ComBank maintains growth impetus in Q2 despite external pressures
View(s):Characteristically agile and proactive responses to market-specific dynamics have enabled the Commercial Bank of Ceylon Group to achieve commendable growth in the first half of 2024, despite a reduced topline, the bank said in a statement on Thursday.
The group, comprising Sri Lanka’s biggest private sector bank, its subsidiaries and an associate, reported gross income of Rs.163.12 billion for the six months ending 30th June 2024, a decline of 2.71 per cent over the corresponding period of 2023. However, gross income for the second quarter, at Rs.82.91 billion, was down only by a marginal 0.73 per cent, reflecting an improvement over the first quarter.
The reduction in gross income was attributed to reduced interest income due to lower market interest rates on loans and government securities compared to 2023. Interest income for the six months under review amounted to Rs.139.26 billion, a drop of 7.66 per cent, but with interest expenses for the same period reducing by 28.86 per cent to Rs.80.64 billion as a result of an improvement in the bank’s CASA ratio and repricing of deposits, net interest income grew by 56.53 per cent to Rs.58.62 billion.
Notably, the CASA ratio of the Bank improved to 39.95% as at 30th June 2024, from 39.23% as at December 2023 and 38.83% at the end of the first half of the previous year.
“With macroeconomic variables continuing to exert pressure on core banking operations, we intensified our focus on portfolio management and cost efficiency,” noted Commercial Bank Chairman Sharhan Muhseen. “The success of these initiatives is reflected in the bank’s improved key performance ratios, including profitability, alongside our sustained balance sheet growth.”
Commercial Bank Managing Director/CEO Sanath Manatunge emphasised the bank’s continued commitment to lending as a vital responsibility in supporting economic recovery, even as the appreciation of the Rupee impacted the value of the loan book. “We remain steadfast in raising funds to bolster the SME sector, despite the need to increase provisions for impairments and other losses, because our dedication to core banking functions remains unwavering,” he added.
Taken separately, Commercial Bank of Ceylon PLC reported profit before tax of Rs.28.02 billion and profit after tax of Rs.18.10 billion for the six months, achieving growths of 116.02 per cent and 140.87 per cent, respectively, for the first half of 2024.
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