Citibank profits up

Profits of the Sri Lanka unit of Citibank increased to 134 percent during the 9-months to September 2008 to 1,276 million rupees, driven by a steep increase in fee income, while revenues grew 38.9 percent to 2,247 million rupees, its interim accounts showed.

Interest expense grew marginally by 3.2 percent to 744.8 million with outstanding performing loans falling 12 percent to 14.4 billion rupees. But fee income more than doubled to 2,001 million rupees from 908 million rupees with forex income falling 24 percent to 353 million rupees. But other fee income rocketed 271 percent to 1,648 million rupees from 443.7 million rupees.

Fee income includes earnings from hedging contracts and Citibank has provided the largest oil hedge of 400,000 barrels to the state-run Ceylon Petroleum Corporation (CPC). The deals are now under central bank investigation on a court order largely because a knockout was not provided to cover downside risks to CPC.