Business Times

Commercial Bank profits grow despite tough 2009

Commercial Bank profits grew last year despite tough conditions in 2099, the banking group said.
It said the group - bank and its subsidiaries and associates - reported a post-tax profit of Rs 4.193 billion and pre-tax profit of Rs 7.129 billion for the year. The bank itself reported a post-tax profit of Rs 1,370.8 million for the three months ending 31st December 2009, up 26 % over the corresponding quarter of last year.

The bank’s operations in Bangladesh, now comprising 15 delivery channels and 13 ATMs, achieved a net profit of Rs 624.6 million, contributing 14.51 % to Commercial Bank’s bottom line. Commercial Bank Bangladesh was ranked No 1 for the sixth year under the CAMEL rating system by the Central Bank of Bangladesh in 2009, the group said in a statement to the Colombo Stock Exchange.

Total income for the year reached Rs 43.614 billion. Commenting on the Group’s results, Commercial Bank Managing Director Amitha Gooneratne said: “Our overall performance for the year is testimony to the suppleness of the bank’s processes and the solid foundation we have laid that enables us to respond with alacrity in times of adversity.”

He said the bank, through its Treasury, made significant investments in the sovereign bonds (SLSBs) and the development bonds (SLDBs) issued by the government. “Currently the Bank holds one of the largest private sector portfolios in these instruments. The return from these instruments has also enabled the Bank to bring down its effective tax rate.”

He said the NPL was affected by series of global factors. “Some of our customers were affected by their exposure to the volatile interest rates and others by the drop in global prices. This resulted in a number of our clients not being able to meet their loan payments and the bank was forced to reschedule payments. However, the NPL ratio began to improve in the last quarter of the year as the overall economic climate improved,” Mr Gooneratne said.

The Group was able to limit the increase in total operating expenses to 6.2 % in the year reviewed despite higher personnel costs following the conclusion of a collective Agreement with the Ceylon Bank Employees’ Union, an increase in staff numbers and higher financial VAT on operating income.

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