Commercial Bank in steady start to 2015

The Commercial Bank of Ceylon PLC has made a steady start to 2015, with profit after tax of Rs 2.509 billion for the three months ended March 31, an improvement of 10.1% YoY.

A robust YoY growth in loans and receivables coupled with customary strong deposit growth and lower cost of funds contributed to this growth by generating net interest income of Rs 7.233 billion, an increase of 10.06%, the bank said in a filing with the Colombo Stock Exchange.

Profit before VAT and NBT for the three months reviewed was up 7.88% to Rs 4.204 billion, while profit before tax at Rs 3.579 billion reflected an improvement of 8.77%, the Bank reported.

Total operating income, comprised net interest income, commissions, foreign exchange income, recoveries and other income, increased by 8.84% to Rs 9.682 billion.

Total loans and receivables amounted to Rs 498.552 billion as at March 31, 2015, a growth of 19.13 per cent over 12 months. Total deposits grew by an average of more than Rs 6 billion a month since December 31, 2014 to reach Rs 549.111 billion at the end of the quarter reviewed. Deposit growth over the preceding 12 months was 16.28%.

Commercial Bank Chairman Dharma Dheerasinghe said, "Commercial Bank's performance in the first quarter is consistent with projections and reflects the inherent strengths of the Bank. There are several challenges that are common to most players in the banking sector, and in that context, the Bank's figures are impressive."

Total assets of the Bank crossed the Rs 800 billion mark and stood at Rs 807.852 billion at the end of Q1. In other key performance indicators, Commercial Bank improved its gross and net non-performing loans (NPL) ratios to 3.40% and 1.88% from 4.40% and 2.54% a year previously. Interest margins continued to drop and stood at 3.66% as at March 31, 2015.

The Bank's Tier I capital adequacy ratio reduced from 12.93% to 12.14%, while total capital adequacy for the reviewed quarter reduced to 15.03% from 15.97%. These ratios, however, remain well above statutory needs.