Sri Lanka’s Bank of Ceylon profits dip with loss provisions

ECONOMYNEXT – Profits at Sri Lanka’s state-run Bank of Ceylon group fell 9.6 percent to 4.44 billion rupees in the June 2017 quarter amid higher loan loss provisions, as interest rates rose following a period of strong loan growth.

Group interest income rose 29 percent to 43.3 billion rupees and interest expenses rose at a faster 34 percent to 27.7 billion rupees and the bank grew its net interest income 21 percent to 15.6 billion rupees.

Net fee income fell 9.9 percent to 1.46 billion rupees. Gains from trading was positive at 1.1 billion rupees but was 19 percent from a year earlier. Other operating income was up 59 percent to 1.74 billion rupees.

Loans grew by a strong 11.2 percent to 1,143 billion rupees in the June 2017 quarter. Customer deposits grew at a lower 10.4 percent to 1,406 billion rupees.

Loan loss provisions rose sharply to 4.4 billion rupees from a reversal of 180 million rupees a year earlier, with specific provision rising to 1.88 billion rupees from a reversal of 434 million rupees.
The bank made 2.56 billion rupees of general provisions to cushion against any losses.

The gross non-performing loan ratio rose to 3.32 percent from 2.88 percent.

The banks had 245 billion rupees in its investments held to maturity portfolio which usually refer to Treasury bonds.

Gross assets grew 8.1 percent to 1,854 billion rupees and net assets grew 9.4 percent to 113 billion rupees. Core capital adequacy fell to 8.29 percent from 8.72 percent and total capital adequacy fell to 11.79 percent from 12.34 percent. (Colombo/Aug15/2017)

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