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Sri Lanka’s Commercial Bank net down 25-pct amid bond gain cushion

ECONOMYNEXT – Sri Lanka’s Commercial Bank of Ceylon Plc, the island’s largest private lender said profits in the September 2020 quarter fell 23 percent from a year ago to 3.69 billion rupees amid higher loan loss provisions, despite strong capital gains on bonds and forex profits.

The bank’s deposits grew amid weak consumption in the country and most of it was invested in bonds.

Commercial Bank reported earnings of 3.51 rupees per share for the September 2020 quarter, and 10.52 rupees per share for the nine months to September on total profits which fell 2.9 percent to 11.06 billion rupees.

Interest income for the September 2020 quarter fell 2.2 percent to 31.6 billion rupees, interest expenses fell 13.8 percent to 17.6 billion rupees and the bank grew net interest come 14 percent to 14.0 billion rupees.

Loans and advances grew 0.6 percent to 899 billion rupees in the nine months to September 2019.

Loans loss provisions rose 147 percent to 7.4 billion rupees. The bank’s gross non-performing loan ration grew to 5.2 percent from 4.9 percent in December, the bank said.

Commercial Bank’s bond portfolio soared to 269 billion rupees from 107 billion rupees, as credit demand fell and deposits went up. Deposits grew 14 percent to 1.22 billion rupees from January to September.

Capital gains grew to 2.5 billion rupees from 89 million rupees in the quater.

The bank said in the nine months to September capital gains were 4.6 billion rupees and foreign exchange profits were 6.5 billion rupees helped by forex swaps and gains on US dollar assets.

Fee and commission income was down 5.9 percent to 2.67 billion rupees.

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Income tax was flat at 1.54 billion rupees but the bank said the removal of a debt repayment levy helped.

The bank’s balance sheet grew with deposits, and gross assets grew 18 percent to 1.6 billion rupees. Net assets grew 7.2 percent to 145 billion rupees.

Tier I capital was steady at 12.1 percent by September 2020 at bank level from 12.29 in December and total capital was 15.9 percent down from 16.1 percent. (Colombo/Nov13/2020)

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