Banking and insurance sector earnings continue to grow in September 2018 quarter | Daily News

Banking and insurance sector earnings continue to grow in September 2018 quarter

Banking sector earnings posted a +14% YoY growth to Rs. 17.7 billion while continuing to be the largest contributor to overall earnings according to a review was prepared and issued by First Capital Holdings PLC based on information in the public domain, internally developed and other sources.

Commercial, HNB and Sampath Bank being the largest banks in terms of the asset base contributed 72% to total banking sector earnings. Improved earnings during the quarter was resultant to higher interest rates prevailed in the market thereby improving margins and spreads which negated the effect of increase in impairment provisioning under IFRS 9.

Meanwhile a two-fold growth was also witnessed in the insurance sector earnings. This was owing to phenomenal growth in earnings of Union Assurance (Rs 1.6 billion) and Asian Alliance Insurance PLC (Rs. 2.3 billion) resultant to the reversal in deferred tax assets in life insurance business.

However September quarter food and beverage sector earnings dipped by 10% YoY to Rs. 54.3 billion primarily owing to sluggish performance in Food, Beverage and Tobacco (-31%YoY), Telecommunication (-36%YoY) and Materials (-68%YoY) sectors which outweighed the positive momentum experienced by Banks (+14%YoY) and Insurance (+217%YoY) sectors. 


 

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