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Operational gains impacted by lower forex profit; Capital Adequacy Ratio improves to 16.62%

 

The Commercial Bank of Ceylon PLC has posted profit before tax of Rs 3.23 billion on  gross income of Rs 16.77 billion for the three months ended 31^st March 2013, despite the challenges of reduced foreign exchange income and narrowing margins in the reporting period.

Releasing its first quarterly statement based on new Sri Lanka Accounting Standards (SLFRS) which are based on International Financial Reporting Standards (IFRS) for interim accounts, the Bank said foreign exchange income had declined by Rs 1.47 billion or 65% over the corresponding quarter of the previous year, due to the appreciation of the Sri Lanka Rupee against the US Dollar during the reporting period as against a depreciation during the corresponding quarter of the previous year.

Interest income improved by 24% to Rs 14.487 billion in the period under review, but interest expenses increased at a higher rate of 44% to Rs 8.874 billion, exerting pressure on interest margins, the Bank said. Consequently, the interest margin for the quarter declined to 4.34% from the 4.85% reported for 2012.

As a result of these factors, the Bank’s profit after tax of Rs 2.241 billion for the three months was lower by Rs 563 million over the first quarter of 2012.

"The Bank continued its trend of steady growth as reflected by the increase in deposits and interest earning assets as well as improved capital adequacy ratios and other key indicators,” Commercial Bank Chairman, Mr. Dinesh Weerakkody said.

 “The impact of lower translation gains and income from foreign currency operations on profit was anticipated following the strengthening of the Rupee commencing the latter part of 2012,” Commercial Bank’s Managing Director/CEO Mr. Ravi Dias said.

Total deposits of the Bank grew by Rs 13.570 billion over the three months since December 2012, surpassing Rs 400 billion to Rs 408.945 billion at 31^st March 2013, recording a growth of approximately 4%, while its interest earning assets too increased by the same percentage, growing by Rs 15.907 billion to Rs 389.451 billion at the end of the quarter reviewed. Total assets of the Bank increased by 4.91% to Rs 536.9 billion from Rs 511.7 billion at the end of 2012.

The Bank’s Tier I Capital Adequacy Ratio improved to 12.72% as at 31^st March 2013 from 12.64% at 31^st December 2012, while total capital adequacy (Tier I and Tier II) increased to 16.62% from 13.85%, largely due to a sum of US$ 75 million raised by the Bank from the International Finance Corporation (IFC) as a ten year Subordinated Term Debt that qualifies for Tier II Capital.

Commercial Bank’s Chief Financial Officer Mr. Nandika Buddhipala said the Bank had made a reversal of Rs 100.654 million in its individual impairment provisions in the quarter reviewed. This was mainly due to efforts of the Bank to recover part of such loans and also due to the reduction in the number of loans considered for individual impairment during the first quarter of 2013.

Collective impairment provisions had also reduced from Rs 1.258 billion in the first quarter of last year to Rs 610 million in the reviewed three months, largely due to a change in the mix of the loans subjected to collective impairment that was favourable to the Bank.  Consequent to this, the total impairment charges for the period was only Rs. 516.925 million which reflected a drop of Rs 514 million, or an improvement of 49.86% compared to the first quarter 2012.

Total expenses including personnel costs, depreciation, amortisation and other expenses for the three months was Rs 3.508 billion, an increase of 7.2%.

Taken as a Group, the Commercial Bank, its subsidiaries and associates posted pre-tax profits of Rs 3.255 billion for the quarter reviewed. Profit after tax for the three months was Rs 2.257 billion.

The largest private bank in Sri Lanka and the only Sri Lankan Bank to be listed two years consecutively in the world’s Top 1,000 Banks, Commercial Bank operates a network of 232 branches and service points in Sri Lanka and a network of 563 ATMs in Sri Lanka. The Bank also operates 18 outlets in Bangladesh. The Bank has been adjudged the Best Bank in Sri Lanka by Global Finance magazine for a record 15 consecutive years and has also won multiple awards as the country’s best bank from ‘The Banker,’ ‘FinanceAsia,’ ‘Euromoney’ and ‘Trade Finance’ magazines.

 

 

Seven hotels offering diverse experiences have joined Commercial Bank’s ‘Easy Vacation’ scheme, enabling the Bank’s credit card holders to enjoy substantial discounts in May and June this year.

Encompassing beach, hill country, heritage, rejuvenation or wildlife experiences, these hotels will offer Commercial Bank credit card holders between 30% and 35% off their total bills for stays on full or half board basis.

The seven participating hotels are Citrus Hikkaduwa, Fresco Water Villa Sigiriya, Grand Udawalawe Safari Resort, Oak Ray Tea Bush Ramboda, Pelwehera Village Resorts Dambulla, Siddhalepa Ayurveda Health Resort Wadduwa and Siddhalepa Transit Spa at BIA Katunayake.

