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| Sunday, 23 November 2003 |
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| News Business Features Editorial
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Commercial Bank Group's profit crosses billion mark The Commercial Bank of Ceylon Ltd., its subsidiaries and associate companies have recorded a pre-tax profit (before the special Value Added Tax on Profit) of Rs. 1.6 billion for the nine months ended September 30, a growth of Rs. 276.5 million or 20.9 per cent over the corresponding period last year. The special Value Added Tax calculated on the basis of 10 per cent of the pre-tax profit and staff emoluments amounted to Rs. 192.2 million or 12 per cent of the pre-tax profit, the bank has reported. After providing for this special Value Added Tax, the profit before corporate tax amounted to Rs. 1.408 billion, a growth of Rs. 84 million or 6.4 per cent. Provision for corporate tax for the period under review resulted in a post-tax profit of Rs. 1.139 billion, a growth of Rs. 36 million or 3.2 per cent. Commercial Bank's Deputy General Manager (Finance and Planning), Ranjith Samaranayake said these results were achieved by the bank despite several constraints including the continuing provision of Rs. 155 million as possible loan losses, representing 20 per cent of facilities granted to a state-owned enterprise, whose facilities were classified into the non-performing category in the second quarter of the year. Further, the decline in the rate of exchange, especially for the US dollar resulted in a drop in exchange profit, which is the bank's second largest source of income, by Rs. 181 million. The bank also provided an additional Rs. 75 million to its pension fund to improve funding levels. This allocation was over and above the normal contributions recommended by the actuary. The corporate tax liability of the bank and the group too rose by Rs. 49 million mainly due to increasing corporate tax rate applicable on off-shore operations from 10 per cent to 15 per cent up to June 30 and to 30 per cent with effect from July 1. In addition, the latest changes in the taxation on interest income from government securities had an increased impact on the bank's tax liability in the third quarter, Samaranayake said. Despite these constraints, Samaranayake said commission and other income recorded a growth of Rs. 135 million to Rs. 844 million, up 19 per cent in the period under review. Total deposits rose from Rs. 54.5 billion as at December 31, 2002 to Rs. 62.1 billion as at September 30, 2003, which represented a growth of Rs. 7.6 billion or 14 per cent. Despite the low credit demand which prevailed in the market, net advances rose from Rs. 51.7 billion as at December 31, 2002 to Rs. 55.6 billion during the period under review, a growth of Rs. 3.9 billion or 7.5 per cent, he said. The growth in the group's total assets from Rs. 81.4 billion at end 2002 to Rs. 95.5 billion as at September 30, 2003 represented a growth of Rs. 14.1 billion or 17.3 per cent. |
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