The Commercial Bank Group, comprising Sri Lanka’s biggest private sector bank, its subsidiaries and an associate, has reported gross income of Rs 163.12 billion for the six months ending June 30, 2024, a decline of 2.71% over the corresponding period of 2023. However, gross income for the second quarter, at Rs 82.91 billion, was down only by a marginal 0.73%, reflecting an improvement over the first quarter.
Interest income for the six months under review amounted to Rs 139.26 billion, a drop of 7.66%, but with interest expenses for the same period reducing by 28.86% to Rs 80.64 billion as a result of an improvement in the Bank’s CASA ratio and repricing of deposits, net interest income grew by 56.53% to Rs 58.62 billion. Notably, the CASA ratio of the Bank improved to 39.95% as at June 30,2024, from 39.23% as at December 2023 and 38.83% at the end of the first half of the previous year.
“With macroeconomic variables continuing to exert pressure on core banking operations, we intensified our focus on portfolio management and cost efficiency,” noted Commercial Bank Chairman Sharhan Muhseen.
Managing Director/CEO Sanath Manatunge emphasised the Bank’s continued commitment to lending as a vital responsibility in supporting economic recovery, even as the appreciation of the Rupee impacted the value of the loan book. The Group ended the first half of 2024 with gross loans and advances of Rs 1.36 trillion, a growth of Rs 67.55 billion or 5.21% over six months, at a monthly average of Rs 11.26 billion. Deposits grew by 2.1% to Rs 2.19 trillion in the six months reviewed, despite the appreciation of rupee against the dollar, reflecting average monthly growth of Rs 7.50 billion, and YoY growth of 11.96%, with monthly average growth of Rs 19.52 billion over 12 months.
Total assets of the Group increased by Rs 228.30 billion or 9.27% YoY, and by Rs 34.85 billion or 1.31% in the period under review to reach Rs 2.690 trillion as at 30th June 2024. Total operating income of the Group for the six months grew by 52.92% to Rs 77.26 billion. The Group made provisions of Rs 19.02 billion for impairment charges and other losses, an increase of 43.95% over the figure for the corresponding six months of 2023.
Net operating income for the period increased by 56.10% to Rs 58.24 billion. Taxes on financial services increased by 140.96% to Rs 4.66 billion, leading to a Group profit before tax of Rs 29.12 billion for the six months, an improvement of 106.62%.
Taken separately, Commercial Bank of Ceylon PLC reported profit before tax of Rs 28.02 billion and profit after tax of Rs 18.10 billion for the six months, achieving growths of 116.02% and 140.87%, respectively, for the first half of 2024.
In other key performance indicators, the Bank reported its Tier 1 and Total Capital Ratios at 11.583% and 15.117% respectively as at 30th June 2024, both comfortably above the statutory minimum ratios of 10% and 14% respectively. The Bank’s interest margin improved to 4.41% for the six months, compared to 3.32% for 2023. Return on assets (before tax) stood at 2.17% compared to 1.27% for 2023, while its return on equity grew to 16.76% from 9.78% for 2023.
The Bank’s Cost to income ratio inclusive of taxes on financial services stood at 37.82% compared to 40.31% in 2023.
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