Cost-efficiencies drive 9-month growth for ComBank | Sunday Observer

Cost-efficiencies drive 9-month growth for ComBank

21 November, 2021

The Commercial Bank of Ceylon Group achieved equitable growth for the nine months ending September 30, 2021, despite a slowing down in some key contributors in the third quarter of the year.

The Group, comprising the Commercial Bank of Ceylon PLC, its subsidiaries and an associate, has reported a gross income of Rs 120.050 billion for the period, an improvement of 5.66% over the corresponding nine months of 2020, with the third quarter recording a growth of 4.34% in comparison with the 6.34% growth achieved for the first half of 2021.

Interest income, the biggest component of gross income, grew by 3.43% to Rs. 96.227 billion, improving on the 3.20% growth achieved up to June 2021, and interest expenses continued to decline, albeit at a lower rate than in the first half of the year, a media release from the Group stated.  

Net gains from derecognition of financial assets witnessed a decline of 36.10% due to a reduction in profits from the sale of Treasury Bonds and Sovereign Bonds by Rs 1.417 billion, in comparison with the third quarter of last year, the Group said.

Total operating income at Rs. 68.951 billion for the nine months, reflected a growth of 23.53% and the Group’s achievement of restricting impairment charges to Rs. 17.997 billion, an increase of only 7.56% as compared with a 47.44% growth at the end of the first half of 2021, resulted in net operating income growing by 30.37% to Rs. 50.954 billion. With the Group’s consistency in curtailing growth in operating expenses to 8.39% (8.42% for the first half of 2021), total operating expenses for the nine months increased by Rs. 1.647 billion to Rs. 21.280 billion.

Consequently, operating profit before VAT on financial services grew by a significant 52.55% to Rs 29.674 billion for the nine months, improving on the 41.09% growth recorded at the end of the first six months of the year.

Taken separately, Commercial Bank of Ceylon PLC reported profit before tax of Rs 24.425 billion for the period.

Total assets of the Group grew by Rs 200 billion or 11.35% over the nine months to reach Rs 1.962 trillion as at September 30, 2021. Gross loans and advances increased by Rs 105.195 billion or 10.94% to Rs 1.067 trillion. Total deposits of the Group recorded an improvement of Rs 161.272 billion or 12.53% in the nine months reviewed.