Bank of Ceylon posts Rs 9.3 Bn. PBT for 1Q, growth of 180 %
During the first quarter of 2024, Bank of Ceylon demonstrated impressive growth and resilience, achieving a Profit Before Tax (PBT) of Rs. 9.3 billion, a substantial increase compared to the previous year, illustrating its dedication in challenging economic conditions.
As favorable conditions emerge, the Sri Lankan economy is expected to achieve moderate growth in 2024, signaling a pathway towards economic stabilization after setbacks experienced in previous years.
Bank of Ceylon Chairman, Kavan Ratnayaka stated that “Youth possess a natural ability to embrace emerging technologies and trends, often leading to the generation of innovative solutions that might not be amply materialized in the industry. Consequently, many youth-led enterprises pursue financing to address their investment and working capital requirements. To bridge this gap, Bank of Ceylon has introduced the BOC Youth concept to develop young entrepreneurs to meet their investment and working capital requirements.”
General Manager/ CEO Russel Fonseka stated that, “The soundness of banks is important, as it contributes towards maintaining confidence in the financial system. The Bank adeptly managed its liquidity position by strategically navigating its deposit base, continuously funding essential sectors. Despite facing various challenges, key performance indicators are showing strong results, surpassing regulatory requirements.”
The Bank’s interest income for the quarter reached to Rs. 108.6 billion, making a significant contribution to its total income even though it reflected a reduction of 21% YoY in line with the low interest regime. Similarly, interest expenses also decreased to Rs. 82.7 billion with 31% reduction, resulting in a Net Interest Income (NII) of Rs. 25.9 billion with 39% growth YoY. Net fee and commission income remained robust at Rs. 4.9 billion with 11% growth, reflecting continued growth in card transactions and remittance services.
Concerted efforts to support customers through unexpected economic turmoil in previous years helped the Bank to manage its stage 3 loan ratio at 5.51% as of the end of 1Q-2024. During the quarter, an impairment provision of Rs. 2.7 billion was allocated for loans and advances, maintaining provision coverage of 60% for stage 3 loans.
Total operating income reached Rs. 30.4 billion. With an impairment provision of Rs. 3.2 billion and operating expenses of Rs. 14.6 billion, the Operating Profit Before Taxes on Financial Services amounted to Rs. 12.5 billion, marking a notable improvement of 143% compared to the previous year.
The Profit Before Tax (PBT) of Rs. 9.3 billion was reported after charging the Value Added Tax (VAT) and Social Security Contribution Levy (SSCL) by reporting 180% growth.
Furthermore, income tax expenses totaling to Rs. 4.3 billion were accounted for the quarter, resulting in a profit after tax of Rs. 5.1 billion.As of the end of March 2024, the Bank maintained a strong financial position, with total Assets amounting to Rs. 4.3 trillion and total Deposits of Rs. 3.7 trillion.Notably, Net Loans and Advances amounted to Rs. 2.1 trillion, and total Investments amounted to Rs. 1.9 trillion. During the period under review, LKR appreciated by 7%, in line with that, foreign currency assets and liabilities came down in LKR terms which were the main reason for reporting a contraction inassets book by end March 2024.
The Bank achieved a Return on Assets (ROA) ratio of 0.86% and reported a Return on Equity (ROE) ratio of 8.02%.
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