EconomyNext – Sri Lanka’s Commercial Bank group said December 2014 quarter net profit rose 2.15 percent to 3.4 billion rupees from a year ago supported by higher fee income and lower provisioning for bad loans.
It said in a stock exchange filing diluted earnings per share for the quarter were 3.91 rupees.
Net interest income rose 13 percent to 7.3 billion rupees as interest expenses fell while interest income rose marginally.
Net fees and commission income for the December quarter rose 23 percent to 1.4 billion rupees while impairment charges for bad loans fell eight percent to 1.3 billion rupees from the year before.
In the year to 31 December 2014 Commercial Bank’s diluted EPS were 12.95 rupees with net profit up six percent to 11.2 billion rupees from the previous year.
The profit growth came "despite marginally lower interest income due to a drop in the rate of returns on interest earning assets," a statement said.
"However, the strong performance of the bank’s loan book, which grew by 22.24 percent to 463.6 billion, enabled the bank to improve its net interest income by 5.2 percent to 27.222 billion rupees."
Interest expenses reduced as the bank was able to mobilise low cost funds.
The statement said the bank’s deposits went up 17.34 percent to 529.4 billion rupees while assets increase by 31.29 percent to 795.6 billion rupees.
“Against a background of sharply declining interest margins, this healthy expansion of volume acted as a boost that raised the bank’s overall profits," Commercial Bank Chairman Dharma Dheerasinghe said.
The bank had developed a strategy to diversify its activities in the year, with a particular focus on fee-based income, he noted.