The Commercial Bank of Ceylon Group has reported gross income of Rs 167.668 billion including a growth in interest income to Rs 150.812 billion for the first half of 2023, achieving topline growth of 40.29% and 71.15%.
Comprising the bank, its subsidiaries and an associate, the Group also improved fee and commission income by 22.27% to Rs 14.377 billion, net fee and commission income by 19.30% to Rs 10.591 billion, and net other operating income by 236.42% to Rs 17.086 billion from a loss of Rs 12.524 billion recorded for the first half of 2022.
However, the Group’s net interest income reduced by 8.01% to Rs 37.450 billion. The Group also recorded a net loss from trading of Rs 15.531 billion, as a result of realised and unrealized losses from forwards, spots and swap transactions owing to the appreciation of the Rupee, in contrast to a net gain of Rs 32.102 billion from trading in the corresponding six months of the previous year.
Total operating income of the Group declined by 27.03% to Rs 50.520 billion but net operating income for the period under review improved by 9.69% to Rs 37.309 billion with the Group making a provision of Rs 13.211 billion for impairment charges and other losses for the six months. Impairment charges for 2022 included a substantial additional provision made for foreign currency denominated Government Securities owing to the downgrading of Sri Lanka’s sovereign rating. Total operating expenses increased by 18.04% to Rs 21.285 billion.
A revaluation of the Group’s assets in foreign currency consequent to the appreciation of the Rupee in the six months under review resulted in total assets of the Group reducing by Rs 37 billion or 1.50% to Rs 2.462 trillion as at June 30, 2023. Gross loans and advances of the Group also reduced by 4.71% over the six months to Rs 1.188 trillion, partly due to the revaluation impact on foreign currency denominated loans and advances as a result ofthe appreciation of the Rupee. Total deposits of the Group stood at Rs 1.959 trillion as at June 30, 2023, with Rupee-denominated deposits increasing by Rs 48.47 billion since end 2022, but the value of deposits denominated in foreign currency reducing significantly due to the appreciation of the Rupee.
The Group reported an operating profit before taxes on financial services of Rs 16.024 billion for the six months, a marginal improvement of 0.26%. Taxes on financial services reduced by 25.70% to Rs 1.934 billion, resulting in profit before income tax increasing by 5.36% to Rs 14.092 billion.
With income tax expenses for the period up by 38.21% to Rs 5.802 billion as a result of an increase in the income tax rate to 30% from 24% for the Group’s Sri Lankan operations, the Group’s net profit of Rs 8.290 billion represented a decline of 9.67%. Notably the Group converted a net loss of Rs 2.597 billion for the second quarter of last year to a net profit of Rs 3.931 billion for the second quarter of 2023.
Taken separately, Commercial Bank of Ceylon PLC reported a profit before tax of Rs 12.971billion for the six months, an improvement of 3.14% while profit after tax for the period was down by 12.55% to Rs 7.514billion.