Pension Hit

February, 9 (LBO) – A one-off pension charge hit Commercial Bank of Ceylon’s earnings in the last quarter, dragging down annual profits despite capital gains from equity sales, draft accounts released Friday said. The bank lost 276 million rupees in the December quarter as a 1,738 million rupee charge to a restructured pension scheme took the shine off the bottom line, dragging consolidated annual profits down by 12 percent to 2,058 million rupees.

The transfer to the pension was also not tax-deductible, pushing up income tax.

Income taxes for the year rose to 2,251.4 million rupees from 1,309.9 million rupees (up 71.8 percent).

This unusual increase in corporate tax liability was primarily due to the increase in corporate tax rate from 30 to 35 per cent in 2006 and a sum of 1,669.7 million rupees out of the provision for the restructured pension scheme being disallowed for tax purposes, Commercial Bank’s Senior Deputy General Manager Ranjith Samaranayake said in a statement.

Stripped of unusual items, profits of the group amounted to 2,897.3 million rupees, a growth of 539.2 million rupees or 22.8 per cent, the company said.

The company also earned more revenue out of foreign e

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