Commercial Bank discussing with finance companies to merge
The Commercial Bank is awaiting approval by the Myanmar Cabinet to open a representative office there, officials said.
“We will have to run this office for two years before we can start a fully fledged branch in Myanmar,” one official said.
Meanwhile the bank is looking at acquiring finance companies on the back of the regulator calling for consolidation in the Non Bank Financial Institute (NBFI). While acknowledging that they are going ahead with expansion plans to Myanmar, Dinesh Weerakkody, Chairman, Commercial Bank told the Business Times that any finance company with synergies will be actively pursued.
He declined to comment on whether any interested parties have approached them, but the other official said that they are discussing with four finance companies at present. “We are discussing with them during the past month,” he said, adding that they may absorb two or more firms.
The bank reported a profit before tax of Rs. 14.51 billion for the year ended 31st December 2013, on gross income of Rs. 73.16 billion, which was up Rs. 9.764 billion or 15.4 per cent over 2012, a company media release said.
Profit after tax was at Rs. 10.445 billion for the full year, amidst tough market conditions, it added.
Describing 2013 as a period in which a number of factors combined to make it a challenging year for the banking sector, Mr. Weerakkody was quoted as saying, “Commercial Bank turned in a healthy performance for 2013, posting strong results against many key indicators.”
The group post tax profit of Rs. 10.573 billion represents a growth of 4.88 per cent, he added.
Commercial Bank’s Managing Director/CEO Ravi Dias was quoted as saying, “Our efforts to build up a strong balance sheet over a period of time with a sustainable cost to income ratio, strong CASA and other positive indicators enabled us to maintain and improve our presence in a competitive market.”
Interest income for the 12 months grew 18.03 per cent to Rs. 62.187 billion, while interest expenses increased by 23.63 per cent to Rs. 36.879 billion due largely to greater shift to fixed deposits in the deposit mix, the release said. Consequently, net interest income improved by 10.73 per cent to Rs. 25.308 billion.
Other income and net gains and losses on financial investments improved by Rs. 3.653 billion or 89.79 over the previous year. Net fees and commissions grew 18.1 to Rs. 4.249 billion.