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Bank of Ceylon said that earnings will grow around 25 percent after group earnings fell 20 percent last year due mainly to higher taxation. Bank of Ceylon said that earnings will grow around 25 percent after group earnings fell 20 percent last year due mainly to higher taxation. The bank also paid higher a higher 1 billion rupees as dividends last year but said it would have to consider BASEL II Capital Accord requirements before declaring a high dividend this year.

Bank of Ceylon (BoC) depends on retained earnings to maintain its capital requirement unlike private sector banks that regularly approach existing shareholders or tap the debt market as their balance sheets grow.

Largest in terms of assets, Bank of Ceylon says it will negotiate with Treasury about their capital requirement ahead of BASEL II bank regulation implementation in a couple of years.

Banks are likely to need higher levels of capital in line with the risks they assume with individual customers when the financial sector regulator mandates the more demanding capital adequacy rules.

Last year, Bank of Ceylon paid out a billion rupees as dividends to the