Total assets reach Rs 534 b by end Sept:

Bank of Ceylon 3Q post-tax profits up 34 percent

The Bank of Ceylon’s post-tax profit for the period ended 2009 grew by Rs.505 million or 34 percent and increased to Rs.1,996 million over Rs.1,491 million reported for the corresponding period in 2008 in a challenging economic situation. The Bank’s operating profit before taxes reflected an increase of Rs.837 million or 20 percent to Rs.5,020 million compared to Rs. 4,183 million reported for the corresonding period in 2008.

During the quarter, the total assets of the Bank grew steadily and crossed the milestone of Rs.500 billion to reach Rs.534 billion by the end of September and continued to be the largest asset base in the Sri Lankan banking system.

Total deposits of the Bank which stood at Rs.324 billion at the end of September 2008 rose to Rs.399 billion at the end of September 2009 recording a growth of Rs.75 billion or 23 percent.

Net interest income, increased from Rs.9,628 million by the third quarter 2008 to Rs.10,359 million by the third quarter 2009, achieving a growth of Rs.731 million or 8 percent. However, interest margins have narrowed due to downward revision of interest rates. On the other hand, remarkable growth in deposits has made the way to reduction in borrowings significantly by Rs 40 billion, which softened the impact to the net interest margin.

The Bank reduced its lending rates in April, May, June and September across all sectors in response to the Central Bank rate cuts and to pass the benefits to its customers in its bid to stimulate economic activities.

To secure the quality of advances and as a measure of prudence, the Bank increased its loan loss provision by Rs.606 million during the third quarter 2009. Moreover, Gross loans and advances recorded a slight contraction of 1.8 percent to Rs 284 billion during the period under review.

The Statutory Liquidity Ratio (SLR) also improved to 28.39 percent in September 2009 from 21.57 percent in September 2008 mainly due to increase in customer deposits. The Capital Adequacy Ratio (CAR) as at September 30, 2009 stood at 14.97 percent compared to 11.27 percent as at September 30, 2008.

The operating profit before taxes of the Bank of Ceylon Group increased to Rs.5,346 million in the period under review from Rs. 4,620 million reported for the corresponding period of the previous year. The Group’s post-tax profit stood at Rs.2,089 million signifying a growth of Rs.384 million, 23 percent over Rs.1,705 million recorded in the corresponding quarter of 2008. Group Total assets amounted to Rs. 543 billion, reflecting a 10.5 percent growth.

The Bank of Ceylon is the leading Commercial Bank in Sri Lanka. It provides diversified retail, wholesale, international, development/investment banking, services, credit cards, slips, RTGS payments, safe deposit, custodial and pawn broking services through a network of 307 local and three overseas branches (London, Male and Chennai) and the off-shore banking unit. The bank is currently rated AA (lka)/Stable Outlook by Fitch Rating. The Bank recently celebrated 70 years of its services.