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| Sunday, 11 August 2002 |
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Steady growth in 2002 1st half The Commercial Bank Group, representing the bank and its subsidiaries and associate companies, has declared a post-tax profit of Rs. 651.8 million, an increase of Rs. 91.3 million or 16.3 per cent, for the first half of 2002. The Group recorded a pre-tax profit of Rs. 835.375 million for the period, representing an increase of Rs. 57 million, a growth of 7.33 per cent over the corresponding period last year. The Bank said this profit growth was achieved despite a considerable drop (22.88 per cent) in exchange profits due largely to the slower depreciation of the rupee against the US dollar in comparison with the steep depreciation experienced in the corresponding period last year, following the free-floating of the currency in January 2001. Commercial Bank's Deputy General Manager (Finance and Planning) Ranjith Samaranayake said the Bank has been able to improve profit levels due to many factors. It was able to maintain its growth momentum in business volumes with the growth of 20.42 per cent in deposits and 18.46 per cent in net advances over the corresponding period last year. The higher growth in deposits over advances generated excess liquidity, which was gainfully invested by the Bank in government securities and the inter-bank money market, he said. Successful management of interest margins in a decreasing interest scenario resulted in a net interest income of Rs. 1,269 million (Rs. 1.269 Billion), a growth of 8.49 per cent. This was another factor for the Bank's improved profits. The ability to maintain a healthy growth of 33.23 per cent in fee-based income was largely due to the expanding of market share by offering competitive terms and value added service to customers, Mr. Samaranayake explained. The Bank reported a post-tax profit of Rs. 586,194 million, up Rs. 69 million a 13.35 per cent growth and a gross income of Rs. 3,860 million (Rs. 3.86 billion) for the period under review. The Bank continued to maintain its cost efficiency as reflected by the cost income ratio of 56.24 per cent, which is believed to be the lowest among banks, he said. He said that the Bank would like to view the second half of the year with cautious optimism due to several reasons. It anticipates that interest rates in the country would decline further, thereby exerting downward pressure on the already narrow interest margins. This slower depreciation of the Sri Lankan rupee against the US dollar would also adversely affect the exchange profits. |
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