|
|
 |
 |
| Sunday, 7 September 2003 |
 |
|
 |
Business |  |
| News Business Features Editorial
|
Commercial Bank maintains healthy growth The Commercial Bank of Ceylon Ltd., its subsidiaries and associate companies have reported a pre-tax profit of Rs. 936.9 million for the first half of 2003, an increase of Rs. 101.6 million or 12.15 per cent over the corresponding period last year. The bank said this pre-tax profit was arrived at after making a loan loss provision of Rs. 302.2 million, which included a provision of Rs. 155 million made as a prudential measure, covering 20 per cent of facilities granted to a State-owned enterprise, whose facilities have been classified under non-performing advances. "However, the bank is in the process of taking legal action against the borrower with the view to recovering the dues," Commercial Bank's Deputy General Manager (Finance and Planning), Ranjith Samaranayake said. Despite this provision, the Group's post-tax profit before Value Added Tax on profit for the period under review was Rs. 811.457 million, an increase of Rs. 159.670 million or 24.5 per cent. The provision compelling banks to provide for special Value Added Tax (VAT) on the basis of 10 per cent of the Net Profit Before Tax and staff emoluments cost the bank nearly Rs. 113 million for the first half of 2003. The profit for the six months after providing for the corporate tax and VAT amounted to Rs. 698.5 million, recording a growth of Rs. 46.703 million or a percentage growth of 7.17. Pre-tax profit as well as post-tax profit before VAT were well above the prevailing rate of inflation estimated to be eight per cent, thereby indicating healthy growth in real terms. Samaranayake said the growth in profits was attributed to the healthy growth in deposits, which amounted to Rs. 7.9 billion, a percentage growth of 14.56. In addition, the fund base of the bank was further boosted by the infusion of medium-term funds through a debenture and the preference share issue, which raised Rs. 3.2 billion, improving the bank's funding mix, he explained. The excess liquidity from higher growth in deposits than that in advances was gainfully utilised by the bank's Treasury by investing in treasury bills and bonds at fine margins, Samaranayake said. The Commercial Bank Group was able to maintain a healthy growth in the Group's principal source of income, which is net interest income. The Group recorded a growth of Rs. 397.2 million in net interest income, which was a 29 per cent growth over the corresponding period last year. Despite the falling interest rate scenario, the growth in net interest income was facilitated by growth in business volumes, he said. The Group also continued to maintain a healthy growth in commission and other income, which enabled the bank to record a growth of 25 per cent in net total income in comparison to the previous year. This was further facilitated by operating expenses increasing only by 19.47 per cent, as against the growth of 25 per cent in net total income, demonstrating the cost efficiency of the Bank. The cost income ratio of the Group amounted to 50.45 per cent, which was a drop from 52.71 per cent over the corresponding period last year |
|
News | Business | Features
| Editorial | Security Produced by Lake House |
