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Wednesday July 24th, 2024

Sri Lanka’s Commercial Bank net down 23-pct; loans contract

ECONOMYNEXT – Profits at Commercial Bank of Ceylon, Sri Lanka’s largest private bank by assets, fell 23 percent to 3.129 billion rupees in the March 2019 quarter from a year earlier, as credit contracted, bad loans grew and a new tax hit profits, interim accounts showed.

The group reported earnings of 3.05 rupees per share for the quarter down 25 percent.

Interest income grew 13.8 percent to 31.97 billion rupees interest in the quarter ended March 2019 from a year earlier, expense grew at a faster 16.07 percent to 19.95 billion rupees and net interest income grew at a slower 10.4 percent to 12.1 billion rupees.

Loans and advances contracted to 861 billion rupees from 867 billion rupees from three months earlier.

Cash balances grew 15.4 percent to 51.8 billion rupees and interbank loans grew 41 percent to 28.1 billion rupees.

Chief executive S Renganathan said the bank followed a "more cautious approach in expanding its advances portfolio" amid "challenging economic conditions."

"Despite the decline in advances, I am happy to say that the Bank has continued to support the SME sector, as reflected in the satisfactory growth of this portfolio during the quarter," he said.

Loan losses grew 68 percent to 1.89 billion rupees in the quarter from 1.126 billion rupees a year earlier.

At bank level the gross non performing loan ratio rose to 4.14 percent from 3.24 percent.

Total capital adequacy fell to 15.1 percent from 15.6 percent, but is higher than the minimum 14 percent.

Sri Lanka has seen monetary instability due to the operation of a soft-pegged exchange regime with real effective exchange rate targeting, which led to a collapse of the currency, killing an economic recovery, which was worsened by a political crisis in the last quarter of 2018.

Fee and commission income grew 2.5 percent 2.93 billion rupees.

Financial sector value added tax, nation building tax and a new debt repayment tax rose 39 percent to 1.78 billion rupees.

The bank grew deposits 3.14 percent during the quarter to 1,025 billion rupees, as credit contracted.

When a country recovers from a balance of payments trouble, deposits at bank grow faster than loans, while during a currency crisis, loans will growth with printed money from term reserve repurchase injections from the central bank or its outright treasury bill purchases.

The when banks or other savers buy Treasury bills previously held by the central bank, the currency strengthens, imports and economic activity falls and a balance of payments surplus is generated.

Total assets grew 1.78 percent to 1,221 billion rupees during the quarter. Net assets grew 0.73 percent to 121.4 billion rupees. (Colombo/May15/2019 – Update III)

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Sri Lanka presidential candidate cash deposits not updated in 43 years: MP

MP Dullas Alahapperuma

ECONOMYNEXT — The cash deposits Sri Lanka’s presidential candidates are required to pay have not been revised in 43 years, opposition MP Dullas Alahapperuma said, calling for a significant increase in order to save money and to prevent proxy candidates.

Alahapperuma told parliament on Wednesday July 24 that, as per the Presidential Elections Act No. 15 of 1981, a candidate nominated by a recognised political party has to deposit only 50,000 rupees while an independent candidate, or a candidate nominated by any other party or by an elector, must pay only 75,000 rupees.

The MP said the cabinet of former president Gotabaya Rajapaksa had approved an amendment to the act to increase these amounts.

“The election commission proposed that this be increased to 2.5 million rupees for political parties and 3 million for independent candidates. This was a pertinent proposal. There were 35 candidates who contested the last election,” he said.

The Act notes that “Where the number of votes polled by any candidate does not exceed one-eighth of the total number of votes polled at the election, the deposit made in respect of such candidate shall be declared forfeit and shall be transferred by the Commissioner from the deposit account to the Consolidated Fund, and in every other case the deposit shall be returned to the person who made the deposit, as soon as may be after the result of the election is declared.”

At the 2019 presidential election, said Alahapperuma, the deposits made by all candidates besides the top two contenders were transferred to the Consolidated fund.

“The number of candidates might be 80 or 85 this election. Many candidates have no basis for contesting, and it costs a vast sum of money to print ballots and other expenses, not to mention the time consumed for counting votes. This is not just to prevent proxy parties from contesting but also to save a lot of national wealth,” he said.

Leader of the House Susil Premajayantha responding to Alahapperuma said, however, that it would not be possible to pass the proposed amendment in time for the 2024 presidential election.

“The election commission made this proposal some time ago. But we know that to gazette a bill, we need to first draft the bill, the cabinet has to decide on it, send it back to the Legal Draftsman, and receive clearance from the Attorney General. So there is no time to bring this amendment for the upcoming presidential election. You can propose it at the next one,” he said. (Colombo/Jul24/2024)

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Sri Lanka deaf driver license project to be expanded islandwide

ECONOMYNEXT – A pilot project that allowed hearing-impaired persons to obtain light-vehicle driving licenses has been successful and will be rolled out island-wide, Sri Lanka’s Motor Traffic Department said.

The project was implemented in the Gampaha District initially where 50 licenses were provided to drivers who qualified.

The project was expanded to the Kurunegala District, where 150 drivers obtained licences. The drivers were given a probation period.

“Actually, this was a very successful project. It has been almost a year and we haven’t received a single complaint yet,” Motor Traffic Department Commissioner – Driving Licence Wasantha Ariyarathna told reporters on Wednesday.

“We plan to roll it out to all 25 districts islandwide.”

The issuance of driver’s licenses to hearing impaired persons will be done on a bi-annual renewal basis.

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Sri Lanka election commission to announce poll date before weekend

File photo of polling booth

ECONOMYNEXT — Sri Lanka’s Election Commission will announce the date of the election before the end of this week, commission chairman R M L Ratnayake told a private news network.

Ratnayake told the privately owned NewsFirst Wednesday July 24 morning that the gazette notification in this regard would be published before the weekend.

“As I stated before, we will announce the date before the end of this week. There is no backtracking at all. We have selected a date that is nearest and most suitable after September 17 for the election,” he said.

Ratnayake told the media at a press conference on July 16 that the commission will publish the notice announcing nomination and election dates before the end of July.

“Our first task is to publish the notice on the election. From the day the notice is published, nominations have to be accepted between 16 and 21 days. The election should be held within four to six weeks of from the day of accepting nominations,” said Ratnayake.

“The candidates must have enough time to do their campaigns after handing over nominations. Time is also needed to cast postal votes and carry out other duties. The election date should also be convenient for the voters. For the acceptance of nominations, we have to consider cultural factors unique to a country like Sri Lanka. Some people consider things like the Rahu period. So we have to find a date that is suitable for everyone,” he said.

Ratnayake said the election commission intends to issue the notice before the end of July.

“This notice will contain the nominations date and the election date. We plan to then hold the election on the most suitable day after September 17.

“Some people had suggested that we have delayed this to end July to the benefit of one party or another. I want to point out that we can delay we can extend it to August 20 if needed,” he said. (Colombo/Jul24/2024)

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