Strong Q3 steadies ComBank Group against external impacts
View(s):Significant improvements in the third quarter, which positively impacted its year-to-date performance, have enabled the Commercial Bank Group to post creditable results for the nine months ended September 30, 2019.
Commenting on the latest results, Commercial Bank Chairman Dharma Dheerasinghe said: “Conditions continue to be adverse for banking, and the country’s busy political agenda indicates that the business environment will remain unsettled for a while. It is encouraging however, to note from our third quarter performance that the bank is adapting better than most of its peers to the challenges.”
Comprising Commercial Bank of Ceylon PLC, its subsidiaries and associates, the group, in a media release, reported operating profit before taxes on financial services of Rs. 22.211 billion for the period, transforming a 3.31 per cent at the end of June 2019 drop in growth, to a growth of 2.27 per cent at the end of September 2019.
Operating profit before taxes on financial services for the third quarter alone amounted to Rs. 8.262 billion, reflecting healthy growth of 13.33 per cent over the corresponding three months of 2018, and a noteworthy improvement over the 1.53 per cent decline recorded for the first half of the year.
“With taxes on financial services for the nine months growing by a hefty 42.88 per cent to Rs. 5.476 billion, which included a mammoth Rs. 1.840 billion as debt repayment levy (DRL); group profit before income tax (PBT) reduced by 6.41 per cent to Rs. 16.745 billion, but reflected a striking improvement over the 12.65 per cent decline reported at the end of June 2019. PBT for the quarter increased by 5.83 per cent to Rs. 6.395 billion,” the banking group said.
Mirroring a similar trend, profit after income tax (PAT) for the nine months of Rs. 11.518 billion was down by 4.2 per cent, a significant improvement over the 16.85 per cent decline recorded for the first half of the year, while PAT for the quarter was up by an impressive 21.21 per cent to Rs. 4.846 billion.
The group paid out a total of Rs. 10.703 billion in taxes for the nine months reviewed.
Commercial Bank Managing Director S. Renganathan noted that the bank’s improved third quarter performance had been achieved despite slow growth in lending, rising NPLs and impairment provisions and the continuing rise in interest expenses as a result of the shift from savings to time deposits. “In the context of these challenges, our 9-month results can be described as creditable,” he said.
The group reported gross income of Rs. 112.358 billion for the nine months, an improvement of 11.07 per cent.