Healthy growth in business volumes and an extraordinary contribution from other income, before the slowdown attributed to the pandemic, have enabled the Commercial Bank of Ceylon PLC to make a steady start to 2020, despite the continuing increase in impairment charges quarter-on-quarter.
The Bank has reported a gross income of Rs. 39.444 billion for the three months ending March 31, 2020, a growth of 12.87%. The Bank’s interest expenses, at Rs 19.466 billion, reflected an achievement of a 1.43% reduction during the quarter reviewed,attributable to timely re-pricing of liabilities as well as an improvement in its CASA ratio. This enabled the Bank to generate net interest income of Rs 12.426 billion, an improvement of 4.59%.
The revaluation of the Bank’s foreign currency assets and liabilities, resulted in the Bank posting an exchange profit of Rs 6.514 billion, which helped convert a net loss of Rs. 389.309 million in other operating income in Q1 2019 to net income of Rs. 6.587 billion in the three months under review. At the same time, a loss of Rs. 2.348 billion was recorded from trading due to unrealised losses on forward foreign exchange contracts entered into by the Bank.Increasing NPLs, saw the Bank making a provision of Rs. 6.545 billion.As a result of the higher impairment charges, the Bank’s net operating income declined by a marginal 0.38% to Rs. 12.775 billion.
Continuous focus on containing controllable expenditure enabled the Bank to keep total expenditure for the three months to Rs. 6.536 billion, an increase of mere Rs. 254 million or 4.04% over the corresponding quarter of last year.
Operating profit before taxes at Rs. 6.239 billion reflected a decline of 4.63%, but with taxes on financial services reducing by 42.83% to Rs 1.010 billion for the quarter under review due to the abolition of Nation Building Tax (NBT) from December 2019 and Debt Repayment Levy (DRL) from January 2020, the Bank posted a profit before income tax of Rs. 5.229 billion.Profit after tax grew by 22.62% to Rs 3.707 billion, with the increase in the tax-exempt component of income being higher in the reviewed quarter in comparison with Q1 of 2019.
Total assets of the Bank increased by Rs. 63.919billion or 4.61% to Rs 1.451 trillion. Asset growth over the preceding 12 months was Rs 132.665 billion or 10.06% YoY.Gross loans and advances grew by Rs. 28.744 billion or 3.12% since the end of 2019 to Rs. 949.201 billion.
Total deposits recorded a growth of 4.87% or Rs 51.326 billion over the three months to reach Rs 1.105 trillion as att March 31, 2020. Deposit growth since March 31, 2019 was Rs. 98.557 billion.