The discounts will apply for stays paid for by Commercial Bank credit cards between 1^st May and 30^th June 2013. The total discount offered by Citrus Hikkaduwa will be 35%, while the six other hotels will offer total discounts of up to 30%, the Bank said. Up to two rooms may be booked on this basis.

This latest offer for Commercial Bank credit card holders comes hot on the heels of the Bank’s ‘Dine & Smile’ promotion that ran in February, March and April this year, with 23 popular participating restaurants offering discounts of 30% and 20%. The Bank also offered its Credit and Shopping Debit Cardholders discounts of up to 25% at 14 popular clothing and footwear retailers during the concluded ‘Avurudu’ shopping season.

Discounts of this nature significantly enhance the benefits already offered by Comdeals, a programme which provides value addition to Commercial Bank cardholders through discounts at a number of major retail outlets in the country and 0% easy payment schemes for Credit Cardholders. Commercial Bank Cardholders are also eligible to participate in global promotions carried out by Visa and MasterCard.

The largest private bank in Sri Lanka and the only Sri Lankan Bank to be listed two years consecutively in the world’s Top 1,000 Banks, Commercial Bank operates a network of 231 branches and service points in Sri Lanka and a network of 563 ATMs. The Bank has been adjudged the Best Bank in Sri Lanka by Global Finance magazine for a record 15 successive years and has also won multiple awards as the country’s best bank from ‘The Banker,’ ‘FinanceAsia,’ ‘Euromoney’ and ‘Trade Finance’ magazines.

 

The Commercial Bank of Ceylon has been adjudged the Most Productive Network in South Asia in 2012 for MoneyGram, the global funds transfer company. This is the second successive year that the Bank received this award, which was presented at MoneyGram’s Regional Conference in Jodhpur, India. Commercial Bank is one of the preferred networks for MoneyGram beneficiaries because of its network of 231 branches and service points in Sri Lanka. Funds can be collected even on holidays, at over 50 holiday banking centres of the Bank. In order to ensure a speedy pay out, the Bank has set up dedicated counters at some of its key locations popular for remittances.

Pictured here is Commercial Bank Assistant General Manager Operations Mr. Palitha Perera (extreme right) at the ceremony with MoneyGram Officials.

 

Partners Department of Wildlife Conservation to restore damaged coral bed at Hikkaduwa Marine National Park

A groundbreaking project to replant coral in the Hikkaduwa Marine National Park has been launched by the Department of Wildlife Conservation with funding from the Commercial Bank of Ceylon.

A first for the Department, the initiative envisages replanting an extent of 1,000 square feet in the Walduwa area of the marine park, using techniques perfected in the Philippines. The original coral in this protected area was damaged in 1998 due to the warming of the ocean due to the ‘El Niño’ southern oscillation and the tsunami of 2004.

The first phase of the project involves the production of concrete blocks of one square foot apiece with dead coral of five to six inches in height embedded on one surface. These blocks are then linked to one another and anchored to the seabed like floor tiles, creating a new coral bed in the area where the original coral was destroyed.

Once the sea water has adequately ‘cured’ the concrete blocks of toxins, live coral that has broken off naturally, will be collected from areas such as Mirissa, Matara and Unawatuna, transported under controlled conditions and affixed to the dead coral, creating a new layer of live coral that will continue to grow and attract and sustain marine life.

“This is a truly unique project that will promote biodiversity and help restore the beauty of the Hikkaduwa coral reef, which is a major tourist attraction,” said Mr. Jegan Durairatnam, Commercial Bank’s Chief Operating Officer. “The Bank was happy to adopt this project under its CSR agenda as it will bring many benefits to the area, and encourage more initiatives of this nature.”

The project also has symbolic significance to Commercial Bank because it coincides with the 30th anniversary of the Bank’s Hikkaduwa branch, he said.

Elaborating on the project, a spokesman for the Department of Wildlife Conservation said 700 concrete blocks would be used to create the new coral bed. Another 300 square feet of coral would be created by cementing dead coral to natural rock using a highly specialised gum. The live coral that is to be joined to the dead coral at the second stage of the project is of the Staghorn variety, which grows by two to three centimetres a year.

“With time, sand deposits will hide the concrete base of the new coral floor, and we are hopeful that a pristine bed of live coral will rise in this area, thanks to the generosity of the Commercial Bank,” the spokesman said.

This latest project supported by Commercial Bank brings even greater diversity to the Bank’s CSR portfolio, which is directed by the Commercial Bank CSR Trust with the overall objective of generating measurable and sustainable social dividends for different segments of society. The Bank has an ongoing flagship project to promote IT literacy among school children, under which it has donated fully-equipped computer labs to over 84 schools to date, benefitting more than 45,000 students.

