ComBankís pre-tax profit tops Rs. 1.7 b in 1Q, 2008
A healthy growth in net interest income in the first quarter of 2008
has enabled the Commercial Bank Group to weather anticipated tougher
market conditions and maintain growth momentum, Sri Lankaís benchmark
private sector bank said.
The Group comprising Commercial Bank of Ceylon Plc, its associates
and subsidiaries has reported a pre tax profit of Rs. 1,794.1 million
for the three months ended March 31, 2008, a growth of 13.7 per cent
over the first quarter of 2007.
Post tax profit for the quarter, at Rs. 1,025.2 million was up by
11.4 per cent.
The Bank said tax on profit on ordinary activities of Rs. 548.6
million published in the first quarter results of last year, has been
re-stated as Rs. 657.9 million in the comparative column of the Income
Statement of 2007.
This was due to reversal of a deferred tax asset recognised on
statutory general provisions made as per the new provisioning
requirements of the Central Bank of Sri Lanka in the first quarter of
2007, which was subsequently reversed in preparing the Annual Report of
the Bank in 2007.
If the restatement of the tax on profit on ordinary activities was
not effected, the profit after tax for the first quarter of 2007 would
have been Rs. 1,029.2 million.
The Groupís growth was achieved amidst certain sector-specific
provisioning for bad and doubtful debts, a 64.0 per cent increase in
general provisioning on performing and overdue loans and advances as
stipulated by provisioning requirements of the Central Bank of Sri Lanka
and a near 40 per cent increase in VAT on Financial Services in the
quarter under review.
Non-interest expenses of the Group recorded an increase of Rs. 265.9
million or 18.37 per cent over the corresponding quarter of 2007.
The increase in VAT on Financial Services alone amounted to Rs. 143.5
million, of which Rs. 84.1 million was consequent to the adoption of a
revised method of computation, Commercial Bankís Chief Financial Officer
Nandika Buddhipala said.
Discounting the effect of the latter, the growth of Group profit
after tax would have been 20.5 per cent, which could be considered
noteworthy in the context of the conditions under which it was achieved,
On the positive side, principal contributors to the Groupís bottom
line in the quarter reviewed included a 23.0 per cent growth in Net
Interest Income from Rs. 2.43 billion in the first quarter of 2007 to Rs.
2.99 billion. Other Income grew by 20.6 per cent to Rs. 774.7 million
mainly due to growth in fee based income of the Bank while Exchange
Income was up 38 per cent to Rs. 526 million mainly due to higher gains
realised from forward foreign exchange deals carried out in 2008.
Total deposits of the Group, which stood at Rs. 183.1 billion as at
December 31, 2007, rose to Rs. 186.1 billion as at March 31, 2008
recording a growth of 1.64 per cent.
The total gross loans and advances of the Group rose to Rs. 185.2
billion as at March 31, 2008 from Rs. 181.1 billion as at December 31,
2007 recording a growth of 2.3 per cent.