BOC says obliged to national development in profit-share

The Bank of Ceylon (BOC) chief this week rejected criticism from the bank in some sections of the media about its profits and results saying “as the leading state bank in Sri Lanka, we have to balance profit making with our obligations to nurture national development. If not for this constraint, our profits would have been even higher.”

Udayasri Kariyawasam, BOC Chairman, told reporters during a briefing on the bank’s results for 2006 said that contrary to negative coverage in some media about the results, the report of the Auditor General given in the Annual Report for 2006 confirms the bank’s preliminary results announced in January without any qualification.

A statement issued at the briefing said the bank had achieved its best ever results during 2006 in which annual income increased by 29% to Rs 35.19 billion in 2006 from Rs. 27.32 billion.

Annual profits before VAT and income tax increased by 46% to Rs 5.9 billion from Rs. 4.03 billion while the bank’s assets grew by 18% to Rs 378.3 billion to Rs. 319.7.

“The total contribution due to the government (comprising dividend, VAT and income tax) increased by 50% from Rs. 2.57 billion in 2005 to Rs. 3.84 billion in 2006, which is almost three times the corresponding increase of 17% in the previous year,” it said.
BOC’s subsidiary companies collectively show an increase in annual turnover of 23% from Rs. 2.18 billion in 2005 to Rs. 2.68 billion in 2006 while their profit after tax showed an increase of 9% from Rs. 0.44 billion in 2005 to Rs. 0.48 billion in 2006.The bank’s domestic rupee deposits grew by 22% from Rs. 140.87 billion in 2005 to Rs. 172.38 billion in 2006.

Out of the loan schemes, housing loans, personal loans and Govi Shakthi loan schemes were performing well above their target levels. During 2006, a large number of loan applications were received and approvals were granted for 12 large projects totalling Rs.1.6 billion, 663 SME projects totalling Rs.1.8 billion, and 20,000 micro projects totalling Rs.1 billion.

The Bank of Ceylon is the highest ranked Sri Lankan bank in the Bankers Almanac, with the largest asset base worth over Rs. 400 billion. It has the largest capital base of Rs. 18 billion among local banks, and the highest single borrower exposure up to Rs. 7.3 billion. It has the largest customer base with over 6.2 million accounts and the largest online network with over 500 online service points, the statement said.