Commercial Bank beats tough 2013 with Rs. 10.445 b net profit
Wednesday, 26 February 2014 00:28
Turnover up 15.4% to Rs. 73.16 b
Assets cross Rs. 600 b
Deposits up 15.5% to Rs. 451.153 b
Loan book grows 12.30% to Rs. 419.505 b
A characteristically resilient operational performance that gained momentum as the year progressed has enabled the Commercial Bank of Ceylon PLC to end 2013 on a strong note, despite lower demand for credit and thinning margins.
Sri Lanka’s largest private bank has reported profit before tax of Rs. 14.51 billion for the year ended 31 December 2013, on gross income of Rs. 73.16 billion, which was up Rs. 9.764 billion or 15.4% over 2012.
Profit after tax at Rs. 10.445 billion for the full year reflected a noteworthy performance amidst tough market conditions.
Describing 2013 as a period in which a number of factors combined to make it a challenging year for the banking sector, Commercial Bank Chairman Dinesh Weerakkody said: “Against this backdrop, Commercial Bank turned in a healthy performance for 2013, posting strong results against many key indicators.”
“The success of the bank’s performance is also reflected in the Group which comprises of the Commercial Bank, its subsidiaries and associates. The Group post tax profit of Rs. 10.573 billion represents a growth of 4.88%,”he added.
Commercial Bank’s Managing Director/CEO Ravi Dias said: “Our efforts to build up a strong balance sheet over a period of time with a sustainable cost to income ratio, strong CASA and other positive indicators enabled us to maintain and improve our presence in a competitive market.”
Interest income for the 12 months grew 18.03% to Rs. 62.187 billion, while interest expenses increased by 23.63% to Rs. 36.879 billion due largely to a greater shift to fixed deposits in the deposit mix, the bank said. Consequently, net interest income improved by 10.73% to Rs. 25.308 billion.
Other income and net gains and losses on financial investments improved by Rs. 3.653 billion or 89.79% over the previous year. Net fees and commissions grew 18.1 % to Rs. 4.249 billion.
Exchange profits, one of the larger contributors to the bank’s profits in 2012, declined by 57.41% to Rs. 1.996 billion from Rs. 4.687 billion, despite higher transaction volumes. This was mainly due to premiums paid on SWAPs entered by the bank during the year. However, the corresponding gains on funds converted to Sri Lanka Rupees are recorded under interest income and mark to market gains.
The bank’s total operating income grew by 7.99% to Rs. 35.654 billion. Impairment charges for the year at Rs. 4.627 billion reflected an increase of 44.75% due to additional impairment provisions made in response to an industry-wide rise in non-performing loans.
Total expenses including personnel costs rose to Rs. 14.546 billion, the increase restricted to 7.46%.
The bank’s deposit base grew by 15.5% to Rs. 451.153 billion as at 31 December 2013, an increase of Rs. 60.541 billion over 12 months at an average of more than Rs. 5 billion a month. The loan book (total loans and receivables to other customers and banks) increased from Rs. 373.543 billion a year earlier, to Rs. 419.505 billion, a growth of Rs. 45.962 billion or 12.3%.
Commercial Bank’s total assets expanded by Rs. 94.864 billion or 18.54% to cross Rs. 600 billion, and stood at Rs. 606.607 billion at the end of 2013.
The bank also bettered several other key performance indicator ratios, including its cost/income ratio which improved to 46.32% from 47.02% in 2012; its capital adequacy ratios with Tier I at 13.27% (2012 – 12.64%) and Tier II at 16.91% (2012 – 13.85%), and provision cover, which improved marginally to 45.41% mainly due to additional provisions made.
Basic and diluted earnings per share for the review period stood at Rs. 12.31 (2012 – Rs. 12.13) and Rs. 12.29 (2012 – Rs. 12.11) respectively. The bank’s net asset value per share improved by 13.79% to Rs. 71.78 from Rs. 63.08 (2012).
The bank opened eight new branches and installed 30 new ATMs in Sri Lanka during the review period to end the year with 235 branches and a network of 585 ATMs, which is the largest ATM network owned by a single bank in Sri Lanka. The bank’s Bangladesh operations comprised of 18 service points and 19 ATMs in the year under review.
The only Sri Lankan Bank to be ranked among the world’s top 1,000 Banks for three successive years, the Commercial Bank of Ceylon has been adjudged ‘Best Bank in Sri Lanka’ for 15 consecutive years by ‘Global Finance’ Magazine and has won multiple awards as the country’s best bank from ‘The Banker’, ‘Finance Asia’, ‘Euromoney’ and ‘Trade Finance’ magazines.