ECONOMYNEXT – Sri Lanka’s Commercial Bank of Ceylon reported profits of Rs 11.6 billion in the March 2022 quarter, up 73% from a year earlier as foreign exchange gains outpaced provisions and net interest income also increased.
Commercial Bank Group reported profit of 9.42 rupees per share in interim accounts for the March 22 quarter.
Net fee and commission income increased by 35% to Rs 4.0 billion.
Net interest income increased by 19% to 37.8 billion rupees, interest expense increased by 17% to 19.0 billion rupees and net interest income increased by 21% to 18 .8 billion rupees.
Loans and advances rose 12.5% in rupees, partly due to inflation in dollar-denominated loans as the loose peg to the US dollar broke down.
Provisions for loan losses fell 16% to 5.9 billion rupees.
Other net operating income was a loss of 12.2 billion rupees, compared to a gain of 3.6 billion rupees last year.
“The foreign exchange impact on impairment charges for loans and advances and government securities denominated in foreign currencies has been recognized in other net operating income where the corresponding foreign exchange gains are recognized,” the bank said. to shareholders.
Tier I capital adequacy stood at 9.835% in March, above the required minimum of 9%.
Holders of Sri Lankan government sovereign bonds, which are now rated near default, are set to get a haircut.
However, banks with net assets in dollars should realize gains in terms of rupees. Significantly higher rates also lead to losses relative to the market in rupee bond portfolios.
Commercial Bank’s total assets increased by 15% to Rs 2.2 billion. Net assets increased by 3.7% to 175 billion rupees at the group level and by 2.5% net to 169 billion rupees at the bank level. (Colombo/May 16/2022)