Bank of Ceylon (BoC) closed its 75th year on a high note by recording the highest ever profit before tax (PBT) in the bank’s history as well as in the Sri Lankan banking industry of Rs.20.3 billion, achieving a growth of 29 percent compared to the previous year.
The post-tax profit stood at Rs.13.6 billion - a 12 percent growth. The group has reported Rs.21.4 billion PBT, recording a 33 percent growth over last year, with the bank dominating the results of the group accounting for 95 percent of earnings and 97 percent of the group’s assets.
Despite the dip in the interest margin due to the low interest rate regime, PBT was boosted by the fee income, trading income and gains from financial investments. The fee income increased by 42 percent to Rs.9.2 billion due mainly to the increase in export and import transactions and guarantees fees.
The net gains from trading in Treasury bills and dealing securities grew by 50 percent to Rs.4.9 billion. The increase in these income bases shows the bank’s ability to find alternative income generating channels at difficult times.
Amidst the challenging operating environment, which prevailed throughout most of the year, the bank’s assets grew by 11 percent to Rs.1.3 trillion. The bank is the first domestic bank to achieve a trillion assets balance sheet and continues as the only bank to have done it so far.
Deposits account for 74 percent of the bank’s liabilities as at end-2014. The total customer deposit base has grown from Rs.842.1 billion in December 2013 to Rs.934 billion as of end-2014 amidst the interest rate margin pressure.
“It is evident that the bank made a strong progress on all fronts to make the highest ever profit by a single entity in Sri Lanka. Currently we are in a transformation process, which is gradually taking us to the position of a provider of fully-fledged digital banking to deliver to our customers, best-in-class banking services with a novel experience,” stated BoC Chairman Ronald C. Perera, President’s Counsel.
Rating agency Moody’s has upgraded BoC’s Base Line Credit Assessment (BCA) to b1 from b2 in November 2014 in line with the improvement in capital base. Fitch Ratings has reaffirmed the international rating of BoC during the year as ‘BB-‘ with stable outlook, which is on par with sovereign.
Affirming the bank on the current rating floor has been mainly backed by the preferential government support received by the bank. Fitch Ratings Lanka Limited has awarded ‘AA+ (lka)’ with stable outlook and another local rating agency ICRA Lanka Limited also has awarded (SL) ‘AAA’.
The dedicated employee base of more than 8,000 people is one of the major assets of the bank and continuous development is in place, focusing on the career progression of all employees. A new transformation process is being implemented to enhance the customer service and BoC will continue its sustainability activities addressing all needy segments in society as ‘Bankers to the Nation’.