In Profit Before Corporate Tax:

ComBank breaks Rs 10 b barrier

The Commercial Bank of Ceylon PLC has achieved outstanding growth in key performance indicators to post record profit and operational growth in 2011 and end the year once again as the benchmark private bank in the country.

According to income statements released to the Colombo Stock Exchange for the 12 months ending 31st December 2011, Commercial Bank exceeded Rs. 10 billion in Profit Before Corporate Tax reaching a new milestone by growing PBT by 17.9 percent to Rs 10.987 billion in the review period.

Dinesh Weerakkody	Amitha Gooneratne

Profit After Tax grew by a robust 45.7 per cent to reach Rs 8 billion (Rs 8.047 billion) from Rs 5.523 billion for the previous year.

The Bank's Total Income for the year was up 9.54 percent to Rs 45.483 billion, with Interest Income growing by Rs 2.9 billion to Rs 37.639 billion and Non-interest Income (foreign exchange and other income) growing by 16 percent to Rs 6.590 billion. Net Interest Income increased by 9.66 percent to Rs 17.996 billion. Net Income improved by 11.3 percent to Rs 24.586 billion.

The total interest income growth was principally attributable to a healthy 21.59 percent growth in Interest Income from Loans and Advances, which amounted to Rs 28.697 billion for the 12 months. Interest Income from Other Interest Earning Assets such as Treasury Bills and Bonds totaled Rs 8.942 billion reflecting a decline of Rs 2.195 billion or 19.7 percent, due to the reduction in Bills and Bonds volume and the lower interest regime that prevailed in the review period.

Gross Loans and Advances grew by Rs 59.590 billion over the 12 months to Rs 287.96 billion at 31st December 2011, an increase that averaged Rs 5 billion per month. The total Performing Loans and Advances portfolio of the Bank expanded by a noteworthy 27.50 percent to Rs 272.135 billion.

Total deposits of the Bank as at 31st December 2011 stood at Rs 318.461 billion, an increase of Rs 58.682 billion or 22.59 percent over 12 months. The average growth in deposits was also close to Rs 5 billion per month.

On the strength of these results, the Board of Directors of Commercial Bank PLC has proposed a final dividend of Rs 3.50 per share, made up of Rs 1.50 in cash and Rs 2.00 in the form of a scrip dividend, taking total dividend per share for the year to Rs 6.00. The Bank paid an interim dividend of Rs 2.50 earlier in the year. These dividends are on the higher capital after a Rights Issue in August and a 1 for 1 Share Split in September 2011.

Commercial Bank Managing Director Amitha Gooneratne described the Bank's performance as the result of solid all-round contributions from all core areas of banking. "Our focus has always been on optimizing the operational returns whilst maintaining a healthy balance in the deposit mix and prudent lending," Gooneratne said. He said the Bank had as a result, maintained or improved key performance ratios.

Gooneratne also disclosed that the Bank had been able to transfer Rs 1.194 billion to an Investment Fund Account from the tax savings resulting from a reduction in the tax rate from 35 percent to 28 percent, and the reduction in the financial VAT rate from 20 percent to 12 percent.

Total Assets of the Bank grew by Rs 71 billion or 19.2 percent to Rs 441 billion as at 31st December 2011. The Bank opened 26 new delivery channels and installed 100 new ATMs in Sri Lanka during the review period to end the year with 213 service points and a network of 500 ATMs, which is the largest ATM network operated by a bank in the country. The Bank's Bangladesh operations comprise of 17 service points and 14 ATMs.

The Gross NPL Ratio (Net of Interest in Suspense) reduced from 4.22 percent at end 2010 to 3.43 percent at 31st December 2011, while net NPL ratio came down to 2.08 percent from 2.78 percent a year previously.