A heightened emphasis on lending has seen the Commercial Bank Group increase gross loans and advances by Rs 51.404 billion in the third quarter of 2023 at a monthly average of Rs 17.135 billion, growing its loan book by 4.33% over three months to Rs 1.239 trillion and reversing the trend of the first half of the year.
The Group’s deposits crossed the Rs 2 trillion milestone, growing by Rs 79.808 billion or 4.07% to Rs 2.038 trillion as at September 30, 2023, achieving a monthly average increase of Rs 26.603 billion in the third quarter.
The Group, comprising the bank, its subsidiaries and an associate, reported in a filing with the Colombo Stock Exchange (CSE) that total assets increased by Rs 63.343 billion or 2.57% over the three months to reach Rs 2.526 trillion as at September 30, again reversing the trend of the first half of the year. Gross income at Rs 255.963 billion reflected an increase of 52.66% since June 30, 2023, and an improvement of 30.88% over the corresponding nine months of 2022, while interest income at Rs 224.570 billion was up 48.91% over the figure for the first half of the year, and an improvement of 49.46% from a year ago, the Group said.
Interest expenses increased by 44.39% since June 30, 2023 and by 87.19% from a year ago to Rs 163.688 billion for the nine months under review.
Total operating income of the Group declined by 16.74% to Rs 86.450 billion for the nine months of 2023, an improvement over the decline of 27.03% reported at the end of the second quarter of the year. In contrast, total operating income for the third quarter at Rs 35.930 billion was an improvement of 3.83% over the corresponding three months of the previous year. Similarly, net operating income for the nine months improved by 17.65% to Rs 60.668 billion, and by 33.08% to Rs 23.359 billion in the third quarter.
Consequently, the Group reported an operating profit before taxes on financial services of Rs 28.692 billion for the nine months, an improvement of 12.30%. Taxes on financial services increased by 4.39% to Rs 3.665 billion mainly due to the introduction of the Social Security Contribution Levy of 2.5% in October 2022.
Nevertheless, the Group achieved a profit before income tax of Rs 25.031 billion for the nine months, an improvement of 13.59%. An increase in the income tax rate to 30% from 24% for the Group’s Sri Lankan operations, resulted in net profit decreasing by 4.51%to Rs 14.764 billion for the nine months.
For the third quarter of 2023, the Group posted pre and post-tax profits of Rs 10.939 billion and Rs 6.473 billion.
Taken separately, Commercial Bank of Ceylon PLC reported a profit before tax of Rs 22.909 billion for the nine months, an improvement of 10.95% while profit after tax reduced by 7.86% to Rs 13.303 billion.
In terms of asset quality, the Bank’s impaired loans (Stage 3) ratio stood at 6.11% compared to 5.25% at end 2022, while its impairment (Stage 3) to Stage 3 loans ratio stood at 39.85% as at September 30.