Other CSR initiatives of the Bank include the annual presentation of scholarships and laptops to undergraduates, a national scale programme to provide English language education to rural students, projects that promote the preservation of cultural heritage, donation of health equipment to hospitals and regional projects.

The largest private bank in Sri Lanka and the only Sri Lankan Bank to be listed two years consecutively in the world’s Top 1,000 Banks, Commercial Bank operates a network of 231 branches and service points in Sri Lanka. The Bank has been adjudged the Best Bank in Sri Lanka by Global Finance magazine for a record 15 successive years and has also won multiple awards as the country’s best bank from ‘The Banker,’ ‘FinanceAsia,’ ‘Euromoney’ and ‘Trade Finance’ magazines.

Photo captions:

Hikkaduwa 1 - Officials of Commercial Bank and the Department of Wildlife Conservation after the unveiling of a hoarding near the project site

Hikkaduwa 2 - Commercial Bank's Chief Operating Officer Mr. Jegan Durairatnam (left) presents a 'coral tile' to Mr. H. D. Ratnayake, Director General of the Department of Wildlife Conservation

Hikkaduwa 3 - The 'coral tiles' that will line the sea bed

Hikkaduwa 4 - Commercial Bank's Chief Operating Officer Mr. Jegan Durairatnam (right) and Mr. H. D. Ratnayake, Director General of the Department of Wildlife Conservation exchange the agreement under which Commercial Bank will fund the coral replanting project

Contrary to what its name may suggest, the prospect of owning the all-new Mitsubishi Mirage will become a solid reality for leasing customers of the Commercial Bank, following a partnership between the Commercial Bank and United Motors to promote this highly efficient subcompact hatchback from the Japanese automaker.

A Memorandum of Understanding signed by the two companies paves the way for attractive discounts on the starting price of Rs 3.515 million for purchasers who obtain a lease from the Commercial Bank, in addition to competitive lease rentals with flexible payment options from Sri Lanka’s largest private bank.

Under this scheme, Commercial Bank will also offer specially formulated insurance packages from the Bank’s Bancassurance channels, and the convenience of ultra speedy service via its island-wide branch network.

The MOU was signed by Commercial Bank Chief Operating Officer Mr. Jegan Durairatnam and Mr. Gihan Pilapitiya, General Manager - New Vehicle Sales at United Motors, in the presence of senior officials of the two companies.

“This latest partnership between Commercial Bank and United Motors represents our continuing commitment to add tangible value to our leasing customers by enabling them to get the best vehicle deals possible,” said Mr. Durairatnam, Chief Operating Officer of Commercial Bank. “Besides the savings and the convenience offered through this promotion, buyers also have the advantage of being served by two leaders in their respective fields.”

A stylish five-door hatchback launched in Sri Lanka in February this year, the new Mitsubishi Mirage is fitted with a 1.2 litre three-cylinder engine that offers class-leading fuel efficiency. It is available in manual, automatic and premium automatic versions. All variants come with a CVT (Continuous Variable Timing) gear box that ensures smooth driving, push start keyless operating system, fully auto air conditioner and a Kenwood audio system with USB and iPod compatibility. Across the board safety features include a driver and passenger airbag system and automatic contracting front seat belts that operate in tandem with airbags during a collision. The Mirage is available in nine colours -- Lemonade Yellow Metallic, Pop Green Metallic, Eisen Grey Mica, Medium Blue Mica, Black Mica, Red Metallic, Cool Silver Metallic, White Pearl and White Solid.

The largest private bank in Sri Lanka and the only Sri Lankan Bank to be listed two years consecutively in the world’s Top 1,000 Banks, Commercial Bank is one of the leading leasing service providers in the country and is a member of the Leasing Association of Sri Lanka. The Bank provides leasing facilities for a range of assets of diverse values including machinery. Commercial Bank has been adjudged the Best Bank in Sri Lanka by Global Finance magazine for a record 15 successive years and has also won multiple awards as the country’s best bank from ‘The Banker,’ ‘FinanceAsia,’ ‘Euromoney’ and ‘Trade Finance’ magazines.

One of the oldest automobile companies in Sri Lanka, United Motors Lanka PLC has been in existence for over 66 years and has been ranked among the top 50 companies in Sri Lanka as well as among the top 100 most respected entities in the country.

Photo caption: 

Commercial Bank's Chief Operating Officer Mr. Jegan Durairatnam (fourth from right) exchanges the agreement with Mr. Gihan Pilapitiya, General Manager New Vehicle Sales of United Motors in the presence of corporate management of the two institutions.