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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.

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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)

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