BOC’s 2018 pre-tax profit of Rs. 31.9 bn, highest in the industry

Bank of Ceylon, having nearly completed 80 successful years, has closed 2018 with another record of Rs. 31.9 billion Profit Before Tax (PBT) with a growth of 5 per cent along with the spearheaded growth reported across its balance sheet

Its CEO/ General Manager Senarath Bandara said that these notable achievements once again propagate the readiness of the bank to continue with its undisputed market leadership by outperforming even in the midst of a challenging environment.

Total operating income grew by 20 per cent within the year reaching Rs. 89 billion. Net interest income contributed to 74 per cent of the total operating income and the Year on Year (YoY) growth of the net interest income has been 12 per cent. The growth in interest income raised through the core business of the bank has been the major contributor for this growth.

The net fee and commission income of the bank increased by 11 per cent during the year mainly backed by fee and commission income collected through card transactions due to leveraging more on digital platforms. Net operating income for the period reflected 14 per cent YoY growth mainly due to the increments reported in net other operating income and the net interest income. However, despite the attractive growth reported in all major business lines, the Profit After Tax (PAT) reported a contraction of 9 per cent due to the impact of income tax expense which has grown by 38 per cent during the year, the bank said in a media statement.

While the bank recruited over 1,500 youngsters during the year, it has still been able to maintain its cost to income ratio at constant at 38 per cent compared to previous year reflecting the efficient cost management framework adopted by the bank.

The bank also had to absorb the impact of prolonged drought which prevailed in some part of the country. The slow phase of growth reported in services sector especially due to the significant contraction of construction segment has impacted the repayments and recoveries.

The income tax and the tax on financial services and dividend which constitute the bank’s value to the Government coffers amounted to Rs. 24.1 billion during the period under review.

Deposits recorded a YoY growth of 14 per cent reaching up to Rs.1.8 trillion as of the end of the year.

Russel Fonseka, Chief Financial Officer of the Bank highlighted that, the bank also continued to sustain the Capital Adequacy Ratio (CAR) by maintaining the total capital of 14.58 per cent level against the Central Bank’s minimum requirements of 12.875 per cent as of December 31, 2018, according to the BASEL III capital requirements.

Bank Chairman, Ronald C. Perera, PC, in a special statement appreciated the continued trust and the loyalty that has been placed on the bank by its valued customers which allows the bank to drive successfully across the strong winds occurred in the macro- economic front of the country as well as in the international markets.