Firm Pegs

Mar 08, 2010 (LBO) – Foreign exchange trading profits in Sri Lankan banks plummeted in the December 2009 quarter as a firmer currency peg with the US dollar reduced volatility emerging data showed. At state-run Bank of Ceylon group, the country’s largest commercial bank by assets, forex profits had fallen 96 percent to just 90 million rupees in the December 2009 quarter from 2.1 billion a year earlier.

State banks also act for the Central Bank to preserve a peg by trading on behalf of the monetary authority.

At Commercial Bank of Ceylon, the country’s largest listed bank, forex income had halved to 456 million rupees in the December quarter.

Hatton National Bank saw its forex earnings fall 36 percent to 200.7 million rupees, Nations Trust Bank was down 50.6 percent to 50.6 million, Sampath Bank was down 68.7 percent to 139.1 million rupees and Seylan Bank was down 66.5 percent to 74.0 million.

Out of published results so far, Pan Asia Banking Corporation, which made a negligible 8.6 million in forex profits in the December quarter of 2008, increased forex earnings to 26.8 million rupees in 2009.