Resilient ComBank maintains growth impetus in Q2

The Commercial Bank of Ceylon Group reported strong growth in the first half of 2024 despite a slight decline in gross income. The Group’s gross income totalled Rs 163.12 billion, down 2.71% year-over-year, but showed improvement in the second quarter with a minor decrease of 0.73%. Reduced interest income from lower market rates was offset by a 56.53% increase in net interest income due to lower interest expenses.

The Group’s CASA ratio improved to 39.95% and net operating income grew by 56.10% to Rs 58.24 billion. Total operating income increased by 52.92% to Rs 77.26 billion, leading to a 106.62% rise in profit before tax to Rs 29.12 billion. Net profit after tax surged by 127.96% to Rs 18.90 billion.

Commercial Bank of Ceylon PLC alone achieved 116.02% increase in profit before tax and a 140.87% rise in profit after tax. Key performance indicators improved, with an interest margin of 4.41%, a return on assets of 2.17%, and a return on equity of 16.76%. The Bank’s cost-to-income ratio improved to 37.82%, and its impaired loans ratio decreased to 4.87%.

“With macroeconomic variables continuing to exert pressure on core banking operations, we intensified our focus on portfolio management and cost efficiency,” noted Commercial Bank Chairman Sharhan Muhseen. “The success of these initiatives is reflected in the Bank’s improved key performance ratios, including profitability, alongside our sustained balance sheet growth.”

Commercial Bank Managing Director/CEO Sanath Manatunge emphasised the Bank’s continued commitment to lending as a vital responsibility in supporting economic recovery, even as the appreciation of the Rupee impacted the value of the loan book. “We remain steadfast in raising funds to bolster the SME sector, despite the need to increase provisions for impairments and other losses, because our dedication to core banking functions remains unwavering,” he added.