BOC delivers positive results in 3Q

•  Profit before tax of Rs.22.6bn
•  Total asset base of Rs.4.3tn
•  Total deposit base of Rs.3.7tn
•  Gross loans and advances of Rs.2.4tn

Bank of Ceylon (BOC) has concluded the third quarter of 2023 on a positive note, demonstrating resilience in a challenging economic environment. 
The bank’s profit before tax stood at Rs.22.6 billion, supported by a 20 percent increase in interest income. However, the interest expenses outpaced growth, leading to a 53 percent decline in net interest income compared to 3Q 2022. This reflects the bank’s prudent approach of not transferring the full impact of the interest rate hikes to its customers, prioritising their business revival efforts.

The net fee and commission income grew by 10 percent, mainly due to the increased card-related transactions and retail banking services. However, the income from trading and other operating income were impacted by the exchange losses associated with the rupee appreciation.

The bank proactively managed credit risk by applying management overlays to identify the risk-elevated industries and reassessing the exposures to high-risk borrowers. This resulted in a net reversal of impairment provisions during the period, due to the business revival activities, stringent credit monitoring and currency appreciation. BOC Chairman President Counsel Ronald C. Perera emphasised that BOC has successfully brought many non-performing loans under control and supported the affected business ventures through its Revival and Rehabilitation Unit.

The operating expenses increased by 13 percent, primarily due to the inflationary pressures. Despite these challenges, the bank maintained a healthy capital position, with the Tier I and total capital adequacy ratios exceeding the regulatory requirements. Despite the rupee appreciation and low interest regime, the bank’s deposit base grew by 11 percent to Rs.3.7 trillion, demonstrating strong customer confidence.

The bank’s asset base reached Rs.4.3 trillion, with loans and advances amounting to Rs.2.3 trillion and investments of Rs.1.8 trillion. The bank remains committed to supporting the small and medium enterprise (SME) sector and financing large infrastructure projects, underscoring its role as a national champion. The recent launch of the SME Energizer loan scheme exemplifies this commitment, providing credit facilities to micro, small and medium enterprises to stimulate economic growth and export earnings. General Manager/CEO Russel Fonseka reaffirmed BOC’s commitment to fostering the SME sector and financing large infrastructure projects, despite the challenging operating environment.