15.88% CAR - best ratio among all banks:

BoC posts highest pre tax profit of Rs 5.2 b in 2008

Ramani KANGARAARACHCHI

The Bank of Ceylon (BoC) recorded its highest ever pre tax profit of Rs 5.2 billion for 2008, an increase of 16 percent compared to Rs 4.5 billion in 2007, General Manager, Bank of Ceylon B.A.C.Fernando told a media briefing at the BoC auditorium yesterday.

He said that the bank had performed extremely well despite the backdrop of international markets in the financial meltdown maintaining a sustainable growth in terms of revenue, profit and other key indicators.

The aggregate revenue for the year reached Rs 60.2 billion, an increase of 20 percent over the previous year in spite of the volatile market conditions, he said.

Elaborating on the positive figures, he said that the sharp increase was due to the expansion in interest income of Rs 49.7 billion.

The foreign exchange profit recorded a growth of 145 percent to reach Rs 2.9 billion due to exchange transactions. Fees and commissions too increased by Rs 0.9 billion or 35 percent over the previous year. Fernando said that the deposit mobilization was a significant challenge in the year, but the BoC increased its rupee deposits to Rs 219 billion by the end of the year, reflecting a growth of 8 percent compared to the previous year.

The gross loans and advances stood at Rs 218 billion by meeting the financial needs of a wide range of customer segments covering corporate and retail, overseas and offshore banking. Such lending was undertaken in the context of stringent policies to maintain the quality of the loan book. As a result, the ratio of non-performing advances to gross lending portfolio stood at 4.92 percent, the lowest ratio reported by the local Banks, Fernando said.

The bank also recorded the largest assets base - Rs 484 billion, an increase of Rs 46 billion or eleven percent over the last year.

The bank also focused on the SME and Micro sectors expanding specific credit schemes such as SMILE 111 at the industrial sector, Fernando said.

Making a presentation on the key performance indicators (KPIs), the Chief Financial Officer, Saliya Rajakaruna, said that the BoC had maintained a steady return on assets - 1.13 percent whilst the return on equity improved to 16.13 percent. The corresponding return on equity for 2007 was 14.59 percent. The cost to income ratio had improved this year showing a decline from last year’s 68 percent to 63 percent.

The Capital Adequacy Ratio (CAR)of 15.88 percent was the best ratio among all banks in Sri Lanka and the high CAR reflects the strength of the bank and its capacity to survive the ongoing economic difficulties and provide assistance to customers, he said. Meanwhile, BoC Chairman, Gamini Wickramasinghe said that overseas branches had also done well last year and it was after ten years that the London branch made a profit for the first time. There are plans to expand the branches in India and the Maldives and UK as well, he said.