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ComBank interest income grows first nine months

16 Nov 2021

The Commercial Bank of Ceylon Group’s interest income – which is the biggest component of gross income – grew by 3.43% to Rs. 96.227 billion, for the nine months ending 30 September, improving on the 3.20% growth achieved up to June 2021, despite a slowing down in some key contributors in the third quarter of the year. Commercial Bank Chairman Justice K. Sripavan noted that these results demonstrate Commercial Bank’s strong ability to maintain healthy and balanced growth in core banking operations to mitigate the impacts of fluctuations in income from fee-based operations and other operating income. “Each quarter sees the bank maintaining or improving on its key performance ratios to become even more financially stable and better-positioned to continue its mission as a systemically important bank,” he said. The interest expenses continued to decline, albeit at a lower rate than in the first half of the year, the group said. Consequently, interest expenses reduced by 13.42% to Rs. 48.693 billion for the nine months, enabling the group to post net interest income of Rs. 47.533 billion, recording an increase of 29.18%. The group, comprising the Commercial Bank of Ceylon PLC, its subsidiaries and an associate, has reported a gross income of Rs. 120.050 billion for the period, an improvement of 5.66% over the corresponding nine months of 2020, with the third quarter recording a growth of 4.34% in comparison with the 6.34% growth achieved for the first half of 2021. Among the other principal contributors to gross income, fee and commission income grew by 32.21% to Rs. 11.002 billion, net other operating income improved by 13.91% to Rs. 7.808 billion assisted by higher exchange gains, net gains from derecognition of financial assets contributed Rs. 2.976 billion, and net gains from trading amounted to Rs. 2.037 billion, an increase of 171.95%. Net gains from derecognition of financial assets witnessed a decline of 36.10% due to a reduction in profits from the sale of Treasury Bonds and Sovereign Bonds by Rs. 1.417 billion, in comparison with the third quarter of last year, the group said. Consequently, operating profit before value-added tax (VAT) on financial services grew by a significant 52.55% to Rs. 29.674 billion for the nine months, improving on the 41.09% growth recorded at the end of the first six months of the year. Commercial Bank Managing Director S. Renganathan elaborated that Commercial Bank continued to improve its CASA ratio, cost-income ratio, provisioning for impairment, and provision cover in the period reviewed, disclosing that charges for impairment and other losses had in fact declined by a remarkable 41.87% in the third quarter.


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