ComBank improves Q2 earnings despite mounting challenges
View(s):The Commercial Bank Group has reported operating profit before impairment charges and taxes of Rs. 19.476 billion for the first half of 2019, a 9.45 per cent increase over same period of 2018.
The Commercial Bank of Ceylon PLC, its subsidiaries and associates recorded gross income of Rs. 73.587 billion for the six months ending June 30, 2019, an increase of 13.31 per cent over the figure for the corresponding period of 2018, restated as Rs.64.944 billion in line with the requirements of SLFRS 9 which was implemented from the fourth quarter of that year, the bank said in a media release.
Despite slower loan book growth and an increase in non-performing loans, interest income grew by 12.90 per cent to Rs. 64.622 billion.
A sizable 195.42 per cent increase in net gains from trading due to a favourable market rate movement contributed to other income growing by 71.66 per cent to Rs.3.134 billion, the bank said. As a result, total operating income for the period under review stood at Rs. 32.118 billion with a growth of 10.05 per cent over the corresponding period of last year.
The total operating expenses of the group for the period amounted to Rs.12.642 billion which reflected an increase of 10.98 per cent over the corresponding six months of 2018.
Consequently, operating profit before taxes on financial services amounted to Rs.13.949 billion, a negative growth of 3.31 per cent over the corresponding period of last year.
However, with taxes on financial services increasing by as much as 39.52 per cent, group profit after tax reduced by 16.85 per cent to Rs. 6.673 billion for the six months compared to the first half of 2018.
“Our six-month results mirror the challenges faced by key sectors of the economy and demonstrate that even a bank of the size and strength of Commercial Bank is not immune to the vagaries of the market,” Commercial Bank Chairman Dharma Dheerasinghe said.
Managing Director/CEO S. Renganathan added: “Our second quarter witnessed an improvement over the first quarter of 2019, which is encouraging. While we remain concerned at the need for higher provisioning every quarter for sectors that are under the pressure of debt servicing, we are confident that our strategic responses to the needs of the period will minimise the adverse impact on our performance.”