Commercial Bank deploys record Rs.371bn new loans in 9 months

Chairman Sharhan Muhseen	MD/CEO Sanath Manatunge

Commercial Bank of Ceylon PLC reported some solid performance for the three months to September 2025, with the bank taking the mantle of becoming the first Sri Lankan bank to have a market capitalisation exceeding US $ 1.0 billion.  

The bank gave the most amount of loans – Rs.170.56 billion during the quarter, bringing the nine-month growth in new loans to an unprecedented Rs.370.80 billion, which translated into a 24.9 percent growth.

Against this backdrop, the bank reported a net interest income of Rs.34.67 billion for the July-September quarter, up 14.21 percent from a year ago. The bank’s share ended at Rs.216.75 yesterday when the banking sector was among the leading contributors to the turnover.

What further stood in Commercial Bank’s performance was the fact that the slight expansion in its net interest margin – the difference between what the bank receives from its loans and what it pays for its deposits – to 4.53 percent in September, from 4.27 percent at the start of the year.

This is despite the interest rates coming down in the economy.

The bank set aside Rs.3.04 billion for possible loan defaults, up from Rs.1.00 billion in the year ago period, as a precaution against the soaring loan growth. The stage three loans ratio fell to 1.79 percent by end-September 2025, among the lowest in the industry, from 2.76 percent at the end of last year, reflecting a clear improvement in the asset quality.

Against this backdrop, the bank reported earnings of Rs.10.18 a share or Rs.16.59 billion for the quarter, compared to Rs.9.12 a share or Rs.12.52 billion in the same period last year. This marked a solid 32.59 percent increase. The profits were also helped by the fee incomes, which rose sharply by 25.11 percent to Rs.7.43 billion for the quarter.

Trading gains were also at Rs.2.16 billion for the quarter, compared to a loss of Rs.144.95 million in the same period last year.

Net other operating incomes were also at Rs.3.19 billion, buttressing the bottom-line, up from Rs.1.78 billion a year ago. The operating expenses were up by 12.85 percent to Rs.13.58 billion for the quarter.

Meanwhile, the deposits too grew by 12.0 percent or Rs.269.42 billion, providing the funding support to the growth.

The bank said the low-cost current and savings account deposits improved to 39.92 percent, from 38.07 percent at the end of last year.

The Employees’ Provident Fund had a 7.33 percent stake in Commercial Bank as at end-September, being its fourth largest shareholder, while billionaire investor Dhammika Perera, who had a 2.30 percent stake, sold part of the stake back in early October.