BOC reports Rs.10.5bn pre-tax profit for first half of 2023

• Total asset base at Rs.4tn 
• Total deposit base at Rs.3.4tn
• Gross loans and advances at Rs.2.1tn

Bank of Ceylon (BOC) has reported Rs.10.5 billion of profit before tax (PBT) for the six-month period ended on June 30, 2023, amidst the unprecedented challenges continued to prevail from previous year.
The interest income of the bank grew by 32 percent to Rs.259.7 billion, primarily due to the increase in AWPLR comparing to the corresponding period of the previous year. 
However, interest expenses grew by 98 percent, as the deposit mix has been repriced at higher rates, resulting high cost of funding and led to a 65 percent decline in net interest income compared to 1H 2022.  

The net fee and commission income amounted to Rs.8.7 billion, with 11 percent growth, mainly backed by the increase in commission income from card-related transactions and travel and remittance-related services. Income from trading and investment activities and other operating income reported negative growth, due to exchange loss reported during 1H 2023, in line with the 15 percent LKR appreciation. 

Operating expenses for the period reported an increase of 12 percent, in the backdrop of cost escalation, due to inflation. Accordingly, the bank has reported the PBT of Rs.10.5 billion, with a 52 percent decline over 1H 2022. At the end of 1H 2023, the bank’s asset base recorded a negative growth of 7 percent, reflecting the impact of LKR appreciation. Amidst the high competition prevailed in the market, the bank’s deposit base stood at Rs.3.4 trillion as of end-June 2023.

Despite the adverse headwinds, the bank has complied with the regulatory capital requirements above the stipulated norms by maintaining the Tier I capital adequacy ratio of 12.83 percent and total capital adequacy ratio of 15.64 percent. Meanwhile, all the liquidity ratios also improved, given the positive market liquidity vibes conquered during the period under review.
BOC General Manager/Chief Executive Officer Russel Fonseka highlighted, “BOC remains committed to deliver on its mandate of fostering the SME sector and ensuring funding of large infrastructure development in the nation despite the challenging operating environment. Further, he stated that showing its continued commitment to being the Bankers to the Nation, the bank has recently introduced a new bank-funded loan scheme to grant credit facilities for micro, small and medium enterprises in the name of ‘SME Energizer’ in order to promote economic sectors and export earnings leading the revival of economy.” 

“Reviewed against a tightened monetary policy on the backdrop of unprecedented economic turmoil in the country, being among the ‘Top 1000 Banks’ in the world is a clear indication of BOC’s strong financial position and the measures undertaken by BOC to remain resilient by overcoming multiple challenges,” commented BOC Chairman President’s Counsel Ronald C. Perera.