Commercial Bank accelerates into 2018 with ‘impressive’ growth


Commercial Bank of Ceylon PLC has reported profit before VAT and NBT of Rs 7.677 billion and profit before tax of Rs 6.337 billion for the first quarter of 2018, with growth of 21.07% and 21.36% respectively signalling an exceptionally strong start to the financial year 2018.

Gross income for the three months ending 31st March 2018 was up 19.03% to Rs 32.096 billion, with interest income improving by a robust 20.59% to Rs 28.567 billion, the country’s benchmark private bank said in a filing with the Colombo Stock Exchange (CSE).

The Bank attributed the increase in interest income to vigorous growth in interest-earning assets in the quarter under review and higher yields on such assets.

The Bank had been successful in containing growth in interest expenses to 13.12% despite a shift in its deposit mix towards high cost deposits, thereby achieving net interest income of Rs 11.568 billion, an improvement of Rs 2.907 billion or 33.55% over the corresponding quarter of 2017.

Profit after tax for the three months grew by 16.04% to Rs 4.381 billion, an increase of Rs 606 million.

Commercial Bank Chairman Dharma Dheerasinghe said the Bank’s performance in the period reviewed was impressive, but cautioned that prevailing conditions in the market had resulted in an increase in non-performing loans (NPLs), necessitating impairment charges of Rs 1.464 billion for both individual and collective impairments. "Our gross and net NPL ratios are still well below industry averages, but we are taking every effort possible to manage this aspect," Dheerasinghe said.

The Bank’s Managing Director/CEO Jegan Durairatnam said balance sheet growth, one of the fundamental strengths of Commercial Bank, had accelerated in the three months reviewed reflecting the continued trust and confidence reposed in the Bank as well as its substantial involvement in the economy of the country.

Total assets of the Bank grew by Rs 74.702 billion or 6.53% over the three months to Rs 1.218 trillion as at 31st March 2018. Asset growth since the end of the first quarter of 2017 totalled Rs 169.261 billion or 16.14% YoY.

Net loans and receivables increased by Rs 42.169 billion or 5.72% since 31st December 2017 to stand at Rs 779.615 billion at the end of first quarter, recording an average increase of more than Rs 14 billion per month. The increase over the preceding 12 months was Rs 137.444 billion, reflecting YoY growth of 21.40%.

The Bank’s deposits portfolio surpassed Rs 900 billion in the quarter reviewed, growing by 6.53% or Rs 55.506 billion to Rs 905.634 billion as at 31st March 2018, reflecting average monthly growth of more than Rs 18.5 billion. Deposit growth over the preceding 12 months totalled Rs 124.821 billion, recording YoY growth of 16% at a monthly average of over Rs 10 billion.

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