Bank of Ceylon, having completed 78 successful years, posted an Rs.30.3 billion Profit Before Tax (PBT) closed 2017.
The Bank has recorded an impressive 8% growth in PBT, when adjusted for the one off gain recorded in 2016 (ie: disposal of Mireka Capital Lanka (Pvt) Ltd).
With this, BoC continues to maintain its position as the highest profit earning single entity of the country. Profit after tax for the year stood at Rs.21.3 billion, General Manager Senarath Bandara stated.
The total operating income has grown by 3% within the year notching Rs. 74.3 billion mark. Net interest income has contributed to 78% of the total operating income and the ‘YoY’ growth of the net interest income has been 8%. “Although we are moving fast towards digitally enabled banking culture, the weightage we have placed on improving the quality of human touch has never been compromised.”
“We believe the human factor, yet has much more to do with customer care and tangibility”, Chairman, Ronald C. Perera.
In March 2017 Standing Deposit Facility Ratio (SDFR) and Standing Lending Facility Ratio (SLFR) was increased by 25 bps up to 7.25% and 8.75% respectively.
Followed by the change in policy rates, the market interest rates moved further upward and the high interest rate regime which prevailed throughout the year except for the latter part of the year in which interest rates recorded a slight slowdown.
Whilst, the increasing trend in market interest rates has resulted in an increase in both interest income and expenses, the net interest margin of the Bank has only shredded by 10 bsp over the previous year due to its effective management of cost of funding. Interest income earned through investment activities particularly in Treasury Bills and Treasury Bonds also contributed towards the growth in the net interest income.
In the midst of a subdued performance reported from the trade sector, the Bank has reported a growth of its net fee and commission income due to the timely and meticulous strategies it has adopted to diversify their avenues of revenue.
Net operating income for the period reflected a marginal reduction of 4% mainly due to Rs. 4.9 billion increment reported in impairment charges.
The successful credit management policies adopted has enabled the Bank to maintain the NPA ratio at 2.8%, as in the previous year.
The Bank has been able to achieve a 9% reduction in its total operating expenses due to efficiencies achieved via many process changes introduced. Also depicting the Bank’s effective cost benefit management, the cost to income ratio has come down to 38% from 43% the previous year.
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