Wednesday 21 November 2018

Sri Lanka state-run Bank of Ceylon Sept net up 26-pct

ECONOMYNEXT - Profits at Sri Lanka's largest bank, state-owned Bank of Ceylon, grew 26 percent from a year earlier to 5.4 billion rupees in the September quarter despite higher costs, bad loan provisioning and transfers to the government, interim accounts showed.

Earnings for the nine months to end September was 12.9 billion rupees, down 12.3 percent from a year earlier as net interest income grew 8.8 percent to 49.4 billion rupees, unaudited accounts filed with the Colombo Stock Exchange showed.

In the September quarter, net interest income grew 18 percent from a year earlier to 18.4 billion rupees, as interest income increased 11.8 percent to 51.2 billion rupees and interest costs grew a slower 8.4 percent to 32.8 billion rupees.

Net fee and commission income grew 38.4 percent to 2.3 billion rupees and other operating income surged 144 percent to 4 billion rupees.

Provisioning for bad loans increased 31.4 percent to 4.5 billion rupees. Gross non-performing loans were 4.5 percent of total loans at end September, up sharply from 2.85 percent nine months earlier.

Personnel costs rose 23 percent to 5.8 billion rupees and other expenses fell 5 percent to 3.6 billion rupees.

Transfers to the government of Sri Lanka which holds 100 percent of Bank of Ceylon had increased in the quarter.

Value added and nation building taxes paid by the bank rose 48 percent to 10.9 billion rupees while income tax increased 108 percent to 3.4 billion rupees.

The bank paid 4.8 billion rupees as dividends to the government of Sri Lanka, up sharply from 1.3 billion rupees a year earlier.

The bank's loan book expanded 11 percent from nine months earlier to 1.3 trillion rupees at end September while deposits grew a slower 6.5 percent to 1.7 trillion rupees.

However, the bank's interest margin fell to 3.18 percent at end September, down from 3.31 percent nine months earlier.

Total assets of the bank grew 7 percent in the nine-month period to 2.1 trillion rupees, and its net book value increasing 9.6 percent to 133 billion rupees.

Tier I capital adequacy was at 9.89 percent end September, above the regulatory minimum of 8.875 percent, but lower than 10.87 percent the bank reported nine months earlier.

Total Capital adequacy was at 13.77 percent, down from 14.49 percent nine months earlier, but above the minimum regulatory limit of 12.875 percent.

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