Feb 25, 2014 (LBO) - Profits at Sri Lanka's Commercial Bank of Ceylon rose 25 percent to 3.3 billion rupees in the December 2013 quarter from a year earlier, despite a steep loan loss provisioning, interim accounts showed.
The group reported earnings of 3.92 rupees per share. For the 12-months to December the group reported earnings of 12.43 rupees on total profits of 10.5 billion rupees, which were up 4.8 percent. The stock closed flat at 114.50 rupees Tuesday.
In the December quarter interest income rose 11.3 percent to 16.0 billion rupees, interest expense rose at a slower 8.6 percent to 9.3 billion rupees from a year earlier, and net interest income rose at a faster 15.6 percent to 6.68 billion rupees
The bank said there was a trading loss of 863 million rupees but gains on financial instruments were up to 1.3 billion rupees from only 16.4 billion rupees. There were forex costs on swaps.
The bank made a 1.7 billion rupee provision for specific loan losses but a general provision of 260 million rupees was reversed.
Sri Lanka is recovering from a balance of payments crisis that is that is typical for countries with so-called soft-pegged exchange rates.
Loans given during the credit bubble also goes bad during an economic slowdown that follows a balance of payments crisis.
When the balance of payments crisis develops credit bubbles high and during the crisis, the Central Bank usually buys Treasury bills held by banks printing billions rupees in domestic currency, pushing up import demand. Loan-to-deposit ratios in banks deteriorate.
The process reverses as the Central Bank sells down its Treasuries stock and withdraws liquidity, slowing bank credit and building up foreign reserves and trimming the trade deficit. Loan-to-deposit ratios of banks improve.
The Commercial Bank said it loans rose 12 percent to 418 billion rupees in the year to December, and deposits rose 15.5 percent to 451 billion rupees. Investments held to maturity rose 113 percent to 123 billion rupees.
With investment is Treasuries going up, capital adequacy can also improve in banks.
Gross assets rose 18.5 percent to 607 billion rupees during the year. Net assets rose 16 percent to 61.4 billion rupees.
The group reported earnings of 3.92 rupees per share. For the 12-months to December the group reported earnings of 12.43 rupees on total profits of 10.5 billion rupees, which were up 4.8 percent. The stock closed flat at 114.50 rupees Tuesday.
In the December quarter interest income rose 11.3 percent to 16.0 billion rupees, interest expense rose at a slower 8.6 percent to 9.3 billion rupees from a year earlier, and net interest income rose at a faster 15.6 percent to 6.68 billion rupees
The bank said there was a trading loss of 863 million rupees but gains on financial instruments were up to 1.3 billion rupees from only 16.4 billion rupees. There were forex costs on swaps.
The bank made a 1.7 billion rupee provision for specific loan losses but a general provision of 260 million rupees was reversed.
Sri Lanka is recovering from a balance of payments crisis that is that is typical for countries with so-called soft-pegged exchange rates.
Loans given during the credit bubble also goes bad during an economic slowdown that follows a balance of payments crisis.
When the balance of payments crisis develops credit bubbles high and during the crisis, the Central Bank usually buys Treasury bills held by banks printing billions rupees in domestic currency, pushing up import demand. Loan-to-deposit ratios in banks deteriorate.
The process reverses as the Central Bank sells down its Treasuries stock and withdraws liquidity, slowing bank credit and building up foreign reserves and trimming the trade deficit. Loan-to-deposit ratios of banks improve.
The Commercial Bank said it loans rose 12 percent to 418 billion rupees in the year to December, and deposits rose 15.5 percent to 451 billion rupees. Investments held to maturity rose 113 percent to 123 billion rupees.
With investment is Treasuries going up, capital adequacy can also improve in banks.
Gross assets rose 18.5 percent to 607 billion rupees during the year. Net assets rose 16 percent to 61.4 billion rupees.
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