The Commercial Bank of Ceylon Group has posted a strong operational performance in the first nine months as well as in the third quarter despite the continuing adverse effects of macroeconomic variables which have necessitated a tripling of impairment provisions for the nine months ended 30th September 2022 and reduced profits for the quarter as well as the year to date compared to the corresponding periods of last year.
Nevertheless, the Bank reported that the third quarter witnessed a reversal of the operating loss before Value Added Tax (VAT) on Financial Services of Rs. 3.581 billion reported for the second quarter of the year.
These achievements were recorded even after providing relief for affected businesses and individuals in line with directions issued by the Central Bank of Sri Lanka as well as the Bank’s own relief schemes which included deferment of repayment terms of credit facilities, concessionary rates of interest on eligible loan products (debt moratorium) and waiving off certain fees and charges following the global pandemic, the Bank said.
Noting that the external challenges that have depressed profit and other indicators continued in the third quarter, Commercial Bank Chairman Prof. Ananda Jayawardane said: “The growth we have recorded in business volumes indicates that core banking operations remained intact. The single biggest impact on growth in terms of bottom line continues to be the burgeoning provisioning for impairment, which is an unavoidable response to the prevailing economic environment. Such provisioning assures our stakeholders that the Bank is financially prepared for any future contingencies.”
The Bank’s Managing Director and CEO Sanath Manatunge commented: “Our results underline that at Commercial Bank, risk appetite and risk tolerances continue to be well-managed, especially in the context of the challenges faced by the banking sector. We have continued our focus on preserving the quality of the loan book, managing interest rates and liquidity, while improving compliance to minimize reputational risk. The increase in the cost of funds is inevitable, but all possible steps have been taken to increase the fee-based income and to maintain non-interest costs at acceptable levels.”
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