An Echelon Media Company
Sunday December 10th, 2023

Sri Lanka’s Bank of Ceylon net down, strong loan growth in Dec

ECONOMYNEXT – Profits at Sri Lanka’s state-run Bank of Ceylon group fell 34 percent to 6.3 billion rupees in the December 2020 quarter as the lender provided for non-performing loans, but the bank had grown its loans book and also boosted capital, interim accounts show.

For the full year to December 2020, profits fell 27 percent to 17.1 billion rupees.

Interest income grew 7.3 percent to 60.2 billion rupees in the December 2020 quarter, with interest expense falling 1.9 percent to 36.8 billion rupees, allowing the bank to grow net interest income 25 percent to 23.3 billion rupees.

Fee and commission income fell 24 percent to 4.0 billion rupees.

Loans and advances grew 27 percent to 2.0 trillion rupees. The Bank of Ceylon is a key financier of the state and state enterprises. Debt and other instruments which include government securities grew 26 percent to 725 billion rupees.

“Both Government and private sector lending contributed to the growth reported during the year and working capital and personal lending showed a boost in line with credit facilities offered under “Diviudana” loan scheme, BoC Personal loans, Project financing under corporate lending,…” the banks said in a statement to the Colombo Stock Exchange where debentures are listed.

BoC said it took a “lead in delivering the Government mandate for reviving the economic activities paused due to the pandemic, the Bank has disbursed more than Rs. 40 billion under the ‘Saubagya COVID -19 Renaissance Facility’ for working capital to Covid-19 hit businesses.

In the December quarter the bank had increased loan loss provisions to 8.4 billion rupees from 3.4 billion rupee a year earlier. Provisions for other impairments were raised to 2.3 billion rupees from 0.48 billion.

For the full year provisions were raised to 28.2 billion rupees from 18.2 billion rupees. Other provisions were raised to 3.3 billion rupees from 0.4 billion a year earlier

The bank said under a long standing prudential practices it had provide for expected loss assessment under Sri Lanka accounting standards, but also managed to keep its non-performing assets ratio stable.

Accumulated impaired loans were 126 billion rupees of which 105.8 was in Stage 03.

Helped by strong loan growth the bank kept its non-performing loan ratio to 4.76 percent, down from 4.79 percent a year earlier.

Balance sheet growth was supported by a 23 percent growth in deposits to 2.4 trillion rupees.

Net assets grew 9.3 percent to 169 billion rupees, during the year. Group gross assets grew 22.9 percent to 3.025 trillion.

At bank level the Tier I capital fell to 9.48 percent of risk weighted assets from 11.16 percent. Total capital adequacy was maintained at 14.1 percent, above regulatory minimum, with the sale of 15 billion rupee bond, though down from 15.58 percent a year earlier. (Colombo/Mar28/2021)

Leave a Comment

Your email address will not be published. Required fields are marked *

Leave a Comment

Leave a Comment

Cancel reply

Your email address will not be published. Required fields are marked *

ADB USD200mn loan for Sri Lanka economic stabilization efforts

ECONOMYNEXT – The Asian Development Bank (ADB) has approved a US 200 million dollar concessional loan to Sri Lanka to help stabilize the country’s finance sector.

The Financial Sector Stability and Reforms Program comprises two subprograms of IS 200 million dollars each, according to a statement by the ADB.

“The program’s overarching development objective is fully aligned with the country’s strategy of maintaining finance sector stability, while ensuring that banks are well-positioned for eventual recovery,” ADB Country Director for Sri Lanka Takafumi Kadono was quoted as saying in the statement.

“The expected development outcome is a stable financial system providing access to affordable finance for businesses in various sectors of the economy.”

The ADB statement continues:

“Subprogram 1 targets short-term stabilization and crisis management measures that were implemented in 2023, while subprogram 2 is planned to be implemented in 2024 and focuses on structural reforms and long-term actions to restore growth in the banking sector.

The program will help strengthen the stability and governance of the country’s banking sector; improve the banking sector’s asset quality; and deepen sustainable and inclusive finance, particularly for women-led micro, small, and medium-sized enterprises.

According to the International Monetary Fund’s (IMF) latest review, Sri Lanka’s economy is showing tentative signs of stabilization, although a full economic recovery is not yet assured.

The program is a follow-on assistance from ADB’s crisis response under the special policy-based loan that was approved for Sri Lanka in May 2023.

It is aligned with the fourth pillar of the IMF’s Extended Fund Facility provided to Sri Lanka to help the country regain financial stability.

It is also in line with the government’s reform agenda, including strengthening the operational independence of the Central Bank of Sri Lanka (CBSL) and its designation as the country’s macroprudential authority.

In designing this subprogram 1 loan, ADB has maintained close coordination and collaboration with the IMF to design targeted regulatory reforms for the banking sector—including the asset quality review—and with the World Bank on strengthening the deposit insurance scheme.

“The loan is accompanied by a $1 million grant from ADB’s Technical Assistance Special Fund to provide advisory, knowledge, and institutional capacity building for Sri Lanka’s Ministry of Finance and CBSL.”

Continue Reading

Sri Lank in blackout as power grid hit by cascading failure

ECONOMYNEXT – Sri Lanka suffered a blackout as Saturday evening as the state-run Ceylon Electricity Board grid was hit by a cascading power failure.

The cascading failure is believed to have been triggered by the failure of the Kothmale-Biyagama transmission line.

“The Ceylon Electricity Board wishes to inform our customers that due to the failure of Kotmale – Biyagama main transmission line, an island wide power failure has occurred,” CEB Spokesman Noel Priyantha said.

“Step by step restorations are underway and it may take few hours to completely restore the power supply.”

With hydro plants running flat out, a outage of the line tends to create a big imbalance in the demand and supply, leading to tripping of more lines and generators.

Lines can trip due to lightening strikes, or equipment failures.

Sri Lanka last suffered a cascading failure in December 2021, due to the failure of the same transmission line.

RelatedSri Lanka power blackout as grid hit by cascading failure

Continue Reading

Sri Lanka to host regional Food and Agriculture Organization conference

ECONOMYNEXT – Sri Lanka will host the 37th session of the Asia Pacific Regional Conference (APRC) of the United Nations Food and Agriculture Organization (FAO), from February 19-22, 2024 in Colombo.

The Conference will bring together agriculture ministers and officials from 46 countries across the region to discuss challenges in food and agriculture.

“The 37th APRC will provide a vital platform for regional collaboration, benefitting the agricultural landscape, fisheries sector and environment of Sri Lanka,” Minister Mahinda Amaraweera said at a press briefing on Friday (8) to announce the conference.

FAO has had an active presence in Sri Lanka for over 40 years. “FAO has supported the country in the implementation of Good Agricultural Practices (GAP), and the development of the fisheries sector for growth and climate resilience,” Vimlendra Sharan, FAO Representative for Sri Lanka and the Maldives said.

“The APRC conference will be an opportunity to highlight the innovative approaches introduced in partnership with the government.”

By hosting APRC, Sri Lanka hopes to demonstrate the country’s dedication to the growth of sustainable agriculture, and showcase its commitment to sustainable agricultural development.

The APRC agenda will include a forum on agritourism, especially requested by the Sri Lankan government.

Continue Reading