BOC posts Rs. 22.4 bn PBT in 1H 2024, up by 114%

Bank of Ceylon delivered a Profit Before Tax (PBT) of Rs. 22.4 billion, a growth of 114% compared to previous year PBT of Rs. 10.5 billion in the first half of 2024.

Bank of Ceylon Chairman, Kavan Ratnayaka stated that, “Inspired by 85 years of excellence, the Bank of Ceylon continues to foster progress and innovation.”

“Further initiatives are focused on supporting youth financing, empowering women entrepreneurs, and nurturing startups. Special attention is given to advancing green finance and supporting sustainable development goals, ensuring that growth contributes to environmental sustainability and well-being of society.”

“These efforts are crucial to driving broader economic growth and creating sustainable opportunities for all. The commitment to these priorities highlights the Bank’s role in shaping a prosperous future for the community at large.”

During the first half of 2024, the Bank achieved a PBT of Rs. 22.4 billion. Net interest income rose significantly to Rs. 57.5 billion, marking a 101% increase compared to Rs. 28.6 billion in the same period of 2023. The increase in interest income, which rose to Rs. 213.1 billion, was partially offset by a rise in interest expenses, which totaled to Rs. 155.6 billion.

Net fee and commission income continued to be a robust contributor, amounting to Rs. 9.9 billion, showcasing an impressive 14% year-on-year growth from Rs. 8.7 billion in the first half of 2023. The Bank’s ongoing investment in digital banking has also played a crucial role, as more

customers turned to digital channels for their banking needs, further boosting fee and commission income.

Impairment charges amounted to Rs. 3.3 billion for loans and advances and Rs. 4.6 billion for other financial assets, reflecting challenges faced by sectors still recovering from economic downturns and global disruptions. General Manager /Chief Executive Officer Russel Fonseka stated that, “The Bank is well-equipped to embrace advanced financial technologies and pursue strategic growth opportunities. Looking ahead, the Bank remains committed to enhancing digital banking solutions and expanding service offerings.”

“The strategic vision is centered on sustainable growth and reinforcing leadership in the Banking sector”.

“As the 2H of 2024 begins, the Bank of Ceylon is strategically positioned to navigate the evolving economic landscape with foresight and resilience.”

The Bank reported total operating income of Rs. 68.7 billion, reflecting significant growth of 163% compared to the previous year.

This increase was driven by substantial improvements in net interest income, net fee and commission income and trading income. Operating expenses amounted to Rs. 30.8 billion, marking a 27% year-over-year increase, which was mainly due to personnel costs, depreciation, amortization and other expenses also contributed to the overall increase in costs.

The Bank’s operating profit before taxes on financial services reached Rs.30.1 billion, a remarkable 101% improvement over the previous year. After accounting for Value Added Tax (VAT) and the Social Security Contribution Levy (SSCL), the PBT stood at Rs. 22.4 billion, reflecting a 114% increase.

Income tax expenses for the period amounted to Rs. 9.9 billion, resulting in a profit after tax of Rs. 12.5 billion. As of June 30, 2024, Bank of Ceylon’s total assets reached Rs. 4,423.3 billion, reflecting a slight increase of 0.3% from Rs. 4,411.7 billion in December 2023. This growth, despite economic challenges, solidifies the Bank’s leading position in Sri Lanka’s competitive banking sector.

The increase in total assets was primarily driven by significant rises in investment in debt and other instruments and investment in securities purchased under resale agreement surged by Rs 114 billion. Gross loans and advances amounted to Rs. 2.3 trillion as on June 30, 2024. Even though gross loan balance showed a decrease of 5 % due to LKR appreciation by 5.6% and low credit demand. The Bank has considered the possible impact from the Government’s Domestic Debt Restricting process too.

The Bank’s deposit base stood strong at Rs. 3.8 trillion as of  June 30, 2024, showcasing sustained customer confidence and the Bank’s strategic focus on deposit mobilization. Amidst the appreciation of the LKR, foreign currency (FCY) deposits increased by USD 14.0 million. The Return on Assets (ROA) before tax improved to 1.02% from 0.92% in December 2023, reflecting  enhanced profitability from the Bank’s asset base. The Bank maintained robust capital adequacy, with a Common Equity Tier 1 ratio of 10.85% and a Total Capital Ratio of 14.91%, both above Basel III requirements.

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