The Commercial Bank of Ceylon Group lent Rs 56.816 billion in the fourth quarter of 2023 to end the year with a loan book of Rs. 1.296 trillion, continuing its trend of strong lending growth in support of economic revival.
Deposits grew by 8.60% YoY to Rs 2.148 trillion.
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 156 billion or 6.24% YoY and by Rs 130 billion or 5.15% in the three months reviewed to reach Rs 2.656 trillion as at December 31, 2023.
Gross income improved by 21.82% YoY and by 33.44% in the final quarter to total Rs 341.566 billion for 2023, and interest income grew by 33.84% to Rs 297.646 billion, the Group stated. With interest expenses increasing at a higher rate of 53.37% over the year to Rs 211.231 billion, net interest income grew by a marginal 2.07% to Rs 86.415 billion.
The Group reported a total operating income of Rs 122.070 billion for the 12 months ending December 31, 2023, a decline of 10.66% over the preceding year, but an improvement over the declines of 16.74% and 27.03% recorded at the end of the third and second quarters.
Net operating income for the 12 months, at Rs 83.175 billion reflected an improvement of 28.53%.
The Group’s impairment charges for the fourth quarter of 2023 amounted to Rs 13.113 billion, a reduction of 33.28% over the corresponding quarter of 2022.
Total operating expenses increased by 22.07% to Rs 44.290 billion for the 12 months and by 19.95% to Rs 12.314 billion for the fourth quarter, with personnel expenses (Rs 22.825 billion), depreciation and amortisation (Rs 4.336 billion) and other expenses (Rs 17.129 billion) rising by 15.35%, 20.49% and 32.83% YoY.
The Group posted an operating profit before taxes on financial services of Rs 38.885 billion for the full year.
Taxes on financial services increased by 26.52% to Rs 4.961 billion.
The Group posted an operating profit of Rs 33.924 billion after taxes on financial services.
The Group’s profit before income tax of Rs 33.927 billion for the 12 months recorded an improvement of 38.45%. With income tax for the 12 months increasing to Rs 12.027 billion, the Group reported a net profit of Rs 21.900 billion, a decline of 10.25% YoY.
Taken separately, Commercial Bank of Ceylon PLC reported a profit before tax of Rs 31.880 billion for the 12 months, while profit after tax for the year reduced by 10.92% to Rs 20.461 billion. The Bank reported its Tier 1 and Total Capital Ratios at 11.442% and 15.151% as at December 31, 2023.
The Bank’s interest margin reduced to 3.32% for the year under review compared to 3.74% reported for 2022. However, the interest margin started improving during the second half of the year. The Bank’s return on assets (before tax) stood at 1.27% and return on equity at 9.78% for the year.
In terms of asset quality, the Bank’s impaired loans (Stage 3) ratio stood at 5.85% compared to 5.25% at end 2022, while its impairment (Stage 3) to Stage 3 loans ratio stood at 43.22% as at December 31, 2023 from 39.60% at end 2022.
In terms of liquidity, the Bank’s consolidated liquid assets ratio (Sri Lankan Operations) stood at 46.06%.
In other performance indicators, interest income as a percentage of gross income increased to 87.14%. Net interest income as a percentage of total operating income increased to 70.79% from 61.96% a year previously; and net fee and commission income as a percentage of total operating income increased to 18.34% from 14.76% while the percentage of other income in total operating income reduced to 10.87% from 23.28% because the previous year’s other income included an exchange profit of Rs 35 billion, in contrast to an exchange loss of Rs 15 billion in 2023.
The Bank’s Cost to Income Ratio before taxes on financial services stood at 36.11% for the 12 months under review, while the cost to income ratio inclusive of taxes on financial services stood at 40.31%.
