Bank of Ceylon earns 34% more

Bank of Ceylon’s post-tax profit for end of 2009 grew by US$4.4 million to US$17.4 million. The figure is a 34 percent increase from US$13 million in 2008, amid a challenging economic situation.

The Bank's operating profit before taxes reflected an increase of US$7.3 million or 20 percent, to US$43.8 million from US$36.5 million for the same period in 2008.

During the quarter, the total assets of the Bank grew steadily to reach US$4.6 billion by the end of September. It continued to be the largest asset base in the Sri Lankan banking system. Total deposits of the Bank which stood at US$2.83 billion at the end of September 2008 rose to US$3.48 billion at the end of September 2009, recording a growth of US$655 million or 23 percent.

Net interest income increased from US$84 million by third quarter 2008 to US$92 million by third quarter 2009, achieving a growth of US$6.38 million or 8 percent. However, interest margins have narrowed due to downward revision of interest rates.

On the other hand, remarkable growth in deposits has made the way to reduction in borrowings significantly by US$349 million, which made to soften the impact to the net interest margin. The Bank reduced its lending rates in April, May, June and September across all sectors in response to the Central Bank rate cuts and to pass the benefits to its customers in its bid to stimulate economic activities.

In order to secure the quality of advances and as a measure of prudence, the Bank increased its loan loss provision by US$5.29 million during the third quarter 2009.  Moreover, gross loans and advances recorded a slight contraction of 1.8 percent to US$2.48 billion during the period under review.

The Statutory Liquidity Ratio also improved to 28.39 percent in September 2009 from 21.57 percent in September 2008 mainly due to increase in customer deposits. The Capital Adequacy Ratio as at 30 September 2009 stood at 14.97 percent compared to 11.27 percent as at 30 September 2008.

The operating profit before taxes of the Bank of Ceylon Group increased to US$46.7 million in the period under review from US$40 million reported for the same period of the previous year. The Group’s post-tax profit stood at US$18.2 million signifying a growth of US$3.35 million, 23 percent over US$14.89 million recorded in the corresponding quarter of 2008. Group Total assets amounted to US$4.74 billion, reflecting a 10.5 percent growth.