ComBank ends tough 2020 with platform for growth
View(s):Strong asset and other income growth combined with an emphasis on prudent provisioning in one of the most challenging years on record, have enabled the Commercial Bank of Ceylon Group to end 2020 on a stable platform for growth, with better liquidity than most peers and adequate provision cover.
The banking group has reported gross income of Rs. 151.966 billion for the year ending December 2020, which although a marginal improvement over the preceding year, included net interest income of Rs. 50.869 billion for the full year and Rs. 14.073 billion for the last quarter alone, representing growths of 5.20 per cent and 17.93 per cent, respectively.
The group’s operating profit before taxes on financial services, taxes on financial services declined by 37.55 per cent to Rs. 4.531 billion due to the abolition of the Debt Repayment Levy (DRL) and Nation Building Tax (NBT) from January 2020 and December 2019 respectively, the bank said in a media release.
Profit before income tax recorded an improvement of 6.68 per cent over the previous year to Rs. 24.520 billion for 2020. Significantly, profit before tax for the fourth quarter alone was up by an impressive 30.25 per cent to Rs. 8.126 billion. The group’s income tax charge for the year, at Rs. 7.433 billion, reflected an increase of 33.6 per cent principally because the previous year’s income tax computation was reduced by an exemption granted on the interest income from Sri Lanka Development Bonds.
Commenting on the year’s results, Commercial Bank Chairman Justice K. Sripavan who commenced his term in December 2020 said the bank had on careful analysis, taken a decision to set aside one of the highest amounts in the industry in terms of provisioning for impairment charges to ensure that it would have a cushion against the continuing effects of the pandemic on several sectors of business. “Much of the impact of the increase in impairment charges was absorbed in the third quarter, and the figures for the fourth quarter show that we are now well-positioned to face the challenges of 2021 and beyond,” he said.
Commercial Bank Managing Director S. Renganathan said: “The bank’s performance is an affirmation that every possible measure has been taken to respond to the challenges as well as the needs of the period under review in a manner that is inclusive of all stakeholder groups.”