ComBank Group sees topline growth in 2022, increases provisioning
View(s):The Commercial Bank of Ceylon Group has ended 2022 with a strong operational performance, having navigated the year with a series of forward-looking strategies that included making the highest-ever impairment provision in a year in the history of the institution.
In a period of unprecedented macroeconomic variables, the group comprising Sri Lanka’s biggest private sector bank, its subsidiaries and an associate, saw its assets grow by Rs. 516.063 billion or 26.02 per cent to reach Rs. 2.5 trillion, gross income grow by 71.31 per cent to Rs. 280.387 billion and interest income improve 67.44 per cent to Rs. 222.393 billion, with the sharp depreciation of the Sri Lanka Rupee exerting a distortionary impact on some key indicators.
In a statement, the group reported that the value of its loan book had grown by Rs.151.239 billion or 13.81 per cent over the 12 months ending 31st December 2022, assisted by the impact of the sharp depreciation of the Rupee on foreign currency loans and advances.
The group made a provision of Rs. 71.924 billion for impairment charges and other losses, an increase of Rs. 46.784 billion or 186.10 per cent over the Rs. 25.140 billion provided in respect of 2021.
Commenting on the external factors that impacted the results, Commercial Bank Chairman Prof. Ananda Jayawardane said the domestic macroeconomic pressures emanating from the country’s deteriorating external financing position exerted severe stresses on the foreign currency liquidity and the capital adequacy of banks, making it necessary for managing liquidity to be given priority in the year under review. Although an increase in the cost of funds is inevitable, all possible steps have been taken to re-price and re-balance financial assets, increase fee-based income and to maintain non-interest costs at acceptable levels, he said.
The group’s profit before tax of Rs. 24.505 billion for the year reflected a drop of 25.65 per cent over 2021 while net profit for the year improved by a marginal 0.45 per cent to Rs. 24.399 billion,. Taken separately, Commercial Bank of Ceylon PLC reported a profit before tax of Rs. 22.598 billion for the year, a drop of 29.38 per cent while profit after tax for the year was down only by 2.7 per cent to Rs. 22.970 billion compared with the profit after tax of Rs. 23.606 billion for 2021.
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