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| Sunday, 7 March 2004 |
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| News Business Features Editorial
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Commercial Bank boosts its profits Commercial Bank, one of the leading commercial banks in the country, has recorded a consolidated pre-tax profit of Rs 2.03 billion, a 20% increase over 2002, while post-tax profit too has increased by 17.5 % to Rs. 1.5 billion over the previous year. The bank's pre-tax profit was Rs. 1.95 billion up by 28%, and after-tax profit was Rs. 1.47 billion up by 23%. The impressive performances followed after the bank had paid Rs.789 million to the government by way of income tax and special VAT and after providing for staff retirement benefits, non-performing loans and a 14% dip in foreign exchange profit. Releasing its annual results for 2003, the bank described it as "another staggeringly successful year". The bank states that it intends establishing a visible presence in the region over the next seven years after being the number one Sri Lankan bank to become the first Sri Lankan private bank with a regional network in Asia. Asset growth both at bank and group level also crossed the Rs.100 billion mark with group assets up by 38.63% to Rs 112.8 billion and assets of the bank growing a remarkable 50.3% to Rs 110.3 billion. Total group income grew 9.5% to Rs.9.749 billion. Commercial Bank Chairman Mahendra Amarasuriya, said, these results were particularly significant in the context of the many challenges that confronted the banking sector in the year under review. He said that the group's pre-tax profit of Rs 2.039 billion, for example was after provision of a hefty Rs 287 million for special Value Added Tax (VAT) based on net profit before tax and staff costs. This provision alone represented 14.1% of pre-tax profit. Despite these challenges, the group had achieved substantial growth in business volumes which enabled it to weather? narrowing margins,he said. Total deposits had grown by Rs. 20.6 billion to Rs. 75.097 billion, while total advances increased by Rs. 15.7 billion to Rs. 71.238 billion. This business growth resulted in a net interest income growth of Rs. 730 million to Rs. 3.75 billion. The total growth in interest earning assets of the group amounted to Rs. 29.6 billion, consequent to a growth of 41% during the year under review. This growth was due to the funds raised from deposits and from other sources such as equity and debt which boosted the fund base of the bank. A debenture issue raised Rs. 2.2 billion, a preference share issue raised Rs. one billion and a rights issue Rs. 1.9 billion. A contribution of Rs. 6 billion in deposits and Rs. 5 billion in advances from the bank's Bangladesh operations was also a significant factor. He said the bank had recommended payment of a final dividend of 32 per cent. In December 2003, the bank paid an interim dividend of 18 per cent. Commercial Bank Managing Director, Amitha Goonerathna, said the bank believed this was a particulary good time to enter the regional market. "Many South Asian countries have adopted liberal regulatory regimes making access to their markets easier. "We also believe our Sri Lankanness will make us a more acceptable player than some of the other foreign banks", he said. |
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