ECONOMYNEXT - Profits at state-run Bank of Ceylon, the country's largest lender by assets grew 35.5 percent from a year earlier to 4.9 billion rupees helped by loss provisions reversals but net interest income fell amid rising rates.
Group interest income rose 14.1 percent to 33.4 billion rupees in the quarter and interest expenses rose at a faster 24.9 percent to 16.4 billion rupees slowing net interest expense grew only 0.2 percent to 12.89 billion rupees.
The bank grew customer loans 5.7 percent to 900 billion rupees from 851 billion rupees, in the six months to June.
It is also one of the biggest holders of government securities. During the six months it cut financial investments - held to maturity, to 235 billion rupees from 246 billion rupees in June.
There was only 15.7 billion rupees in the available for sale portfolio which is marked to market.
However when interest rates rise, the holding cost of the portfolio is reflected in net interest income.
Sri Lanka's interest rates are correcting after being held down by term repo terminations and outright money printing in 2015 as the budget deficit expanded.
The bank reversed 180 million rupees of loan loss provisions, compared to 3.4 billion rupees, provided last year, helping boost profits.
Fee and commission income was also down 13 percent to 1.25 billion rupees.
Group interest income rose 14.1 percent to 33.4 billion rupees in the quarter and interest expenses rose at a faster 24.9 percent to 16.4 billion rupees slowing net interest expense grew only 0.2 percent to 12.89 billion rupees.
The bank grew customer loans 5.7 percent to 900 billion rupees from 851 billion rupees, in the six months to June.
It is also one of the biggest holders of government securities. During the six months it cut financial investments - held to maturity, to 235 billion rupees from 246 billion rupees in June.
There was only 15.7 billion rupees in the available for sale portfolio which is marked to market.
However when interest rates rise, the holding cost of the portfolio is reflected in net interest income.
Sri Lanka's interest rates are correcting after being held down by term repo terminations and outright money printing in 2015 as the budget deficit expanded.
The bank reversed 180 million rupees of loan loss provisions, compared to 3.4 billion rupees, provided last year, helping boost profits.
Fee and commission income was also down 13 percent to 1.25 billion rupees.
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