The Commercial Bank Group has reported gross income of Rs 35.501 billion for the three months ended March 2019, an improvement of 12.86% over the first quarter of 2018.
The Group posted profit before income tax of Rs 5.019 billion and profit after income tax of Rs 3.191 billion in the first quarter of 2019 in a performance that reflects the impact of external factors.
The Group was also required to pay substantially higher income taxes in respect of the three months under the new tax regime introduced by the Government in 2018, which took away most of the tax concessions previously enjoyed by the banking industry.
Commercial Bank Chairman Dharma Dheerasinghe said that he was happy to note that the confidence of valued customers has enabled the Bank to reach the milestone Rs 1 Trillion mark in deposits for the first time as anticipated. “However, the rate of taxation on banks continues to be a matter of concern, particularly in the context of the challenging external conditions affecting the industry” he said.
The Bank’s Managing Director/CEO S. Renganathan said that the Bank had followed a more cautious approach in expanding its advances portfolio during these challenging economic conditions.
However, net other operating income which includes exchange profit and investment income reflected a net loss of Rs 298.811 million due to translation losses on foreign exchange as a result of an appreciation of the Sri Lanka Rupee against the US dollar in the quarter under review as opposed to a translation gain reported in the first quarter of 2018 due to a depreciation of the Srilankan rupee.
The net operating income of the Group recorded a marginal increase of 3.54% to Rs 13.222 billion, while operating expenses increased by 14.64% to Rs 6.418 billion largely due to salary increments of staff and an increase in general expenses on maintaining the Bank’s branches.
In other key indicators, the Bank’s net assets value per share stood at Rs 116.04 at the end of the first quarter of 2019 despite an increase in shareholders’ funds, as against Rs 117.15 at the end of 2018.