Commercial Bank of Ceylon Group has reported total operating income of Rs 55.818 billion for the nine months ending September 30, 2020, achieving a growth of 11.84% mainly by more than doubling other incomefor the period from Rs 5.804 billion to Rs 12.262 billion, even though net interest income, the largest component, only improved by a marginal 1.02% to Rs 36.796 billion.
Capital gains on Treasury investments generated a net gain of Rs 4.658 billion on de-recognition of financial assets, more than a 10-fold increase over the Rs 444.754 million for the corresponding nine months of last year; that mark to market gains on Treasury Bills and Bonds enabled a conversion of a net loss of Rs 294.249 million on trading to a net gain of Rs 749.059 million.
With interest rates coming down, the Group was able to reduce interest expenses by 7.70% to Rs 56.240 billion in a period when interest income declined by 4.44% to Rs 93.035 billion.
Meanwhile, net fees and commissions had reduced by 11.97% for the nine months to Rs 6.760 billion as a result of the disruption caused by the COVID-19 pandemic,especially on trade related activities and the reduction of fees and charges by the Bank.
Commercial Bank Chairman Dharma Dheerasinghe commented; “While the core banking dynamic of lending versus deposits is directly impacted, astute management of investments, trading, services and other revenue generating activities ensures that although profits are affected, the Bank remains financially strong and stable and able to navigate the external adversities.”
Commercial Bank Managing Director S. Renganathan disclosed that the Group’s efforts to manage costs had resulted in total operating expenses for the nine months growing by just 2.52% to Rs 19.633 billion. “We have made additional provisions for tourism sector exposures which were identified as more vulnerable to the effects of the COVID-19 pandemic.”
Meanwhile, taxes on financial services declined by 44.11% to Rs 3.060 billion due to the abolition of the Debt Repayment Levy (DRL) and Nation Building Tax (NBT) from January 2020 and December 2019 respectively.
Taken separately, the Commercial Bank of Ceylon PLC reported a profit before tax of Rs 15.566 billion for the nine months, a decline of4.43% and profit after tax of Rs 10.595 billion, a reduction of 5.60%.
Total assets of the Group grew by Rs 254.143 billion or 18.04% since 31st December 2019 to Rs 1.663 trillion as at 30th September 2020. Asset growth over the preceding 12 months was Rs 292.730 billion or 21.36% YoY.
Gross loans and advances of the Group grew by Rs 18.935 billion or 2.03% since end 2019 to Rs 949.672 billion at the end of the nine months reviewed.This includes loans of approximately Rs 20 billion granted to COVID-19 affected businesses.
