A strong focus on core banking operations and a resurgence of credit demand have generated solid growth in key performance indicators for the Commercial Bank of Ceylon PLC at the end of the third quarter of 2010.
Sri Lanka’s benchmark private sector bank has reported pre-tax profit of Rs 6.519 billion for the nine months ended September 30, recording an impressive growth of 30.5 per cent over the corresponding nine months of last year.
The Bank’s post tax profit grew 27 per cent to Rs 3.727 billion in the same period.
Financial statements filed with the Colombo Stock Exchange indicate that growth was particularly strong in the third quarter, with the Bank’s profit before tax growing 54.8 per cent to Rs 2.494 billion, and its post-tax profit improving 47.8 per cent to Rs 1.414 billion over the corresponding three months of 2009.
“One of the principal contributors to this performance was the robust growth of the Bank’s loan book in the third quarter as well as over the nine month period,” Commercial Bank’s Chief Financial Officer Nandika Buddhipala said.
He disclosed that Gross Loans and Advances increased by Rs 18.135 billion in the three months, from Rs 186.635 billion at June 30 to Rs 204.770 billion at September 30, a growth of 9.72 per cent. Within these three months alone, non-performing loans reduced by Rs 2.602 billion or 13.65 per cent, Buddhipala said. Gross Loans and Advances for the full nine months reflected a growth of 11.91 per cent over the figure of Rs 182.9 billion at December 31, 2009.
Total deposits grew by 7.6 per cent to Rs 252.617 billion at September 30, 2010, an increase of Rs 17.873 billion over the nine months reviewed. Taken as a Group, the Commercial Bank, its subsidiaries and associates posted pre-tax profit of Rs 6.547 billion at the end of 3Q 2010, recording a growth of 29 per cent.
Profit after tax for the period was up 25 per cent to Rs 3.735 billion. Elaborating on some of the other contributory factors to growth, Buddhipala said Net Interest Income had increased by 32.5 per cent for the nine months to Rs 11.705 billion.
The interest expenses of the Bank recorded a drop of 23.78 per cent responding to the low interest rate regime that prevailed during the period under review compared to the corresponding period of last year.
Interest income on loans and advances also recorded a drop of 16.70 per cent. However, interest income on other interest earning assets which mainly consist of treasury bills and bonds, increased by 29.87 per cent, restricting the drop in total interest income to 5.38 per cent, he explained. As a result, the net interest margin of the Bank improved to 4.57 per cent during the period under review.
source - www.dailynews.lk
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