Commercial Bank – steady start to 2015, 1Q profits up 10%
View(s):The Commercial Bank of Ceylon PLC made a steady start to 2015, with profit after tax of Rs 2.509 billion for the three months ended 31st March, an improvement of 10.1 per cent YoY, the bank said this week.
A robust YoY growth in loans and receivables coupled with customary strong deposit growth and lower cost of funds contributed to this growth by generating net interest income of Rs. 7.233 billion, an increase of 10.06 per cent, it said in a public announcement
Profit before VAT and NBT for the three months reviewed was up 7.88 per cent to Rs. 4.204 billion, while profit before tax at Rs. 3.579 billion reflected an improvement of 8.77 per cent, the bank reported.
Commenting on these results, Commercial Bank Chairman Dharma Dheerasinghesaid: “Commercial Bank’s performance in the first quarter is consistent with projections and reflects the inherent strengths of the bank. There are several challenges that are common to most players in the banking sector, and in that context, the bank’s figures are impressive.”
Commercial Bank Managing Director Jegan Durairatnam said that the bank was able to report a commendable growth in profits despite shrinking interest margins witnessed during the period under review.
Total assets of the bank crossed the Rs. 800 billion mark during the review period and stood at Rs. 807.852 billion at the end of Q1.
Total expenses, including personnel costs, depreciation and amortisation and other expenses increased by 7.82 per cent to Rs. 4.148 billion.
In other key performance indicators, the bank improved its gross and net non-performing loans (NPL) ratios to 3.40 per cent and 1.88 per cent, respectively from 4.40 per cent and 2.54 per cent a year previously. Interest margins continued to drop and stood at 3.66 per cent as at 31st March 2015. The bank’s Tier I capital adequacy ratio reduced from 12.93 per cent to 12.14 per cent, while total capital adequacy for the reviewed quarter reduced to 15.03 per cent from 15.97 per cent. These ratios however remain well above statutory requirements.
The bank said it retained its position as the bank with the highest market capitalisation in Sri Lanka and the third largest listed entity overall in the period reviewed.