ComBank Group navigates devaluation impact in complex Q1 performance
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Mr. Sanath Manatunge (left) and Mr. Sellathurai Prabagar
The Commercial Bank Group has posted a balanced financial performance for the first quarter of 2022, highly influenced by the sharp devaluation of the Rupee impacting key performance indicators both positively and negatively.
The group, comprising the Commercial Bank of Ceylon PLC, its subsidiaries and an associate, reported gross income of
Rs. 54.573 billion, total operating income of Rs. 34.244 billion and net operating income of Rs. 28.284 billion for the three months ended 31st March 2022, recording improvements of 33.41 per cent, 41.74 per cent and 66.33 per cent respectively, the banking group said in a media release.
Year-on-Year growth in the loan book coupled with the positive impact of the unprecedented deprecation of the Rupee witnessed in March 2022 on interest income from the foreign currency denominated assets portfolio saw interest income for the three months increasing by
19.41 per cent to Rs. 37.847 billion. Interest expenses too increased by 17.30 per cent to Rs. 19.024 billion due to the YOY growth in the deposit portfolio as well as a substantial increase in interest expenses booked on deposits and borrowings denominated in foreign currency owing to the sharp depreciation of Rupee. As a result, the group posted net interest income of
Rs. 18.823 billion for the quarter, an improvement of 21.62 per cent.
Commenting on the quarter reviewed, Commercial Bank Chairman Prof. Ananda Jayawardane said: “These are extraordinary times for business in
Sri Lanka and for banks in particular. It takes a great deal of exceptional financial acumen and maturity to navigate the mercurial challenges that prevail. Our results for the first quarter reflect the depth of the managerial skills at the disposal of the bank.”
The bank’s newly-appointed Managing Director and CEO Sanath Manatunge said: “The unprecedented depreciation of the Rupee impacts income and profits as well as key balance sheet indicators. This can have a distortionary effect on performance. We have nevertheless posted solid results and are constantly taking swift actions and necessary measures to minimise the negative impacts of the rapid changes taking place in external factors.”
Consequent to the extraordinary increase in income tax for the reviewed quarter, the group reported profit after tax of Rs. 11.775 billion for the three months, an improvement of 73.23 per cent.
Meanwhile the bank announced that Mr.Manatunge, Chief Operating Officer, has been appointed as Managing Director and CEO effective May 12. It also announced the appointment of Sellathurai Prabagar as Chief Operating Officer to fill the vacancy arising from Mr. Manatunge’s promotion. Mr. Manatunge succeeds Sivakrishnarajah Renganathan who retired on May 11 ending a distinguished 41-year career at Commercial Bank.
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