Bank of Ceylon posts 5 percent growth | Sunday Observer

Bank of Ceylon posts 5 percent growth

Chairman Ronald C. Perera and CEO and General Manager Senarath Bandara
Chairman Ronald C. Perera and CEO and General Manager Senarath Bandara

* Profit Before Tax - Rs. 31.9 billion

* Assets cross Rs. 2 trillion mark

* PAT contracts 9%

The Bank of Ceylon, having completed nearly 80 years, closed 2018 with a Profit Before Tax (PBT) of Rs. 31.9 billion, a growth of 5%, said CEO/General Manager Senarath Bandara.

The total operating income has grown by 20%, notching the Rs. 89 billion mark. Net interest income contributed 74% of the total operating income and the ‘Year on Year’ (YoY) growth of the net interest income was 12%. The growth in interest income raised through the core business of the Bank has been the major contributor for growth.

The net fee and commission income of the Bank increased by 11%. Net operating income reflected 14% YoY growth mainly due to the increments reported in net other operating income and the net interest income.

Profit After Tax (PAT) contracted by 9% due to the impact of income tax expense which has grown by 38% during the year.

The stringent collection and monitoring framework enabled the Bank to maintain the NPA ratio within an acceptable rate.

The impact of transition from incurred loss based credit loss provisions model to SLFRS 9 expected credit loss provisions model, resulted in the Bank ending up with a Rs. 14.3 billion impairment charge for 2018 by reporting a 48% ‘YoY’ increase. Although, the increment is significant on ‘YoY’, the Bank managed the additional impairment charge due to SLFRS 9 within the acceptable range due to the precautionary principles adopted by the Bank in identifying the potential risk.

The financial strength of the Bank is showcased by recording Rs. 31.9 billion, the highest PBT in the industry even after recognising an impairment charge of Rs.15.0 billion into its accounts. This gives a strong indication of the Banks’ ability to continue its strong financial position even in the midst of financial shocks which impact its profits.

Bank of Ceylon, crossing the Rs. 2 trillion mark in its asset base in 2018, was another landmark achievement for the Bank and for the financial sector of the country. With this, BOC becomes the sole entity in the country to record Rs. 2 trillion in assets. The YoY portfolio growth of the Bank was 24% recording a gross loan portfolio value of Rs. 1.5 trillion as at end 2018. This growth is notable as it was achieved in the midst of subdued economic conditions in the market with contraction recorded in the industry and trade sector.

Loans and advances accounted for nearly 63% of the Bank’s total assets.

Deposits recorded a ‘YoY’ growth of 14% reaching Rs.1.8 trillion as of the end of the year. The CASA ratio stood at 34%. However, the 20% increase in time deposits has resulted in interest expense on deposits to increase YoY by 21%.

The Bank’s domestic liquid asset ratio was at a moderate level of 24.5% as at the end of 2018.

Chairman Ronald C. Perera said he appreciated the continued trust and loyalty that has been placed on the Bank by customers which enables the Bank to drive successfully across strong winds in the macro-economic front of the country and in international markets. 

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