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Mar 06, 2009 (LBO) – Commercial Bank of Ceylon group has reported profits of 4,118.9 million rupees for the year ended December 2008, lower by 0.7 percent, with revenues growing 24.8 percent to 43.9 billion rupees. Group interest income grew 21.9 percent to 37.2 billion rupees, interest expense grew 28.44 percent to 24.3 billion and net interest income grew 11.3 percent to 12.89 billion rupees.

The bank said a charge of 692.1 million rupees was made for petroleum derivatives, and a 405.5 million rupee profit came from the sale of a stake in Commercial Leasing Company.

State-run Ceylon Petroleum Corporation (CPC) stopped payments under oil hedges to Commercial Bank and state-run People’s Bank also stopped paying Commercial Bank on a derivative re-sold to CPC.

People’s Bank had gone to court to stop Commercial Bank setting off a 15 million US dollar deposit and claim 1.5 percent interest on defaulted payments of 21.02 million US dollars.

The exposure on oil hedging deals were valued at 3,397 million rupees by December 2008.

“We posted a strong performance in 2007 despite the unfavorable economic and political climate,” Commercial Bank managing director Amitha Gooneratne said in a statement.

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