Commercial Bank of Ceylon PLC has posted a profit (before VAT and NBT) of Rs 16.398 billion for the nine months ending 30th September 2016, reflecting growth of 15.19% during a period of rising interest rates and shrinking margins.
In a filing with the Colombo Stock Exchange, the Bank said gross income grew by 17.94% over the corresponding nine months of last year to Rs 66.868 billion at the end of the period reviewed. Profit before tax improved by 13.92% to Rs 13.887 billion while profit after tax at Rs 10.151 billion reflected robust growth of 20.48%, the Bank said.
Continuing strong growth in the Bank’s loan book resulted in total interest income growing by Rs 9.587 billion or 19.72% to Rs 58.191 billion. Interest expenses however increased at a higher rate of 29.49% to Rs 33.936 billion due to re-pricing of liabilities following the rise in interest rates, resulting in net interest income growing by 8.29% to Rs 24.255 billion.
Commercial Bank Chairman Dharma Dheerasinghe said, “We recorded the highest three-month growth in the third quarter of the year, and expect to end 2016 on a characteristically strong note.”
Commercial Bank Managing Director/CEO Jegan Durairatnam said, “We continue to focus on key operational indicators as we grow and expand overseas, ensuring that the Bank adapts well to the changing conditions.”
Total assets of the Bank increased by Rs 73.493 billion or 8.35% since end December 2015 to Rs 953.299 billion as at 30th September 2016, an average assets growth of Rs 8.166 billion per month.
Loans and receivables to customers increased to Rs 574.471 billion, recording a growth of Rs 66.356 billion or 13.06% over the nine months since December 2015, at a healthy average of Rs 7.373 billion per month. The Bank’s loan book has grown by Rs 92.548 billion since end September 2015, reflecting a year-on-year growth of 19.20%.
Total deposits grew by a higher average of Rs 9.6 billion per month over the nine months reviewed to Rs 710.458 billion at the end of the third quarter of 2016, representing growth of 13.84%. Year-on-year growth of Commercial Bank’s deposit base was a striking 20.64% -- Rs 121.540 billion since 30th September 2015 at an average of more than Rs 10 billion a month.
The Bank reduced its total impairment charges by 42.10% to Rs 1.804 billion from Rs 3.115 billion a year ago.
Net operating income increased to Rs 30.198 billion, up 13.04% while total operating expenses grew by 10.58% to Rs 13.8 billion. Net commission income improved by 25.21% to Rs 4.767 billion.
In other key performance indicators, the Bank disclosed that earnings per share for the nine months reviewed improved by 18.61% to Rs 11.41. Net assets per share at the end of the review period stood at Rs 85.11, an increase of Rs 4.89 or 6.10% since 31st December 2015.
The Bank’s capital adequacy ratios at the end of September 2016 were 11.40% for Tier I and 14.80% for Tier I and Tier II, both well above the currently applicable statutory minimum of 5% and 10% respectively well above the minimum of 6.25% and 11.75% proposed under the Basel III guidelines which will come into effect from 1st January 2017.