Overview of the un-audited financial performance for the year 2020
- PBT for the year – Rs. 23.5 billion
- Gross Loans – a milestone reached – Rs. 2.1 trillion with 28% growth
- Deposit base – Rs. 2.5 trillion with 23% growth
- Additional Tier one qualified Bond – raised Rs. 15 billion
The year 2020 become an exceptional year devastating almost all the economies of the world and Sri Lanka being no exception has by now caught the second wave of the COVID – 19 pandemic. Among all these unexpected challenges, the Bank has reported Rs. 23.5 billion as Profit before Tax (PBT) for the year 2020 by moving forward with a stable performance while managing headwinds caused by low interest rates, higher NPA, cash flow deferments and operational restrictions. Profit After Tax (PAT) for the year ended is at Rs. 17.8 billion. Despite the interest rate reduction, new repayment arrangements easing the commitments of the customers and increase in interest expense in line with growth of the deposit base the net interest income of the Bank was reported at Rs.74.8 billion and it showed only a drop of 0.5% YoY. The non- fund-based income, which represented around 20% of the operating income of the Bank ended at Rs.18.6 billion with 15% growth. Even though, the main non- funded income source, net fee and commission income came down slightly by 1% to Rs. 12.0 billion due to disruptions in international trade which came with the pandemic. However, the Bank managed to keep the non-funded income at a favorable level with the exchange gain of Rs. 3.8 billion.
Due to the Bank’s prudent management approach, the operating cost of Rs. 33.1 billion was limited only to a 2% increase and cost to income ratio has also been maintained at an acceptable rate of 37%. Albeit the Bank had to set aside a notable level of impairment during the year 2020, the Bank’s operating profit before financial taxes stood at Rs. 29.0 billion. The impairment charge for the expected losses on the loan book was captured in the financials irrespective of the concessions given to customers by way of cash flow deferments and other relief packages. The Bank always maintains proper books of accounts by reflecting the potential risk it encounters in the expected loss assessment as per the SLFRS 09 and Rs. 31.2 billion has been charged to Profit or Loss in this regard. However, the Bank was able to manage the well-known assets quality indicator, NPA ratio at the same level of 4.8% by end December 2020 in comparison to the previous year.
Among all these challenges the Bank’s assets base grew by 24% to Rs. 2.9 trillion, backed by an increase of 28% in the loan book. Marking another milestone in BOC’s history, the Bank’s loan book went past the Rs. 2 trillion mark during the year 2020 and closed the year with Rs. 2.1 trillion gross loans and advances to customers. Both Government and private sector lending contributed to the growth reported during the year and working capital and personal lending showed a boost in line with credit facilities offered under “Diviudana” loan scheme, BoC Personal loans, Project financing under corporate lending, etc. By taking the lead in delivering the Government mandate for reviving the economic activities paused due to the pandemic, the Bank has disbursed more than Rs. 40 billion under the “Saubagya COVID -19 Renaissance Facility” by extending working capital to COVID-19 affected businesses.
The Bank’s deposit base which represents 24% of the industry has increased during this year too despite of the low interest rates that prevailed in the market. The Bank’s deposit base of Rs. 2.5 trillion represents 34.7% of Current and Saving deposit (CASA) base which generates funds at low cost. During 2020 the Bank successfully executed issuance of its first Additional Tier 1 (AT1) bond and under this Rs. 15.0 billion ATI capital was generated. The Bank’s before audit Tier I Capital and Total Capital ratio stood at 10.6% and 14.2% respectively by end 2020 which were above the regulatory norms. Despite of cash flow deferments in loan installments, the Bank was able to maintain better trade -off between the liquid assets and its liabilities. All liquid level monitoring ratios were well-kept-up. However, ROA and ROE of the Bank showed a declining trend in direct correlation to Profit and balance sheet growth.
Bank of Ceylon continues to be recognized locally and internationally and is the highest ranked local bank, among the Top 1000 Banks listed by the Banker Magazine UK for the year 2020. Locally the Bank was ranked among the Top 10 most Admired Companies of Sri Lanka by CIMA/ICCSL/ DailyFT. Also, Bank of Ceylon has continued to be ranked as the most valuable Banking Brand for the year for many consecutive years by the Brand Finance Lanka. BoC has 646 branches , 1,330 ATMs, CRMs and CDMs Island wide and a Credit Rating of AA- (lka) assigned by Fitch Ratings (SL).
This performance for the year was derived by converting challenges into opportunities during the year 2020 while fulfilling the duty of being Bankers to the Nation.