ComBank's 1Q PBT up 40% to Rs 4.145 b

Dinesh Weerakkody

Ravi Dias

Growth in interest income on loans and advances, complemented by gains in foreign exchange income continued to underpin financial performance at Commercial Bank of Ceylon PLC, enabling the bank to post strong results for the first quarter of 2012.

The bank has reported profit before tax of Rs 4.145 billion for the three months ended March 31, 2012 an increase of 40 percent over 1Q 2011 while profit after tax for the three months grew 38 percent to Rs 2.843 billion.

Interest income improved by Rs 2.422 billion or 27.43 percent to Rs 11.25 billion, mainly as a result of the interest income on loans and advances growing by a noteworthy 42.44 percent to Rs 9.075 billion.

“These results reflect a continuation of the momentum achieved in 2011, even under challenging market conditions,” Commercial Bank's Managing Director and CEO Ravi Dias said. “Loan growth was steady in the quarter reviewed, and the challenge for the rest of the year would be to maintain the cost of funds,” he said. The total deposits of the bank stood at Rs. 351.040 billion as at March 31,2012 reflecting a growth of 10.23 percent from Rs.318.461 billion as at December 31, 2011.

Gross loans and advances of the bank too increased and stood at Rs. 308.670 billion, reflecting a growth of 7.19 percent. Total assets of the bank reached Rs. 474.952 billion as at March 31,2012, recording a growth of 7.67 per cent compared to Rs. 441.099 billion as at December 31,2011. Elaborating on other key indicators, Commercial Bank's Chief Financial Officer Nandika Buddhipala said, “Net interest income grew by 17 percent to Rs 5.065 billion.

Meanwhile, Non-interest Income (commissions, investment income, foreign exchange and other income) recorded a growth of Rs 1.927 billion or 130 percent to Rs 3.406 billion mainly as a result of translation gains following the depreciation of the Sri Lanka rupee against the US Dollar in the quarter under review.”

Provisions on account of bad and doubtful debts (net of recoveries) too increased by Rs 704.6 million during the period under review compared to the corresponding period in 2011.

Taken as a Group, the Commercial Bank, its subsidiaries and associates posted pre-tax profits of Rs 4.155 billion for the quarter reviewed, recording a growth of 39.76 percent. Profit after tax for the three months was up 37.99 percent to Rs 2.85 billion.