ComBank posts Rs 3.23 b PBT in 1Q
The Commercial Bank of Ceylon PLC has posted profit before tax of Rs
3.23 billion on gross income of Rs 16.77 billion for the three months
ended March 31, 2013, despite the challenges of reduced foreign exchange
income and narrowing margins during the period. Releasing its first
quarterly statement based on new Sri Lanka Accounting Standards (SLFRS)
which are based on International Financial Reporting Standards (IFRS)
for interim accounts, the bank said foreign exchange income had declined
by Rs 1.47 billion or 65% over the corresponding quarter of the previous
year, due to the appreciation of the Sri Lanka Rupee against the US
Dollar during the period as against a depreciation during the
corresponding quarter of the previous year. Interest income improved by
24% to Rs 14.487 billion in the period under review, but interest
expenses increased at a higher rate of 44% to Rs 8.874 billion, exerting
pressure on interest margins, the bank said.
Consequently, the interest margin for the quarter declined to 4.34%
from the 4.85% reported for 2012. As a result of these factors, the
Bank's profit after tax of Rs 2.241 billion for the three months was
lower by Rs 563 million over the first quarter of 2012.
Total deposits of the Bank grew by Rs 13.570 billion over the three
months since December 2012, surpassing Rs 400 billion to Rs 408.945
billion at March 31, 2013, recording a growth of approximately 4%, while
its interest earning assets too increased by the same percentage,
growing by Rs 15.907 billion to Rs 389.451 billion at the end of the
quarter reviewed. Total assets of the Bank increased by 4.91% to Rs
536.9 billion from Rs 511.7 billion at the end of 2012.
The Bank's Tier I Capital Adequacy Ratio improved to 12.72% as at
March 31, 2013 from 12.64% at December 31, 2012, while total capital
adequacy (Tier I and Tier II) increased to 16.62% from 13.85%, largely
due to a sum of $ 75 million raised by the Bank from the International
Finance Corporation (IFC) as a ten-year Subordinated Term Debt that
qualifies for Tier II Capital. Commercial Bank, Chief Financial Officer
Nandika Buddhipala said the Bank had made a reversal of Rs 100.654
million in its individual impairment provisions in the quarter reviewed.
This was mainly due to efforts of the Bank to recover part of such loans
and due to the reduction in the number of loans considered for
individual impairment during the first quarter of 2013. Collective
impairment provisions had also reduced from Rs 1.258 billion in the
first quarter of last year to Rs 610 million in the reviewed three
months, largely due to a change in the mix of the loans subjected to
collective impairment that was favourable to the bank.
Consequent to this, the total impairment charges for the period was
only Rs. 516.925 million which reflected a drop of Rs 514 million, or an
improvement of 49.86% compared to the first quarter 2012.