Commercial Bank first private bank to cross Rs. 1 trillion in assets in 2016
View(s):In a media release, the bank said Profit before Value Added Tax (VAT) grew by 18.58 per cent to Rs. 23.755 billion. It said, that an increase in the financial VAT rate from 11 per cent to 15 per cent for four of the 12 months reviewed had resulted in the bank’s VAT expense for the full year increasing by 28.17 per cent to Rs. 3.703 billion, from Rs. 2.889 billion paid for 2015.
The 16.96 per cent growth achieved in PBT was bettered by the growth in profit after tax, which improved by 21.92 per cent to Rs. 14.513 billion during the year ending December 31, 2016, the media release added.
The bank paid Rs. 9.385 billion in taxes in respect of the year reviewed, an increase of 15.78 per cent even after discounting the Rs. 2.570 billion paid in 2015 as Super Gains Tax.
Commenting on these results, Commercial Bank Chairman Dharma Dheerasinghe, was quoted as saying: “The bank can take pride in the performance milestones reached in 2016, which reflect its ability to maintain its growth trajectory even in a rapidly changing environment. Doubling key components of our balance sheet in five years is no mean feat, and 2016 contributed significantly to this achievement.”
Managing Director/CEO Jegan Durairatnam observed that “Improvement in asset quality and a stable rating are testimony to balanced growth, while improving Return on Equity (ROE) attest to the direction of growth in our 48th year. The improvement in asset quality was key to improving profitability and reflects strong credit processes and an improved risk culture, particularly in our front lines which are responsible for accepting risk.”
Gross income of the bank improved by Rs. 15.275 billion or 19.62 per cent to Rs. 93.143 billion helped by a strong contribution from core banking activities with increased business volumes, which boosted interest income to Rs. 80.738 billion, a growth of 22.27 per cent, and Fee income increasing by 29.76 per cent to Rs. 8.143 billion principally through the growth of trade financing and card related business in the year reviewed.
Net loans and advances increased at a higher 21.24 per cent to Rs. 616.018 billion due to a reduction in impairment provisions required consequent to rigorous recovery efforts that resulted in a drop in non-performing loans (NPLs) in absolute terms, the bank said.
Deposits grew by 18.50 per cent to Rs. 739.563 billion as at December 31 2016.