ECONOMYNEXT– Sri Lanka’s Commercial Bank said March 2017 quarter group net profit rose 17.1 percent to 3.8 billion Rupees from a year ago, but the increased cost of funds had reduced margins.
Net interest income was up 6.8 percent to 8.7 billion Rupees over the period, according to interim accounts filed with the stock exchange.
“The bank reported profit of 6.341 billion Rupees before value-added tax and nation building tax, reflecting growth of 17.93 percent in the first quarter of 2016,” a statement said.
VAT and NBT for the three months reviewed increased 40.33 percent to 1.119 billion Rupees due to an increase in the VAT rate and higher profits earned during the period under review, it said.
“Consequently, profit before income tax for the quarter grew by at a lower percentage of 14.03 percent to 5.222 billion Rupees, while profit after tax is at 3.775 billion Rupees, increasing by 16.73 percent.”
“We have learned to live with the reality of reduced margins and higher taxes, through our strong focus on operational excellence which continues to boost business volumes,” Commercial Bank Chairman Dharma Dheerasinghe said.
“The bank’s momentum in mobilising funds and lending has not slowed, even though the dynamics that apply to these areas are changing.”
Commercial Bank Managing Director Jegan Durairatnam said that although the bank’s Current and Savings Account (CASA) base had remained almost at the same levels, the new deposits mobilised cost significantly higher than those mobilised in the corresponding quarter of 2016.
“The ability of the bank to maintain its growth in this scenario reaffirms the emphasis we place on holistic management of our core business areas,” he said.
(COLOMBO, May 15, 2017)