ComBank creates history in Q2 as first private sector bank with assets of Rs. 3 t

Chairman Sharhan Muhseen (left) and Managing Director/CEO Sanath Manatunge

• Group deposits surpass Rs. 2.5 t mark
• Loan book grows by Rs. 206 b in six months to Rs. 1.73 t; disbursements average Rs. 34.33 b per month
• Group net interest income up 17.39% to Rs. 68.81 b
• Improves NIM and CASA 
• Total taxes increase by over 60% for six months to Rs. 24.42 b

The Commercial Bank of Ceylon has become the first private sector bank in Sri Lanka to surpass Rs. 3 trillion in assets, a milestone achieved in the second quarter of 2025 on the back of solid growth in key indicators at Group and Bank level in the six months ending 30 June 2025.

Comprising Sri Lanka’s largest private sector bank, its subsidiaries, and an associate, the Group reported in a filing with the Colombo Stock Exchange (CSE) that Group assets totalled Rs. 3.13 trillion, and Commercial Bank’s assets reached Rs. 3.03 trillion at the end of the period reviewed, growing by Rs. 255 billion (8.88%) and Rs. 242 billion (8.66%), respectively, over six months.

Group gross income for the six months grew by 8.53% to Rs. 177.04 billion, while interest income improved by 5.31% to Rs. 146.65 billion. Interest expenses reduced by 3.48% to Rs. 77.84 billion, resulting in net interest income growing by 17.39% to Rs. 68.81 billion.

Total operating income increased by 20.06% to Rs. 92.76 billion, while the Group’s provisions for impairment charges and other losses declined by 40.41% to Rs. 11.33 billion. This reduction was primarily due to the previous year’s figure including an additional provisioning for the Sri Lanka International Sovereign Bonds (SLISBs) held by the bank.

Consequently, net operating income for the six months grew by a robust 39.81% to Rs. 81.43 billion. Curtailing operating expense growth to just 5.62% at Rs. 25.84 billion resulted in operating profit before taxes on financial services improving by 64.57% to Rs. 55.59 billion.

Taxes on financial services increased by 88.30% to Rs. 8.77 billion, resulting in a Group Profit Before Tax (PBT) of Rs. 46.81 billion for the six months, reflecting a growth of 60.77%. Income tax increased by 53.14% to Rs. 15.65 billion, generating a net profit of Rs. 31.17 billion for the Group in the period reviewed, reflecting a bottom-line growth of 64.90%. 

In the meantime, other comprehensive income for the six months under review recorded a net gain of Rs. 205.44 million as opposed to the net loss of Rs. 8.35 billion recorded last year during the same period. This was primarily attributable to a translation gain of Rs. 287.36 million recorded during the six months under review, in contrast to the translation loss of Rs 8.35 billion recorded for the corresponding period of last year in relation to the translation of financial statements of foreign operations into Rupees. As a result, the total comprehensive income of the Group increased to Rs. 31.37 billion for the period under review, from Rs. 10.55 billion reported for the same period last year.

Group pre-tax profit for the second quarter alone was up 95.94% to Rs. 24.26 billion, while net profit for the three months ending 30 June 2025 grew by 100.15% to Rs. 16.19 billion. 

Taken separately, Commercial Bank of Ceylon PLC reported a PBT of Rs. 45.24 billion and Profit After Tax (PAT) of Rs. 30.05 billion for the six months, posting growths of 61.47% and 66.05%, respectively.

Commenting on these results, Commercial Bank Chairman Sharhan Muhseen said: “Our 1H performance has been extremely encouraging. We have clearly built on the momentum of the first quarter to record an even stronger second quarter. The bank has demonstrated both agility and prudent judgement in seizing market opportunities and addressing external conditions, while upholding our unwavering commitment to excellence for all our customers and stakeholders. The bank has emerged stronger than ever, and is strategically positioned for sustained growth.”

Commercial Bank Managing Director/CEO Sanath Manatunge said the results achieved by the Group and the Bank reflect the close attention accorded to core banking indicators, ensuring that all income streams are nurtured and consolidated in tandem with balance sheet growth, with continuing prudential provisioning for potential changes in the external landscape. “We are closely monitoring the possible impacts of shifts in the global trading environment on our clients and stand ready to support them in navigating these challenges,” he added.

The Group continued its strong commitment to lending, ending 1H 2025 with gross loans and advances of Rs. 1.731 trillion, a growth of Rs. 206 billion or 13.50% over six months, disbursing at a monthly average of Rs. 34.33 billion. Loan book growth over the preceding 12 months was Rs. 368 billion, with year-on-year (YoY) growth of 27%, averaging Rs. 30.68 billion per month. 

In terms of asset quality, the bank’s impaired loans (Stage 3) ratio improved further to 2.27% compared to 2.58% at the end of March 2025, 2.76% at end-2024, and 4.87% a year ago, while its impairment (Stage 3) to Stage 3 loans ratio for the reviewed period too improved to 67.49%, as against 65.56% for the first quarter, 64.61% as at 31 December 2024, and 49.18% as at 30 June 2024.

The Group’s deposits achieved a milestone, surpassing Rs. 2.5 trillion in the second quarter, recording a growth of Rs. 200 billion or 8.66% to reach Rs. 2.51 trillion as at 30 June 2025. This represents an average monthly growth of Rs. 33.27 billion, and YoY growth of 14.26%, with a monthly average growth of Rs. 26.06 billion over 12 months. The Current and Savings Account (CASA) ratio of the bank improved to 39.91% as at 30 June 2025, from 38.07% at end 2024, and continues to be one of the best in the industry.

The Bank’s Tier 1 Capital Ratio as at 30 June 2025 was 14.48%, while its Total Capital Ratio stood at 18.06%, both comfortably above the regulatory minimum ratios of 10% and 14%, respectively. A Tier 2 Green Bond issue of Rs. 15 billion concluded in early August is expected to further strengthen the Bank’s Tier 2 capital, taking it closer to 19%, the bank said.

Meanwhile, the bank’s liquidity coverage ratio for the six months reviewed stood at 456.28% for Rupees and 342.53% for all currencies, both well over the statutory minimum ratios of 100%. The bank’s net stable funding ratio stood at 181.18% as at 30 June 2025, well over the minimum statutory minimum requirement of 100%.

In terms of profitability, the bank’s net interest margin increased to 4.63% for the six months compared to 4.27% reported at end-2024 and 4.41% a year ago. The bank’s return on assets (before tax) improved to 3.13% compared to 2.17% a year ago, while return on equity improved to 21.34% from 16.76% as at 30 June 2024.

The bank’s cost-to-income ratio excluding taxes on financial services stood at 27.59%, as against the normalised ratio of 33.85% for 2024, while the figure inclusive of taxes on financial services was 37.28% for the period, in comparison with 41.89% for the preceding year, when the effect of the net loss on restructuring of SLISBs is discounted. 

Commercial Bank has the highest market capitalisation in the Banking sector in the CSE. The bank has the highest capital base among all Sri Lankan banks, is the largest private sector lender, the largest lender to the Small and Medium Enterprise (SME) sector, a leader in digital innovation, and is Sri Lanka’s first 100% carbon-neutral bank. 

Commercial Bank operates a network of strategically located branches and automated machines islandwide, and has the widest international footprint among Sri Lankan banks, with 20 branches in Bangladesh, a fully-fledged Tier I Bank with a majority stake in the Maldives, a Microfinance company in Myanmar, and a representative office within the Dubai International Financial Centre (DIFC). The bank’s fully owned subsidiaries, CBC Finance Ltd., and Commercial Insurance Brokers Ltd., also deliver a range of financial services via their own branch networks.