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Monday June 3rd, 2024

Sri Lanka Commercial Bank June profits fall with higher interest costs, bad debt

ECONOMYNEXT – Profits at Commercial Bank of Ceylon Plc, Sri Lanka’s largest private lender fell 10.73 percent to 3.5 billion rupees in the June quarter from a year earlier, amid rising interest costs and bad debt provisioning, interim accounts showed

The group reported earnings of 3.36 rupees per share for the quarter. For the 6 months ending in June, earnings were 6.40 rupees per share on total profits of 6.5 billion rupees which fell 17.5 percent .

Commercial Bank closed 3.10 rupees down at 106 rupees on Thursday.

In the June quarter interest income grew 11.9 percent to 38.1 billion rupees, interest expenses grew at a faster 16 percent to 20.6 billion rupees and net interest income grew at a slower 5.5 percent to 12 billion rupees.

Interest cost grew as depositors converted savings into term deposits, the bank said in a statement.

 The central bank had brought price controls on deposit rates in May, resulting in deposit rates falling twice so far (May and July) by moving to longer term deposits as early as possible, customers can avoid some of the losses from price controls

Loan loss provisions rose 62 percent to 3.6 billion rupees. At bank level the gross non-performing loans ratio grew to 4.86 percent in June from 3.24 percent in December.

 “While we remain concerned at the need for higher provisioning every quarter for sectors that are under the pressure of debt servicing, we are confident that our strategic responses to the needs of the period will minimise the adverse impact on our performance,” chief executive S. Renganathan said.
 
Commercial Bank’s loan book book contracted 1.54 percent to 854 billion rupees in June 2019 from 861 billion rupees in December. Rupee overdrafts, term loans and trade financing products fell, the bank said. There was a rise in foreign currency loans.

The bond portfolio grew to 98.7 billion rupees in June from 89.3 billion rupees in December.

Deposits grew 4.30 percent to 1 trillion rupees.
 
Net fee and commission income fell 6.09 percent to 2.4 billion rupees.

Net gains from trading grew to 362.2 million rupees from a 1.4 billion rupee loss as Sri Lanka’s currency strengthened in 2019 from a crash in 2018.

The bank paid 591.9 million rupees in a new debt repayment levy in the June quarter.

The group’s net assets per share were 121.82 rupees, up from 118.13 rupees.
 
Tier 01 risk weighted capital ratio was at 12.467 percent in June from 11.338 percent six months earlier against a regulatory minimum of 10 percent. 

The total capital ratio was 16.578 percent, up from 15.603 percent against a minimum requirement of 14 percent.
 
Return on equity fell to 10.75 percent at end-June from 15.56 percent in December while return on assets fell to 1.53 percent from 2.09 percent. (Colombo/Aug17/2019)

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Water levels rising in Sri Lanka Kalu, Nilwala river basins: Irrigation Department

Sri Lanka Navy assisting in rescue operations (Pic courtesy SL Navy)

ECONOMYNEXT – Sri Lanka’s Irrigation Department has issued warnings that water levels in the Kalu and Nilwala river basins are rising and major flooding is possible due to the continuous rain. People living in close proximity are advised to take precautions.

“There is a high possibility of slowly increasing prevailing flood lowline areas of Kiriella, Millaniya, Ingiriya, Horana, Dodangoda, Bulathsinhala, Palinda Nuwara and Madurawala D/S divisions of Ratnapura and Kalutara Districts, up to next 48 hours,” it said issuing a warning.

“In addition, flood situation prevailing at upstream lowline areas of Ratnapura district will further be prevailing with a slight decrease.

“The residents and vehicle drivers running through those area are requested to pay high attention in this regard.

“Disaster Management Authorities are requested to take adequate precautions in this regard.”

The island is in the midst of south western monsoon.

DMC reported that 11,864 people belonging to 3,727 families have been affected due to the weather in Rathnapura, Kegalle, Kilinochchi, Jaffna, Mullaitivu, Kalutara, Gampaha, Colombo, Galle, Matara, Hambantota, Puttalam, Kurunegala, Kandy, Nuwara Eliya, Anuradhapura, Polonnaruwa, Badulla, Moneragala, and Trincomalee districts.

Meanwhile, the Meteorology Department stated that showers are expected on most parts of the island today.(Colombo/June3/2024)

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UNP gen secy defends call for postponing Sri Lanka poll, claims opposition silent

The UNP party headquarters in Pitakotte/EconomyNext

ECONOMYNEXT — United National Party (UNP) General Secretary Palitha Range Bandara has defended his call for postponing Sri Lanka’s presidential election by two years, claiming that his proposal was not undemocratic nor unconstitutional.

Speaking to reporters at the UNP headquarters Monday June 03 morning, Bandara also claimed that neither opposition leader Sajith Premadasa nor National People’s Power (NPP) leader Anura Kumara Dissanayake have spoken against his proposal.

“I have made no statement that’s undemocratic. My statement was in line with provisions of the constitution,” the former UNP parliamentarian said.

He quoted Section 86 of Chapter XIII of the constitution which says: “The President may, subject to the provisions of Article 85, submit to the People by Referendum any matter which in the opinion of the President is of national importance.”

Sections 87.1, 87.2 also elaborates on the matter and describes the parliament’s role, said Bandara.

“I spoke of a referendum and parliament’s duty. Neither of this is antidemocratic or unconstitutional. As per the constitution, priority should be given to ensuring people’s right to life,” he said.

“Some parties may be against what I proposed. They may criticse me. But what I ask them is to come to one position as political parties and make a statement on whether they’re ready to continue the ongoing economic programme,” he added.

Bandara claimed that, though thee has been much criticism of his proposal for a postponement of the presidential election, President Wickremesinghe’s rivals Premadasa and Dissanayake have yet to remark on the matter.

“I suggested that [Premadasa] make this proposal in parliament and for [Dissanayake] to second it. But I don’t see that either Premadasa nor Dissanayake is opposed to it. To date, I have not seen nor heard either of them utter a word against this. I believe they have no objection to my proposal which was made for the betterment of the country,” he said. (Colombo/Jun03/2024)

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300 of 100,000 trees in Colombo considered high risk: state minister

ECONOMYNEXT – Trees in Sri Lanka’s capital Colombo are being monitored by the municipal council, Army and Civil Defense Force as the severe weather conditions continue, State Minister for Defense Premitha Bandara Tennakoon said.

“Within the Colombo Municipal Council city limits, there are 100,000 trees. Of these, around 300 are considered high risk,” Tennakoon told reporters at a media conference to raise awareness about the current disaster management situation.

Not all trees required to be cut down he said. “We can trim some of the branches and retain them.”

The problem was that buildings in the vicinity of the tree had cut branches on one side, causing it to become unbalanced, the minister said.

New laws would be brought in so provincial/municipal institutions could strengthen enforcement of building codes.

“We don’t have a single institution that can issue a warning about a tree. Not one to tell us what trees can or cannot be planted near a road.

“Trees should be suitable for the area. Some trees have roots that spread and damage roads, buildings. When the roots can’t go deep, they tend to topple over.

“Now Environment Day is coming up, and anyone can go plant a tree by the road. We have to take a decision about this. We have to enforce laws strongly in future.” (Colombo/June3/2024)

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