Sri Lanka’s BOC reports Rs. 106.9 billion profit in 2024
The Morning: The Bank of Ceylon (BOC), Sri Lanka’s No. 1 bank and highest-rated banking brand, achieved strong financial results in 2024, demonstrating resilience and adaptability. The bank recorded significant growth in key financial indicators, including total assets, deposits, and profitability, reaffirming its agility in navigating volatile market conditions and economic challenges.
General Manager/Chief Executive Officer, Russel Fonseka, commented, “Our robust financial results demonstrate our strength and stability in this challenging economic climate. Looking ahead, we are committed to expanding our services, pioneering digital banking solutions, and solidifying our leadership position in Sri Lanka’s banking sector.”
Reflecting its ability to adapt to market dynamics, BOC successfully repriced its assets and liabilities, leading to a momentous 84% increase in net interest income to Rs. 167.6 billion, compared to Rs. 91.2 billion in 2023.
The bank’s interest income declined by 12% year-on-year (YoY), primarily due to the relaxed monetary policy stance, which led to lower yields on loans and government securities compared to 2023. However, a 32% reduction in interest expenses outpaced the decline in income, resulting in net interest income growth, underscoring BOC’s improved profitability despite economic challenges.
Net fee and commission income remained a strong contributor to improved profitability, reaching Rs. 20.6 billion, reflecting a 17% YoY increase.
A net gain of Rs. 3.4 billion from trading was recorded for the year, highlighting the bank’s strong trading capabilities in capitalizing on market opportunities and generating capital gains, despite exchange losses due to LKR appreciation.
BOC proactively addressed heightened credit risks in specific industries through targeted management overlays, ensuring cautious credit risk management amidst global and domestic economic uncertainties. This strategic approach enabled close monitoring, timely risk mitigation, and sufficient provisioning for potential credit losses.
OSL take:
A strong and resilient banking sector is a prerequisite for a country on the path to becoming a regional hub. The impressive performance of the state-owned BOC after the country faced an economic crisis in 2022, indicates the strength and resilience of the bank as well as of the overall economy. With Sri Lanka presenting an expansion in business/investment opportunities covering all key economic sectors in-line with the country’s target of achieving regional hub status foreign businesses/investors could confidently explore the increasing opportunities to engage and set up business ventures in the country. The strong banking sector in Sri Lanka while being in a position to extend the required support for business ventures could also ensure good returns to foreign businesses/investors who do business with Sri Lanka. Setting up bases in Sri Lanka would provide quick and easy access for foreign businesses/investors to engage with other countries in the South Asian region using the preferential treatment enjoyed by Sri Lanka with them.
| Article Code : | VBS/AT/20250305/Z_2 |