Sri Lanka’s Commercial Bank Sept net up 25-pct on forex gains, better margins

ECONOMYNEXT – Profits at listed Commercial Bank of Ceylon Plc grew 24.5 percent from a year earlier to 5.1 billion rupees in the September 2018 quarter on improving interest margins and huge foreign exchange gains despite increasing bad loans provisioning, interim accounts showed.

Earnings were 5.11 rupees a share in the quarter. In the nine months to end September, earnings were 13.63 rupees a share on a profit of 13.7 billion rupees, up 16.22 percent from a year earlier, accounts filed with the Colombo Stock Exchange showed.

The banking stock was trading at 115 rupees on Wednesday, unchanged from the previous day.

In the quarter, net interest income grew 16.45 percent from a year earlier to 12.3 billion rupees with interest income increasing 14.6 percent to 30.9 billion rupees and interest costs growing a slower 13.4 percent to 18.6 billion rupees.

Fee and commission income grew 16.06 percent to 2.6 billion rupees.

Trading losses contracted 76 percent from a year earlier to 218.7 million rupees in the quarter.
Other income, mostly foreign exchange gains, surged 360 percent to 3.5 billion rupees.

Bad loans provisioning ballooned 417 percent to 3.4 billion rupees.

Personnel costs rose 18.6 percent to 3.4 billion rupees and other expenses grew 29 percent to 2.3 billion rupees.

Commercial Bank’s loan book expanded 13 percent from nine months earlier to 840 billion at end September 2019, and customer deposits grew 11 percent to 952.3 billion rupees.

Non-performing loans increased to 2.83 percent of the loan book at end September up from 1.88 percent nine months earlier.





Tier I capital adequacy ratio stood at 11.39 percent at end September, down from 12.11 percent nine months earlier but above the Basel III regulatory minimum of 8.875 percent.

Total capital adequacy ratio was at 15.82 percent, up from 15.75 percent nine months earlier, and above the 12.875 percent regulatory minimum.

Interest margin had improved to 4 percent at end September, up from 3.62 percent at the beginning of the year.

Return on equity edged lower to 16.22 percent, down from 17.88 percent nine months earlier. (COLOMBO, 14 November 2018)

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