Sri Lanka’s Commercial Bank net up 32-pct in September quarter, credit grows
ECONOMYNEXT – Sri Lanka’s Commercial Bank of Ceylon, which also has a unit in Bangladesh reported profits of 16.59 billion rupees, up 32 percent from a year amid with credit growing 25 percent over the six months.
Commercial Bank reported earnings of 10.18 rupees for the quarter. In the nine months to September earnings were 29.05 rupees per share on total profits of 47.3 billion rupees, up 52 percent.
Interest income grew 10.3 percent to 74.8 billion rupees, interest expense grew 7.23 percent to 40.2 billion rupees and net interest income grew at a faster 14.2 percent to 34.6 billion rupees.
Net interest margin improved to 4.53 percent to 4.27 percent. Return on equity fell to 21.03 percent from 22.06 percent.
Sri Lanka is prone to currency crises due to suppression of rates with inflationary open market operations, which are then followed by stabilization crises and bad loans, requiring margins to absorb losses.
After the end of a civil war, a series of Groundhog Day style currency crises from from aggressive ‘macro-economic policy’ for potential output targeting and also high inflation (flexible inflation targeting), eventually ended in sovereign default.
Sri Lanka’s nominal interest rates are also high due to destruction of capital through inflation, which is generally seen in depreciation, analysts have pointed out.
Net fee and commission income grew 25 percent to 7.4 billion rupees.
There were trading gains of 2.1 billion rupees up from a loss of 144 million a year earlier, unspecified other income of 3.1 billion rupees.
In the September 2025 quarter, the rupee continued to depreciate, which adds profits to banks with net foreign exchange assets.
Analysts had blamed exchange rate policy – buying dollars beyond deflationary policy and not returning them to note holders when import came – for the depreciation.
Commercial Bank had provided 2.1 billion rupees for bad loans, up from 1.0 billion last year.
Loans grew 25 percent or 381 billion rupees to 1,740 billion from December to September.
“Our commitment to lending remains undiminished, because we believe that our capacity to support national economic growth targets must be fully leveraged within prudential limits,” Commercial Bank Chairman Sharhan Muhseen said in a statement.
“The group’s performance reflects the impacts of this approach, and we expect similar strong growth in the final quarter of the year, in line with the trajectory of economic and business recovery.”
Debt and other instruments were barely up 3.7 percent to 692.6 billion rupees, and was down from the June level of 711 billion rupees.
Sri Lanka’s government has raised taxes and also re-opened vehicle imports after the last currency crisis which ended in default reducing the need to borrow.
Deposits grew 269 billion rupees or 12.5 percent to 2,505 billion rupees, helping finance loans.
Commercial Bank’s gross group asset grew 12 percent to 3,125 billion rupees. Net assets grew 12.58 percent to 309 billion rupees.
Tier 1 capital adequacy fell to 13.3 percent in September from 14.2 percent in December amid strong credit growth. Total capital adequacy fell to 17.2 percent to 18.1 percent. (Colombo/Nov12/2025)
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