ComBank makes strong start in 2017 | Sunday Observer

ComBank makes strong start in 2017

21 May, 2017

Commercial Bank of Ceylon PLC has reported solid income and profit growth for the three months ending March 31, 2017 and weathering a further reduction in margins and a substantial increase in taxation, the bank said in a statement.

The Bank reported profit of Rs 6.341 billion before VAT and NBT, reflecting growth of 17.93% over the first quarter of 2016, while VAT and NBT for the three months reviewed increased by 40.33% to Rs 1.119 billion due to an increase in the VAT rate and the higher profits earned.

Consequently, profit before income tax for the quarter grew by lower percentage of 14.03% to Rs 5.222 billion, while profit after tax, at Rs 3.775 billion, increased by 16.73%. Overall, the Bank paid Rs 2.565 billion in taxes for the three months under review, an increase of 19.73% over the corresponding quarter of the previous year, which, coupled with the increased cost of funds this year, resulted in shrinking margins.

Commercial Bank’s gross income for the three months reviewed improved by 27.14% to Rs 26.965 billion, with interest income growing by 31.25% to Rs 23.690 billion.

With interest expenses up by a massive 51.25% to Rs 15.029 billion,net interest income grew only by 6.76% to Rs 8.661 billion. The Bank reported total operating income of Rs 11.531 billion, an increase of 5.03%. Its impairment charge for the three months under review amounted to Rs 241.7 million, as against Rs 995.07 million for the first quarter of 2016.This reduction of 75.71% was made possible by an improvement in the quality of the Bank’s loan book.

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