Slight Hiccup

Commercial Bank of Ceylon reported a modest group profit growth after its bond trading unit took a hit following a rise in treasury yields. Commercial Bank of Ceylon reported a modest group profit growth after its bond trading unit took a hit following a rise in treasury yields. For the nine months ended Sept. 30 2004, Group post tax profits rose 11.5 percent to Rs. 1,269.3 mn, while revenues surged 35.5 percent to Rs. 9,058.4 mn.

Sri Lanka's most profitable privately held bank, also provided Rs. 67.0 mn for income tax payable on its bond trading profits, after the government went back on its word, and demanded back taxes on secondary market transactions from April 1, 2003.

Though the Bank made this provision for back taxes as a prudential measure, negotiations will continue with the authorities aimed at further reducing this tax liability, the bank’s Deputy General Manager – Finance & Planning, Ranjith Samaranayake said.

The bank's primary dealer arm posted a Rs. 6.2 mn loss in 2004 as against a Rs. 264.3 mn profit reported during the nine months ending Sept. 2003. A rise in government treasury yields during the first half of t