Combank sees strong growth in new loans; June profits up 10%
Commercial Bank of Ceylon PLC reported some solid financial performance for the quarter ended June 30, 2018 (2Q18), as the country’s largest private sector lender saw strong growth in new loans and deposits.
But the loan impairments rose by several folds to weigh on profits. Commercial Bank reported earnings of Rs.4.20 a share or Rs.4.2 for the April-june period, up 10 percent, from Rs.4.15 a share or Rs.3.8 billion made for the corresponding quarter last.
The bank’s net interest income rose by 31 percent year-on-year (YOY) to Rs.12.1 billion, lifted by higher margins and the strong growth in new loans.
Commercial Bank, with an asset base of Rs.1.2 trillion, gave Rs.74 billion in new loans during the six months ended June 30, with an increase just shy of 10 percent. The bank managed to enjoy a net interest margin of 4.05 percent on its total loan book of Rs.829 billion, up from 3.62 percent six months ago. Meanwhile, the fee and commission incomes, which are also directly linked to the loans, rose by a strong 26 percent YOY to Rs.2.5 billion. However, this strong pre-impairment level performance was hampered by the hefty loan-loss provisions made during the period.
The provisions made against the possible loan losses of individual customers soared to Rs.1.2 billion, from Rs.61 million during the quarter in 2017.