ECONOMYNEXT – Sri Lanka’s Commercial Bank of Ceylon PLC said September 2017 quarter net profit grew 11.46% to Rs4.1 billion from a year ago.
Diluted earnings per share grew seven percent to Rs4.34. The stock last traded at Rs141.50. EPS for the nine months to September 2017 were Rs12.39 with net profit up 15.3% to Rs11.8 billion.
Interest income rose 29% to almost Rs27 billion while interest expenses grew at 29.5% to Rs16.4 billion and net interest income grew 28.3% to Rs10.6 billion over the period, according to interim accounts filed with the stock exchange.
Net fee and commission income rose 24% to 2.2 billion. Trading losses grew sharply during the quarter, up 286% to Rs920 million, the accounts showed.
Impairment charges for loans and other losses grew 160% to Rs658 million mainly from a growth in individual impairment with collective impairment kept at the same levels.
Interest expenses increased 40% to Rs47.4 billion mainly due to an increased demand for fixed deposits in the nine-month period, resulting in net interest income growing by 16.44% to Rs 28.242 billion, Commercial Bank said in a statement.
Chairman Dharma Dheerasinghe said the bank had restricted the growth of expenses to 6.88% or Rs949.1 million more than that of the corresponding period of last year.
“We continue to improve the quality of our loan book leading to further reductions in our NPL ratios and focussed on growing volumes in core business areas,” he said.
Commercial Bank Managing Director Jegan Durairatnam noted that the bank ended the nine months with capital ratios that were substantially higher than those required under Basel III which came in to effect in July this year.
He also said that the bank’s capital funds stood at over Rs90 billion and hence were well above the Rs20 billion specified under the minimum capital standards announced in a recent regulation for licensed banks in Sri Lanka.
Commercial Bank’s assets grew by Rs86.8 billion or 8.57% over the nine months to Rs1.099 trillion as at 30th September 2017.
The increase over the preceding 12 months was Rs145.7 billion at a monthly average of more than Rs12 billion, reflecting YoY growth of 15.28%.
Net loans and receivables from customers stood at Rs707.4 billion at the end of the review period, up Rs91.4 billion or 14.84% since end-December 2016, an average growth in excess of Rs10 billion per month.
“The loan book’s growth since September 2016 was Rs133 billion or 23.14%, at a monthly average of more than Rs11 billion over the preceding 12 months,” the bank said.
“The bank continued to make noteworthy progress in reducing impairment charges for loans and other losses during the nine months reviewed from Rs1.8 billion to Rs1.5 billion, an improvement of 17.14%.
“This was made possible by enhancements in the quality of its loan book, as evidenced by reduced NPL ratios,” the bank said.
The bank’s gross and net NPL ratios stood at 2.02% and 1% respectively at 30th September 2017, from 2.18% and 1.09% at end December 2016, and 2.49% and 1.26% a year ago.
Total deposits of the bank grew by Rs79 billion or 10.68% since end-December 2016 to Rs818.6 billion as at 30th September 2017, reflecting average monthly growth of Rs8.8 billion.
Growth of the deposit base over the preceding 12 months was Rs108.1 billion at an average of Rs9 billion per month, recording YoY growth of 15.22%.
“A drop in exchange profits as a result of a drop in swap premiums during the review period as against an increase in swap premiums last year, resulted in total operating income growing by 12.37% to Rs 35.962 billion,” the statement said.
Net operating income however increased by 14.14% to Rs34.467 billion through the improved impairment charges owing to lower NPL ratios, it said.
Shareholder funds crossed the Rs100 billion mark for the first time to Rs102.5 billion as at 30th September 2017, an increase of Rs 24 billion or 30.84%, consequent to the rights issue of shares, a reversal of mark to market losses on the bank’s Available for Sale (AFS) portfolio and the profits of the nine months.
The growth of shareholder funds over the preceding 12 months was Rs 26.756 billion or 35.31% YoY.
(COLOMBO, November 13, 2017)