Strong performance from ComBank after absorbing ISB restructure loss of Rs.45 bn
View(s):The Commercial Bank of Ceylon Group, comprising Sri Lanka’s largest private sector bank, its subsidiaries and an associate, has reported an exceptionally strong financial performance in 2024.
Prudent provisioning for impairment charges and other losses, effective balance sheet management and strong lending growth helped mitigate a substantial loss materialised from the restructuring of the Sri Lanka International Sovereign Bonds (SLISBs) held by the bank, it said in a media release on its 2024 results..
The group recognised its full net loss of Rs.45.11 billion, from the restructuring of SLISBs in the final quarter of the year, resulting in gross income for the 12 months ending December 31, 2024 reducing by 19.50 per cent to Rs.274.98 billion. However, a net impairment reversal of Rs.62.30 billion, primarily due to provision reversals in respect of SLISBs, significantly cushioned the overall impact. Lower interest rates brought interest income down by 7.54 per cent to Rs.275.22 billion, further impacting the group’s topline.
Total tax charges of the group for the year amounted to Rs.61.83 billion, well over triple the Rs.16.99 billion tax charge in respect of the preceding year.
Taken separately, Commercial Bank of Ceylon PLC reported a profit before tax of Rs.95.53 billion and a profit after tax of Rs.54.07 billion for the year reviewed, recording growths of 199.67 per cent and 164.28 per cent, respectively.
Commercial Bank Managing Director/CEO Mr. Sanath Manatunge noted that the bank had in 2023 proactively increased its provision cover for possible losses from Sri Lanka International Sovereign Bonds from 35 per cent to 52 per cent, and further increased the cover to 54 per cent in the second quarter of 2024, resulting in a cumulative impairment provision of Rs.92.86 billion. on SLISBs up to the date of derecognition of these bonds. These measures helped the Bank mitigate the net losses sustained on the restructuring of these bonds.
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