ECONOMYNEXT – Sri Lanka’s Commercial Bank of Ceylon reported profits of 8.7 billion rupees in the December 2022 quarter, up 68.18 percent from a year ago helped mainly by tax reversal despite provisions for bad loans amid a currency crisis.
Commercial Bank group reported earnings of 7.08 rupees per share in interim accounts for the quarter.
Net fee and commission income grew 71 percent to 4.0 billion rupees.
Interest income grew 97.14 percent to 72.1 billion rupees, interest expense grew a fast 183.96 percent to 50.2 billion rupees and net interest income grew 15.72 percent to 21.8 billion rupees.
“This is partly due to an increase in interest-earning assets, rise in interest rates and higher foreign currency income due to the depreciation of the Rupee” Commercial Bank interim report said.
Loans and advances grew 12.2 percent in rupee terms, partly due to the inflation of dollar-denominated loans as a soft peg with the US dollar collapsed.
Loan loss provisions were up 175.15 percent to 19.6 billion rupees in the quarter and for the year 2022, the provisions were up by 186.1 percent to 71.9 billion rupees.
“This is the highest ever impairment provision in a year in the history of the institution”
“Discounting the impact of the Rupee depreciation, the loan book recorded a marginal growth during the year, amidst a sharp decrease in credit to the private sector.”
Net fee and Commission income grew from 3.6 billion to 6.2 billion rupees.
“This was with an increase in trade related activities and the impact of the depreciation of the Rupee on fees received in foreign currency.
The Bank’s Tier 1 Capital Ratio, and the Total Capital Ratio stood at 11.389 percent and 14.657 percent respectively, both above the statutory minimum ratios of 10 percent and 14 percent respectively
In terms of asset quality, the Bank’s impaired loans (Stage 3) ratio stood at 5.26 percent compared to 3.85 percent at end 2021, while its impairment (Stage 3) to Stage 3 loans ratio stood at 39.50 percent compared to 42.76 percent a year earlier.
Commercial Bank’s total assets grew 24 percent to 2.4 billion rupees. (Colombo/Feb 27/2023)