ComBank reports solid March quarter performance

Sharhan Muhseen  – Chairman	Sanath Manatunge  - Managing Director

Commercial Bank of Ceylon PLC reported some stellar performance in the March quarter amid certain macro-economic uncertainties towards the latter part of the quarter caused by the war in Iran.

The bank reported earnings of Rs.10.73 a share or Rs.17.72 billion for the three months, up 19.8 percent from the same period last year.

The performance was supported by the growth in interest incomes, fee incomes, trading incomes and more notably the decline in the impairment provisions.

The bank set aside Rs.3.18 billion for possible loan losses in the quarter, down to less than half from the Rs.7.15 billion in the year earlier period.

This is despite Commercial Bank providing adequately for any weakness in the macro-economic conditions which could adversely affect their borrowers’ ability to repay.

“…the group remains proactive in identifying sectors susceptible to local and global economic uncertainties, ensuring that adequate provisions are maintained through prudent management overlays”, the bank said in an earnings release.

Under these circumstances, the bank gave loans worth of Rs.67.01 billion in the three months, which appears to have slowed somewhat.  
But the deposits grew robustly by Rs.164.34 billion.

This helped the bank to surpass the Rs.3.5 trillion asset base at the group level, the first for a Sri Lankan bank. The banking group ended the quarter with a total asset base of Rs.3.61 billion.

The bank’s asset quality improved slightly as the Stage 3 loans ratio fell to 1.34 percent from 1.54 percent at the start of the year.

Commercial Bank reported net interest income of Rs.38.81 billion, up 13.4 percent from a year ago.

This is amid the bank’s net interest margin contracting slightly to 4.50 percent from 4.74 percent in December.

The net fee and commission income rose by 11.50 percent to Rs.7.30 billion. The bank also reported net trading gains of Rs.799.91 million compared to Rs.82.78 million a year ago.

Employee Provident Fund has a 7.30 percent stake being the bank’s fourth largest shareholder.