Commercial Bank posts robust nine month performance

CORPORATE RESULT: The Commercial Bank Group comprising the country's benchmark private sector bank, its subsidiaries and associate companies has continued its robust financial performance in the first nine months of 2006, and reported noteworthy increases in profits and income.

In results released to the Colombo Stock Exchange on Friday, the Group reported a pre-tax profit of Rs 4.05 billion for the first nine months of 2006 as against Rs. 2.60 billion earned during the corresponding period last year, a growth of Rs. 1.45 billion or 55.57 per cent.

The post-tax profits of the Group rose to Rs. 2.37 billion as at September 30, 2006 from Rs. 1.7 billion in the first nine months of 2005, an increase of Rs. 671.4 million or 39.46 per cent. Based on these results, the Board of Directors of the Bank has declared an interim dividend of 15 per cent which is to be paid in November 2006.

Commercial Bank's Senior Deputy General Manager (Finance and Planning) Ranjith Samaranayake said this significant profit growth was partly due to profit from the sale of part of the investments in the shares of DFCC Bank in the second quarter of 2006 and recognition of mark to market gains, which arose as a result of transferring a further portion of shares to the trading portfolio of the Bank during the third quarter of 2006.

Discounting the profit from these transactions, which amounted to Rs 389.4 million, the normal pre-tax profit of the Group for the period under review amounted to Rs. 3.66 billion as against Rs. 2.60 billion reported for the corresponding period last year. This was a growth of Rs. 1.06 billion or 40.62 per cent.

The improvement in normal profits of the Group was facilitated by an increase of 26.94 per cent or Rs. 1.15 billion in net interest income from Rs. 4.27 billion in the corresponding period in 2005 to Rs. 5.42 billion as at September 30, 2006.

The exchange profit of the Group rose by Rs 589.4 million to Rs. 977.5 million. Other income of the Group, excluding profits relating to DFCC shares, rose by Rs. 247.2 million to Rs. 1.81 billion in the review period. Net income of the Group at Rs. 8.6 billion was an increase of 38.19 per cent over the corresponding period last year.

Total deposits of the Bank recorded a growth of Rs. 19.88 billion or 15.58 per cent to reach Rs. 147.5 billion as at September 30, 2006 from Rs 127.6 billion as at December 31, 2005. Gross advances mirrored this trend increasing to Rs. 140.6 billion as at September 30, 2006 from Rs. 124.4 billion as at the end of 2005, an increase of Rs. 16.2 billion or 12.96 percent.

Total assets of the Group increased to Rs. 210.31 billion as at September 30, 2006 as against Rs. 180.13 billion reported as at December 31, 2005, a growth of Rs. 30.18 billion or 16.75 per cent.

Commercial Bank also had the largest market capitalisation, among all listed banks in Sri Lanka as at September 30, 2006 and was ranked No. 4 among all listed companies on the Colombo Stock Exchange.