Apr 28, 2011 (LBO) - Sri Lanka's Commercial Bank said March 2011 quarter net profit rose 86 percent to 2,064 million rupees from a year ago as it benefited from higher interest margins and lower taxation.
Group interest income grew 5.38 percent 8.8 billion rupees while interest expenses fell 6.21 percent to 4.5 billion rupees, enabling net interest income to rise 21 percent to 4.3 billion rupees.
"Noteworthy volume increases in its performing loan book and in other principal banking activities in a period of relatively lower taxation enabled Commercial Bank to maintain its pace of growth in the first quarter of 2011," a statement said.
According to interim results filed with the stock exchange, the bank's non-interest income rose 18 percent to 1.5 billion rupees in March 2011 from a year ago.
Diluted earnings per share rose 86 percent to 5.44 rupees.
Total performing loans grew almost three percent to 219 billion rupees as at March 31, 2011 from the beginning of the year while total deposits grew almost six percent to 275 billion rupees.
The bank statement said interest income from loans grew by 864.1 million rupees or 15.69 percent to 6.371 billion, contributing to net interest income of the bank growing 20.83 percent to 4.3 billion rupees.
"Post-tax profit growth was boosted further by a reduction in the income tax rate from the 35 percent that prevailed last year to 28 percent, resulting in tax expenses increasing by only 13.78 percent to 899 million rupees for the three months."
Commercial Bank Managing Director Amitha Gooneratne said market conditions were "more conducive" for the banking sector than they were a year ago.
Total deposits of the bank grew at an average of nearly five billion rupees a month in the three months reviewed.
"Despite this significant increase, the comparatively lower interest rate regime that prevailed in the quarter resulted in total interest expenses declining by 6.21 percent, enabling the bank to improve its net interest margin to 4.59 percent from 4.43 percent a year ago," the statement said.
Other income of the bank comprising principally of commission income and income from investments rose 22.53 percent, while foreign exchange income improved by 11.32 percent on a relatively higher volume of transactions.
Net provisions on account of bad and doubtful debts decreased by 251.9 million rupees over the corresponding quarter of the previous year.
This was largely due to the Central Bank mandated reversal of part of the statutory general provision on the performing and overdue loans portfolio of commercial banks.
The provision, computed at 0.9 per cent as at December 31, 2010, was reduced to 0.8 percent at end of the quarter under review and will be further reduced by 0.1 percent each quarter to reach 0.5 percent by the end of 2011.
"These contributions helped the bank to record an increase in total income of 777.4 million rupees or 7.92 percent to 10.591 billion rupees for the three months," the statement said.
An improvement of 95.9 million rupees in recoveries on non-performing loans in the quarter also contributed to the reduction in net provisions on bad debts.
The bank’s annualized Return on Equity increased from 17.87 percent to 24.66 percent.
source - www.lbo.lk
No comments:
Post a Comment