The Commercial Bank of Ceylon Group has ended the first quarter of 2024 with a loan book of Rs 1.316 trillion, continuing the Bank’s focus on lending in a period where the appreciation of the Rupee negatively impacted the value of the loan book and resulted in a contraction of the balance sheet.
The Group reported a net increase of Rs 20 billion in its loan book in the first three months of the year and Rs 129 billion in the 12 months ending March 31, 2024, averaging Rs 10.75 billion per month and achieving YoY growth of 10.87% in gross loans and advances.
Comprising the bank, its subsidiaries and an associate, the Group reported in a filing with the Colombo Stock Exchange (CSE) that the value of deposits declined by 0.33% to Rs 2.141 trillion in the first quarter of 2024 largely due to the appreciation of Rupee against the Dollar, but had grown by Rs 117 billion or 5.80% over 12 months. However, the total Rupee deposits of the Group recorded a growth of Rs 41.256 billion or 2.94% during the first quarter of 2024.
Total assets stood at Rs 2.616 trillion as at March 31, 2024, a decrease of 1.48% consequent to a revaluation of the Group’s assets.
The Group posted gross income of Rs 80.208 billion for the quarter under review, down 4.68% over the corresponding period of 2023 primarily due to a decrease in interest income to Rs 70.391 billion, which reflected a YoY decline of 7.31% due to the considerable reduction in market interest rates on loans and government securities.
However, a noteworthy improvement of over 3% in the CASA ratio of the Bank from 37.08% a year ago to 40.51% as at March 31, 2024 coupled with a repricing of deposits in keeping with market movements, saw interest expenses reducing by 25.05% to Rs 42.693 billion. Consequently, net interest income for the three months improved by 45.97% to Rs 27.698 billion.
Total operating income of the Group for the quarter grew by 38.20% to Rs 34.947 billion. The Group made provisions of Rs 3.436 billion for impairment charges and other losses, a reduction of 49.45% from the corresponding quarter’s figure of Rs 6.797 billion in 2023 which included a substantial provision made for foreign currency bonds. As a result, net operating income increased by 70.43% to Rs 31.511 billion.
The Group reported an operating profit before taxes on financial servicesof Rs 19.457 billion for the quarter, achieving a growth of 149.06%.
Income tax for the three months increased by 148.89% to Rs 5.929 billion, resulting in a net profit of Rs 10.808 billion for the quarter.
Taken separately, Commercial Bank of Ceylon PLC reported a profit before tax of Rs 16.195 billion and profit after tax of Rs 10.451 billion for the quarter, posting growths of 155.56% and 155.47%, for the reviewed quarter.
In terms of asset quality, the Bank’s impaired loans (Stage 3) ratio stood at 5.59%, while its impairment (Stage 3) to Stage 3 loans ratio improved to 44.60% as at March 31, 2024. In terms of liquidity, the Bank’s consolidated liquid assets ratio (Sri Lankan Operations) stood at 43.52%.
