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Net interest income up 30.56% to Rs 66.416 billion
The Bank’s CASA ratio further strengthens to 47.83%, an industry benchmark
Cost/revenue ratio of the bank (excluding VAT on financial services)
improved to 31.61% compared to 33.95% at the end of 2020 and 38.51% at the end of 2019
Total taxes increased to Rs 14.512 billion
Impairment charges increased by 17.37% to Rs 25.140 billion
The Commercial Banking Group ended 2021 with gross income of Rs 163.675 billion, an improvement of 7.70%, with interest income accounting for over 80% of revenue in a year of mixed fortunes.
The group, comprising Commercial Bank of Ceylon PLC – Sri Lanka’s largest private sector bank – its subsidiaries and associate, reported interest income of Rs 132.818 billion for the financial year ended 31 December 2021, reflecting a growth of 7.04%. With interest expense for the year down by 9.31% to Rs 66.402 billion, the Group realized net interest income of Rs 66.416 billion, an increase of 30.56%.
The last quarter of the year saw interest income rise by 17.84% to reach 36.592 billion rupees and account for more than 83% of the group’s three-month gross income of 43.625 billion rupees, up 13 .76% compared to the fourth quarter of 2020. was despite interest charges increasing by 4.30% to Rs 17.709 billion in the last quarter due to an increase in interest rates.
Total operating income for the year under review increased by 21.98% to 93.598 billion rupees, and the Group’s impairment charges and other losses increased by 17.37% to 25.140 billion rupees.
Net operating profit for the full year improved by 23.77% to 68.458 billion rupees but grew at a comparatively lower rate of 7.89% to 17.504 billion rupees due to impairment charges higher expected in the fourth quarter, the Bank said. Total operating expenses increased by 12.93% to Rs 29.658 billion due to an increase in personnel expenses following the signing of a collective agreement effective in January 2021, while the increase in General costs led to an increase in other operating expenses for the year by 18.01% to Rs 9.638 billion.
The operating profit before VAT on financial services increased by 33.58% to Rs 38.801 billion and the group’s VAT on financial services for the year increased by 28.99% to Rs 5.845 billion, while the profit before income tax for the year improved by 34.41% to Rs 32.957 billion. With income tax expense increasing at a relatively lower rate of 16.60% to Rs 8.667 billion due to the reduction in income tax rate, the Group recorded an after-tax profit of Rs 24.290 billion. for the year, achieving growth of 42.16% before providing for the proposed additional tax, which had not been enacted in Parliament at the time of writing. It was therefore not provisioned for the year under review.
Taken separately, Commercial Bank of Ceylon PLC reported pre-tax profit of Rs 32.001 billion for the year under review, achieving robust growth of 36.11% and post-tax profit of Rs 23.606 billion, registering an improvement of 44, 17%.
Commenting on the results, Commercial Bank Chairman, Justice K. Sripavan said, “The performance of the group can be described as outstanding when the external challenges of the year are taken into account. Our focus on the core mission and the needs of the hour has resulted in a focus on improving the customer experience, and we are proud of how our teams have served with the utmost dedication. , putting our customers first, as they have for the past 101 years.
Commercial Banking Managing Director and Group CEO S. Renganathan highlighted that the Bank was able to improve its key performance ratios in 2021, to become even more financially stable and better positioned to continue its mission as a bank of importance. systemic. “In the face of uncertainty, we continued to build on our momentum and our aid programs from last year, becoming the leading lender for COVID-19 relief among private sector banks in Sri Lanka. “, did he declare. “We continued to demonstrate remarkable operational resilience throughout the pandemic through customer centricity, digital engagement and operational excellence.”
The Group’s total assets increased by Rs 221 billion or 12.54% during the year to reach Rs 1.983 trillion as of December 31, 2021.
The Group’s gross loans and advances increased by Rs 133 billion or 13.83% to reach Rs 1.095 trillion, registering an average monthly growth of Rs 11 billion over the 12 months.
The Group’s total deposits recorded an improvement of Rs 186 billion or 14.46% in the 12 months under review at a monthly average of Rs 15.5 billion to reach Rs 1.473 trillion as of December 31, 2021.
A notable achievement in the year under review was the continued improvement of the Bank’s CASA ratio, an industry benchmark. For the financial year ended December 31, 2021, the Bank’s CASA ratio stood at 47.83%, an improvement compared to 42.72% at the end of 2020.
Elaborating on some of the highlights of revenue performance for the year under review, the Bank said that the Group’s net fee and commission income improved by 24.64% to Rs 12.242 billion, while other net operating income increased by 28.72% to Rs. 10.002 billion, helped by foreign exchange gains of Rs 1.4 billion. The Group recorded a net gain of Rs 1.936 billion on transactions and a net gain of Rs 3.002 billion on derecognition of financial assets, the latter figure reflecting a decline due to reduced gains from the sale of Treasury bills and sovereign bonds.
In other key indicators, the Bank’s basic earnings per share improved by 33.49% from Rs 14.81 to Rs 19.77, while its net asset value per share rose at Rs 138.08 against Rs 134.67 at the end of 2020.
The cost/income ratio before VAT on the Bank’s financial services improved to 31.61% at the end of the year under review, compared to 33.95% at the end of 2020 and 38.51% at the end of 2019. cost/income VAT included on financial services Services improved to 37.97% compared to 39.96% at the end of 2020 and 49.41% at the end of 2019.
The Bank’s Tier 1 Capital Adequacy Ratio (CAR) stood at 11.923% as of December 31, 2021, and its Total Capital Ratio stood at 15.650%, compared to the revised minimum requirements of 9% and 13% respectively imposed by the regulator following the covid19 pandemic.
The Bank’s gross non-performing loans (NPL) ratio improved to 4.62% from 5.11% at end-2020, while its net NPL ratio improved to 1.44% from 2.18% as of December 31, 2020.
The Bank’s interest margin improved to 3.51% from 3.17% for the full year 2020. Similarly, return on assets (pre-tax) and return on equity also improved to 1.74% and 14.66% respectively for the year ended December 31, 2021, compared to 1.51%. and 11.28% a year ago.