Lending-focused ComBank posts robust Q3 balance sheet growth

A heightened emphasis on lending has seen the Commercial Bank Group increase gross loans and advances by Rs 51.404 billion in the third quarter of 2023 at a monthly average of Rs 17.135 billion, growing its loan book by 4.33% over three months to Rs 1.239 trillion and reversing the trend of the first half of the year.

The Group’s deposits crossed the Rs 2 trillion milestone in the same period, growing by Rs 79.808 billion or 4.07% to Rs 2.038 trillion as at 30th September 2023, achieving a monthly average increase of Rs 26.603 billion in the third quarter.

The Group, comprising of Sri Lanka’s biggest private sector bank, its subsidiaries and an associate, reported in a filing with the Colombo Stock Exchange (CSE) that total assets increased by Rs 63.343 billion or 2.57% over the three months to reach Rs 2.526 trillion as at 30th September, once again reversing the trend of the first half of the year.

Gross income at Rs 255.963 billion reflected an increase of 52.66% since 30th June 2023, and an improvement of 30.88% over the corresponding nine months of 2022, while interest income at Rs 224.570 billion was up 48.91% over the figure for the first half of the year, and an improvement of 49.46% from a year ago, the Group said.

Interest expenses increased by 44.39% since 30th June 2023 and by 87.19% from a year ago to Rs 163.688 billion for the nine months under review. As a result, net interest income, at Rs 60.882 billion, was marginally down by 3.08% over the corresponding period of 2022, while the third quarter’s net interest income of Rs 23.432 billion reflected an improvement of 6.02% over that of the corresponding quarter of 2022.

Commenting on these results, Commercial Bank Chairman Prof. Ananda Jayawardane said: “Our performance reflects the continuing impacts of external factors that influence multiple aspects of income generation, investments, risk management, lending, deposit mobilization and asset-liability matching. In this scenario, banks need to retain their focus on their fundamental role of financial intermediation, and our results for the third quarter in particular, reflect this focus.”

Commercial Bank Managing Director/CEO Sanath Manatunge added: “We are encouraged by the growth in our loan book despite the effect of the appreciation of the Rupee on the value of the portfolio. Extra attention is being given to expand our balance sheet with emphasis on credit growth, which also supports efforts to revive the national economy. Our liquid assets ratio is well above the statutory minimum requirement, enabling the Bank to continue to be the biggest lender to the SME segment in particular, which is the major contributor to the economy.”