Commercial Bank 6-month PAT up 25.54%
The Commercial Bank of Ceylon has reported profit before VAT and NBT
of Rs 10.391 billion recording a growth of 18.91% for the six-month
period on Gross Income of Rs. 42.935 billion, which reflected an
improvement of 18.46% over the corresponding six months of last year.
Profit before tax at Rs. 8.895 billion for the half year reviewed was
up 19.51%, while profit after tax grew by 25.54% to Rs. 6.488 billion,
the Bank said in a filing with the Colombo Stock Exchange.
Interest income improved by Rs. 5.673 billion or 17.84% to Rs. 37.461
billion helped by strong growth of the loan book, but the higher cost of
funds, particularly time deposits, resulted in interest expenses rising
by 25.44% to Rs 21.350 billion in the six months under review, the Bank
said. Consequently, net interest income grew by 9.10% to Rs. 16.111
An improvement in the quality of the loan book enabled the Bank to
reduce its total impairment charges by a noteworthy 17.55% to Rs 1.546
billion. The total operating income improved to Rs. 20.982 billion, a
growth of Rs. 2.189 billion or 11.65% while the net operating income
increased by 14.88% to Rs. 19.436 billion.
"The results for the first six months of the year are pleasing,
especially in the context of the changes taking place in the market and
the regulatory environment," Commercial Bank Chairman, Dharma
Dheerasinghe said. "Banks have had to make certain policy adjustments in
the review period to accommodate some of these changes, but Commercial
Bank's strong fundamentals make it resilient to such vagaries."
Commercial Bank Managing Director/CEO, Jegan Durairatnam said the review
period was one of low liquidity in the industry and reducing margins for
the Bank. "The growth achieved despite these factors is attributed to
the operational strength of the institution," he said.
Total assets of the Bank increased by a respectable Rs. 50.569
billion or 5.75% since end December 2015 to stand at Rs. 930.374 billion
as at 30th June 2016.
Growth over the 12 months since end June last year was Rs. 116.533
billion or 14.32%. Loans and receivables from customers totalled Rs.
569.913 billion, following a growth of Rs 43.746 billion or 8.31% over
the preceding six months, at an average of more than Rs. 7 billion per
month. Total deposits grew by an even higher average of Rs. 9.325
billion per month since December 2015 to reach Rs. 680.057 billion at
the end of the second quarter, reflecting growth of 8.97%.
Elaborating on other components of operational performance in the
review period, the Bank said net fees and commission income had improved
by 20% to Rs. 2.969 billion, while other income comprising of exchange
profits, recoveries and investment income improved by Rs. 0.350 billion.
Total expenses rose by 10.59% due to an increase in staff related
costs and a general increase in other costs during the six months under
In other key performance indicators, the Bank disclosed that net
assets per share at the end of the review period stood at Rs. 78.76.
The Bank's capital adequacy ratios at the end of June were 11.91% for
Tier I and 15.43% for Tier I and Tier II, both well above the statutory
minimum requirement of 5% and 10% respectively.