Strong start for Commercial Bank in 2017
View(s):Commercial Bank of Ceylon PLC has made a strong start in 2017, reporting solid income and profit growth for the three months ending 31st March 2017 and weathering a further reduction in margins and a substantial increase in taxation.
The bank reported a profit of Rs. 6.3 billion before VAT and NBT, reflecting growth of 17.93 per cent over the first quarter of 2016, while VAT and NBT for the three months reviewed increased by 40.33 per cent to Rs. 1.1 billion due to an increase in the VAT rate and the higher profits earned during the period under review, a bank media release said.
Post-tax profit gained by 16.73 per cent to Rs..3.7 billion for the quarter under review.
The bank paid Rs. 2.5 billion in taxes for the three months under review, an increase of 19.73 per cent over the corresponding quarter of the previous year, which, coupled with the increased cost of funds this year, resulted in shrinking margins.
“We have learned to live with the reality of reduced margins and higher taxes, through our strong focus on operational excellence which continues to boost business volumes,” Commercial Bank Chairman Dharma Dheerasinghe was quoted as saying. “The bank’s momentum in mobilising funds and lending has not slowed, even though the dynamics that apply to these areas are changing.”
Commercial Bank’s gross income for the three months reviewed improved by 27.14 per cent to Rs. 26.9 billion, with interest income growing by 31.25 per cent to Rs. 23.6 billion.
Other income remained flat at Rs 2.8 billion as a result of a drop in exchange income due a significantly lower rate of depreciation of the rupee.