May 14, 2020 (LBO) – Operating profit before taxes on financial services of Sri Lanka’s Commercial Bank for the first quarter declined by 4.6%, interim accounts showed.
The bank posted a profit before income tax of Rs 5.229 billion for the three months, an increase of 9.51% as the taxes on financial services has been reduced by 42.
83% due to the abolition of Nation Building Tax and Debt Repayment Levy.
Profit after tax grew by 22.62% to Rs 3.707 billion, with the increase in the tax-exempt component of income being higher in the reviewed quarter in comparison with Q1 of 2019.
A 4.34% depreciation of the Sri Lanka Rupee against the US Dollar in the three months reviewed as against an appreciation of 4.27% recorded in the first quarter of 2019, coupled with a revaluation of the Bank’s foreign currency assets and liabilities, resulted in the Bank posting an exchange profit of Rs 6.514 billion.
Interest income growth remained predictably flat, up just 0.
83% to Rs 31.892 billion, but the Bank’s interest expenses, at Rs 19.
466 billion, reflected an achievement of a 1.43% reduction during the quarter reviewed.
This enabled the Bank to generate net interest income of Rs 12.426 billion, an improvement of 4.59%.
The continuing necessity to make substantially higher provisions for impairment charges in response to the trend common to the industry of increasing NPLs, saw the Bank making a provision of Rs 6.545 billion in respect of the reviewed quarter.
As a result of the higher impairment charges, the Bank’s net operating income declined by a marginal 0.
38% to Rs 12.775 billion.
"Healthy growth in business volumes and an extraordinary contribution from other income, before the slowdown attributed to the COVID-19 pandemic, have enabled the Commercial Bank to make a steady start to 2020, despite the continuing increase in impairment charges quarter-on-quarter," the bank said.
"Sri Lanka’s benchmark private sector bank has reported a gross income of Rs 39.
444 billion for the three months ending 31st March 2020, recording a growth of 12.87%."
Total assets of the Bank increased by Rs 63.919 billion or 4.61% at a monthly average of Rs 21.
3 billion to Rs 1.451 Trillion as at 31st March 2020.
Gross loans and advances grew by Rs 28.744 billion or 3.12% since end 2019 to Rs 949.201 billion at the end of the three months under review.
Total deposits recorded a growth of 4.
87% or Rs 51.326 billion over the three months to reach Rs 1.
105 Trillion as at 31st March 2020, reflecting average monthly growth of over Rs 17 billion.
The Bank’s gross NPL ratio increased to 5.27% from 4.95% at end 2019 and 4.14% at end of first quarter 2019, while its net NPL ratio increased similarly to 3.24% from 3.0% at the start of the quarter. The net NPL ratio at the end of the corresponding quarter of 2019 was 2.47%.