The Commercial Bank of Ceylon Group has made a strong start to 2025, recording healthy profit and balance sheet growth in the first quarter of the year. Comprising the bank, its subsidiaries and an associate, the Group reported in a filing with the Colombo Stock Exchange (CSE) that assets reached Rs 2.999 trillion as at March 31, 2025.
Gross income for the quarter grew by 9.85% to Rs 88.10 billion, while interest income improved by 3.14% to Rs 72.60 billion. Interest expenses reduced by 10.09% to Rs 38.38 billion as a result of repricing of liabilities amid the lower rates regime that prevailed, generating a 23.53% growth in net interest income, which amounted to Rs 34.21 billion.
Total operating income grew by 33.40% to Rs 46.62 billion, but the Group’s provision for impairment charges and other losses increased by 110.44% to Rs 7.23 billion with additional provisions made on a prudential basis for individually-significant customers, which resulted in an improvement in the Bank’s impaired loans (Stage 3) ratio.
Consequently, net operating income for the three months, at Rs 39.39 billion, reflected a growth of 25.00%, while the Group’s ability to keep operating expenses down to Rs 12.80 billion, an increase of only 6.20%, resulted in operating profit before taxes on financial services improving by 36.64% to Rs 26.59 billion.
Taxes on financial services increased by 48.18% to Rs 4.03 billion resulting in Group profit before tax of Rs 22.56 billion for the three months, an improvement of 34.77%. With income tax increasing by 27.92% to Rs 7.58 billion, the Group reported net profit of Rs 14.97 billion for the quarter reviewed, reflecting bottom line growth of 38.52%. Taken separately, Commercial Bank of Ceylon PLC reported a profit before tax of Rs 21.88 billion and profit after tax of Rs 14.50 billion for the three months, posting growths of 35.10% and 38.71%.
The Group achieved substantial growth in its loan book in the first quarter, continuing the trend of 2024; had reversed a net loss of Rs 1.9 billion on trading incurred in the corresponding quarter of the previous year; nearly tripled net other operating income, and continued to maintain the best CASA ratio despite greater demand for fixed deposits. Total assets of the Group increased by Rs. 122.85 billion or 4.27% over the three months under review to reach Rs 2.999 trillion as at March 31, 2025. The Group ended the quarter with gross loans and advances of Rs 1.642 trillion, a growth of Rs 116.75 billion or 7.65% over three months, at a monthly average of Rs 38.92 billion. Loan book growth over the preceding 12 months was Rs 326.02 billion, with YoY growth of 24.77%, averaging Rs 27.17 billion per month.
Deposits grew by Rs 105.82 billion or 4.59% to Rs 2.412 trillion, reflecting YoY growth of 12.67%.
In terms of profitability, the Bank’s net interest margin increased to 4.74% for the quarter compared to 4.27% reported for 2024 and 4.22% a year ago. The Bank’s return on assets (before tax) improved to 3.12% compared to2.54% a year ago, while the return on equity improved to 21.29% from 19.53% for the corresponding quarter of the preceding year.
