Nov 15, 2019 (LBO) – Significant improvements in the third quarter, which positively impacted its year-to-date performance, have enabled the Commercial Bank Group to post creditable results for the nine months ended September 30, 2019.
Comprising of Commercial Bank of Ceylon PLC, its subsidiaries and associates, the Group reported operating profit before taxes on financial services of Rs 22.211 billion for the period, converting a decline of 3.31% at the end of June 2019 to a growth of 2.27% at the end of September 2019.
Operating profit before taxes on financial services for the third quarter alone amounted to Rs 8.262 billion, reflecting healthy growth of 13.33% over the corresponding three months of 2018, and a noteworthy improvement over the 1.53% decline recorded for the first half of the year.
With taxes on financial services for the nine months growing by a hefty 42.88% to Rs 5.476 billion, which included a mammoth Rs 1.840 billion as debt repayment levy (DRL); group profit before income tax (PBT) reduced by 6.41% to Rs 16.745 billion, but reflected a striking improvement over the 12.65% decline reported at the end of June 2019.
Mirroring a similar trend, profit after income tax (PAT) for the nine months of Rs 11.518 billion was down by 4.2%, a significant improvement over the 16.85% decline recorded for the first half of the year, whilePAT for the quarter was up by an impressive 21.21% to Rs 4.846 billion, the Bank said. The Group paid out a total of Rs 10.703 billion in taxes for the nine months reviewed.
Commercial Bank Chairman, Dharma Dheerasinghe said: “Conditions continue to be adverse for banking, and the country’s busy political agenda indicates that the business environment will remain unsettled for a while. It is encouraging however, to note from our third quarter performance that the Bank is adapting better than most of its peers to the challenges.”
Commercial Bank Managing Director S. Renganathan elaborated that the Bank’s improved third quarter performance had been achieved despite slow growth in lending, rising NPLs and impairment provisionsand the continuing rise in interest expenses as a result of the shift from savings to time deposits. “In the context of these challenges, our nine month results can be described as creditable,” he said.
The Commercial Bank Group reported gross income of Rs 112.358 billion for the nine months, an improvement of 11.07%. Interest income grew by 11.49% to Rs 97.353 billion, but interest expenses increased at a higher rate of 13.95% to Rs 60.930 billion, resulting in net interest income growing by 7.62% to Rs 36.424 billion.