corresponding quarter of the previous year, which, coupled with the increased cost of funds this year,resulted in shrinking margins.
Commercial Bank Chairman Dharma Dheerasinghe said, “the Bank’s momentum in mobilising funds and lending has not slowed, even though the dynamics that apply to these areas are changing.”
Managing Director Jegan Durairatnam said that although the Bank’s Current and Savings Account (CASA) base had remained almost at the same levels, the new deposits mobilised cost significantly higher than those mobilised in the corresponding quarter of 2016.
Commercial Bank’s gross income for the three months reviewed improved by 27.14% to Rs 26.96 billion, with interest income growing by 31.25% to Rs 23.69 billion. With interest expenses up by a massive 51.25% to Rs 15.02 billion, net interest income grew only by 6.76% to Rs 8.66 billion.
Other income remained flat at Rs 2.87 billion despite a 38.45% improvement in fee and commission income, as a result of a drop in exchange income due a significantly lower rate of depreciation of the Sri Lanka Rupee in the quarter reviewed.The Bank reported total operating income of Rs 11.53 billion, an increase of 5.03%. Its impairment charge for the three months under review amounted to Rs 241.70 million, as against Rs 995.07 million for the first quarter of 2016.
Commercial Bank’s asset base, which crossed Rs 1 trillion at the end of 2016, grew by a further Rs 37 billion to Rs 1.05 trillion as at March 31, 2017. Total assets increased by Rs 124.24 billion over the preceding 12 months at an average of Rs 10.35 billion per month, reflecting YoY growth of 13.44%.
Deposits grew by Rs 41.25 billion over the three months to Rs 780.82 billion at an average of Rs 13.75 billion per month, higher than the monthly average of Rs 10.65 billion for the preceding 12 months.
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