Wednesday, September 28, 2022

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BOC continues resilience posting Profit Before Tax of Rs. 8 billion for 2Q-2022

The Bank of Ceylon has been able to report Rs. 21.8 billion of Profit Before Tax (PBT) during the first six months of the year amidst unprecedented challenges facing many headwinds due to never experienced turmoil in the economy,BOC chairman Kanchana Ratwatte said .

The net interest income of Rs. 80.8 billion was reported with 57% growth contributing 72% to total operating income of the Bank.

Interest income grew by 62% materializing the loans and investment growth reported in the previous year. Out of the total interest income of Rs. 197.5 billion, 67% was represented by the interest income from loans and advances and considerable contribution was delivered by income from Overdraft, Term loans and Retail loans.

The investment instruments which mainly comprises Government Treasury Bonds and Bills brought the major portion of interest income earned from the investment portfolio which stood at Rs. 63.8 billion..

Total net non-fund-based income of the Bank amounted to Rs. 31.5 billion. During the first six- month period ended 30 June 2022,.

Net fee and commission income of Rs. 7.8 billion was derived through the retail transactional level banking services and trade finance including card transactions and remittances.

Mark to market loss of Rs. 2.4 billion was resulted from the investment in unit trusts and equity shares due to adverse market price fluctuations.

Rs. 49.5 billion of impairment provision for loans and advances was charged to statement of income during the period.

The operating expenses of Rs. 21.5 billion consists of personnel costs, assets maintenance, deposit insurance and other overhead expenses. YoY increase of 14% has been reported in operating expenses due to increase in personnel expenses as the Bank ensures the safety and well-being of the employees in this trying times.

VAT on financial services which is charged based on the value addition made by the financial services has a direct relationship to the PBT and emoluments showed a marginal dip of 3%. Income tax expense for the period was accounted as Rs. 5.9 billion at an effective tax rate of 27%.

The Surcharge tax of Rs. 6.7 billion was deducted from the equity as per the Surcharge Tax Act No.14 of 2022 certified on 08th April 2022.

The Bank has already effected the payment of Rs. 3.4 billion for the 1st installment which was due on 20th April 2022 and the liability to pay the balance amount has been recognized under current tax liability as of end June 2022.

During the period the Bank’s total assets grew by 17% and reached Rs. 4.5 trillion, preserving its industry leadership.

The gross loans and advances showed a marginal growth of 7% during 1H-2022 and stood at Rs. 2.7 trillion due to low credit appetite in line with the sluggish movement in the economy. The lending to the private sector grew by 12% during the period and the Bank continued to extend its support towards business revival.

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