Strong asset and other income growth combined with an emphasis on prudent provisioning,have enabled the Commercial Bank of Ceylon Group to end 2020 on a stable platform for growth.
The Group, comprising the private bank, its subsidiaries and an associate, has reported Gross income of Rs. 151.966 billion for the year ending December 31, 2020, which although a marginal improvement over the preceding year, included net interest income of Rs. 50.869 billion for the full year and Rs. 14.073 billion for the last quarter alone, representing growths of 5.20% and 17.93% respectively.
The Bank also achieved a creditable improvement to its CASA ratio from 37.10% to 42.72% helping to reduce interest expenses.
One of the noteworthy contributors to performance in the year under review was other income of Rs. 16.039 billion, reflecting a growth of 86.97% from Rs. 8.578 billion for 2019. Consequently, total operating income of the Group for the year grew by 13.36% to Rs. 76.729 billion and by 17.61% to Rs. 20.912 billion for the fourth quarter alone. The impairment charges and provisioning for other losses increased by Rs. 10.088 billion or 89.03% YoY, taking impairment charges for the year to Rs. 21.420 billion.
As a result, net operating income declined by 1.85% to Rs. 55.310 billion, but the Group’s success in reducing operating expenses marginally to Rs. 26.263billion, enabled it to post operating profit of Rs. 29.047 billion before taxes on financial services for the year, limiting the YoY decline to 3.91%. Notably, operating profit before taxes on financial services for the final quarter amounted to Rs. 9.595 billion, a growth of 19.66%.
Meanwhile, net fees and commissions reduced by 8.65% to Rs. 9.822 billion.
Taken separately, the Commercial Bank of Ceylon PLC reported a profit before tax of Rs. 23.511 billion for the year, a growth of 5.25% and profit after tax of Rs. 16.373 billion, a reduction of 3.83%.
Total assets of the Group grew by Rs. 354 billion or 25.09% to Rs. 1.763 trillion as at December 31, 2020. Gross loans and advances of the Group grew by Rs. 31.122 billion or 3.34% to Rs. 961.859 billion.
Total deposits of the Group recorded a growth of Rs. 218 billion or 20.36% as at December 31, 2020. The Bank’s Tier 1 capital adequacy ratio (CAR) stood at 13.217% as at December 31, 2020, after an infusion of US$ 50 million via an equity investment by the International Finance Corporation (IFC) Group.