Bank of Ceylon reports Rs. 40.3 billion profit in 2023

Bank of Ceylon (BOC) reported a Profit Before Tax (PBT) of Rs. 40.3 billion for the year ended 31st December 2023 demonstrating a strong and steady performance across various dimensions, including liquidity, capital, efficiency, profitability and asset quality despite prevailing global and local economic uncertainties.

In a competitive and challenging environment the bank was able to achieve its goals by having a professional and experienced team, which helped to turnaround under-performing business sectors, back into their operations generating profits through the business revival and rehabilitation strategies . This achievement showcases the Bank’s resilience and ability to navigate through challenging times while delivering positive financial results consistently by following the best practices in the banking industry and adopting in to novel technology

The Bank of Ceylon Chairman and President’s Counsel, Ronald C Perera stated that, “The Bank has successfully navigated all the headwinds during past few years and the immediate measures were taken strategically and ensured the Business Continuity and uninterrupted services to our valuable stakeholders. Managing the foreign currency shortage was a challenging task, particularly as being “Bankers to the Nation” we always act with a broader vision. We identified the criticality of uninterrupted energy supply for survival of the economy and social life. In this backdrop the Bank took all its efforts to facilitate foreign currency needs for importing energy and essential goods. Nevertheless, short-term strategies were carefully managed without compromising the Bank’s long-term strategic priorities, with a focus on strengthening the financial position”.

Fund Based & Non- Fund Based Income The Bank achieved a profit before tax of Rs. 40.3 billion, driven by a significant 15% increase in interest income. However, despite this growth, a sharp rise in interest expenses resulted due to lag effect in repricing the time deposits mobilized at higher rates. Accordingly, net interest income decreased by 28% YoY. Moreover, net fee and commission income experienced a growth of 8%, primarily due to increase in card transactions, improved remittance, and greater adoption of digital banking services in retail banking. The Bank experienced approximately a 49% increase in worker remittances, accompanied by a rise in the number of remittances.

Impairment Reversal for Loans and Advances and Other Financial Instruments

From the emerging of the economic turmoil the Bank implemented proactive measures to mitigate the credit risk by applying management overlays to identify risk-elevated industries, reassessing exposures to high-risk borrowers and implementing stringent monitoring mechanisms. Under Expected Credit Loss model the Bank provided considerable level of impairment provision in previous years and by beginning of the year 2023, the Bank had maintained provision coverage of 60% for stage 3 loans. As a testament to these efforts, the Bank witnessed a noteworthy net reversal of impairment provisions for loans and advances amounting to Rs. 2.7 billion during the year. This positive outcome was attributed to the synergy of various factors, including robust business revival activities, rigorous credit monitoring practice, and the favorable appreciation of the LKR against USD. (BOC)