BOC records Rs. 30.0 Billion Pre Tax Profit in 1 Q 2025 

  • Continues as the largest SME and development banking lending institution in the country
  • Futuristic and client-focused Business Revival and Rehabilitation Unit (BRRU) with industry leading practices
  • A milestone record Rs. 5.3 trillion total assets
  • Profit after Tax of Rs. 17.1 billion
  • Total deposit base of Rs. 4.5 trillion
  • Gross loans and advances at Rs. 2.4 trillion
  • 20.8 billion contributed to the Government as taxes

Left: Mr. Kavinda de Zoysa – Chairman BOC and in Right: Mr. W P Russel Fonseka- General Manager/ Chief Executive Officer- BOC

Bank of Ceylon (BOC), Sri Lanka’s premier financial institution, delivered a strong and resilient performance in the first quarter of 2025. Building on the momentum of 2024, the Bank maintained financial stability, demonstrated prudent risk management, and remained aligned with national economic priorities in an evolving macroeconomic environment.

The General Manager / Chief Executive Officer, Mr. Russel Fonseka commented that, “The strength and soundness of the banking sector are critical to sustaining confidence in the financial system. At Bank of Ceylon, we have prudently managed our liquidity and capital positions while consistently supporting vital sectors of the economy. Our financial performance for 1Q 2025, underpinned by a remarkable milestone of Rs. 5.3 trillion in total assets, reflects our resilience and unwavering commitment to growth. This achievement, alongside significant profitability gains, reinforces the Bank’s strategic focus and robust financial foundation. Looking ahead, we remain committed to expanding access, driving digital innovation, and reinforcing our leadership as Sri Lanka’s premier financial institution.”

Strong Financial Performance 

In 1Q 2025, the Bank recorded a Profit Before Tax (PBT) of Rs. 30.0 billion, marking a remarkable 222% increase compared to Rs. 9.3 billion in 1Q 2024, driven by robust growth in net interest income and enhanced operational efficiency. Profit After Tax (PAT) stood at Rs. 17.1 billion, reflecting the Bank’s sustained focus on profitability and prudent cost management.

Net interest income (NII) surged to Rs. 50.5 billion, representing a robust 95% year-on-year growth, driven by the Bank’s effective management of assets and liability pricing amidst a continued easing in policy rates. While interest income rose moderately by 12% YoY to Rs. 121.1 billion, reflecting the impact of the lower interest rate environment, a sharper 15% reduction in interest expenses to               Rs. 70.6 billion significantly enhanced net interest margin. This substantial improvement in NII underscores the Bank’s strategic agility and sound fund management, enabling it to deliver strong performance despite the prevailing low interest rate regime.

Net fee and commission income continued to support the Bank’s overall profitability in 1Q 2025, recording a 5% year-on-year increase to Rs. 5.2 billion. This growth was driven by higher transaction volumes in card services, retail banking, and remittance activities, alongside increasing customer engagement with digital banking platforms. The Bank’s ongoing digital transformation efforts and focus on delivering value-added services highlighted by the strong performance of BOC cards offering competitive rewards and discounts contributed to this steady performance.

Impairment charge for Loans and Advances and Other Financial Instruments

The Bank maintained its cautious and proactive approach to credit risk management amidst ongoing global and domestic economic challenges. An impairment charge of Rs. 2.9 billion was recognized on loans and advances, reflecting the continued stress in specific sectors. The Stage 3 loan ratio stood at 7.4%, while the Stage 3 provision coverage remained strong at 53.4%, underscoring the Bank’s prudent provisioning practices. Strategic overlays and close monitoring of credit exposures enabled timely risk mitigation, helping preserve financial stability. The Bank’s Business Revival and Rehabilitation Unit played a vital role in supporting operationally viable but financially distressed customers by conducting rigorous evaluations and facilitating access to necessary financing reinforcing the Bank’s commitment to economic recovery and long-term portfolio quality.

Operating Efficiency and Profitability

The Bank delivered a strong financial performance, reporting total operating income of Rs. 57.2 billion with an impressive 88% year-on-year increase driven primarily by substantial growth in net interest income and net fee and commission income. Operating expenses stood at Rs. 16.5 billion, reflecting a 13% increase compared to the corresponding period of prior year, largely attributable to a 17% rise in personnel costs. Despite the increase in expenses, the Bank continued to enhance operational efficiency, as evidenced by an improved cost-to-income ratio of 32.4%.

Operating profit before taxes on financial services reached to Rs. 37.9 billion, representing a remarkable 202% increase from the previous year. After accounting for Value Added Tax (VAT) and the Social Security Contribution Levy (SSCL), the Bank reported a Profit Before Tax (PBT) of            Rs. 30.0 billion, an outstanding 222% year-on-year growth, underscoring the Bank’s resilience and strategic execution amid a challenging environment. Income tax expenses for the quarter amounted to Rs. 12.9 billion, resulting in a Profit After Tax (PAT) of Rs. 17.1 billion. Total tax contributions, including direct and indirect taxes, amounted to Rs. 20.8 billion, reflecting the Bank’s significant role in supporting the national economy as a state-owned financial institution.

Financial Position

Reporting another milestone in the Bank’s journey as of 31 March 2025, BOC reported total assets of Rs. 5.3 trillion at the Bank level and Rs. 5.4 trillion at the Group level, reflecting a 7% growth from year-end 2024, driven by increased investments in debt instruments and securities under resale agreements. Despite a slight contraction in gross loans and advances to Rs. 2.4 trillion mainly due to the appreciation of the Sri Lankan Rupee and muted credit demand. The Bank’s deposit base grew by 6% to Rs. 4.5 trillion, highlighting strong customer confidence and effective deposit mobilization.

Key Performance Indicators

BOC continued to deliver strong profitability and operational efficiency in 1Q 2025, with Return on Assets (ROA) before tax improving to 2.33% from 2.28% in 2024, and Return on Equity (ROE) after tax remaining solid at 22.03%, reflecting consistent value generation for shareholders. The net interest margin increased to 3.92% from 3.57%, indicating effective management of interest-earning assets and liabilities. The Bank also sustained a strong capital position, with a Common Equity Tier 1 ratio of 11.66% and a Total Capital Ratio of 16.12%, both are well above the Basel III requirements. Liquidity coverage ratios stood at 315.00% for local currency and 283.05% for all currencies, reinforcing BOC’s robust liquidity profile and its ability to meet financial obligations even under stressed conditions.

Digital Transformation and Technological Advancements

In 1Q 2025, BOC continued to focus on enhancing its digital capabilities to improve customer service and operational efficiency. One of the key initiatives has been the integration of advanced digital platforms, including the launch of BOC Flex app. This app enables customers to manage their accounts seamlessly, access services, and perform transactions in real-time. Additionally, it supports the Bank’s strategy to offer more flexible, scalable, and user-friendly solutions. By incorporating flexible cloud-based technologies like in the Flex app, BOC is positioning itself to meet evolving customer expectations and remain competitive in the rapidly transforming banking sector.

Future Outlook

The Bank remains dedicated to upholding its high standards of excellence, advancing economic growth, and strengthening its role in promoting a resilient and stable financial system.

Bank of Ceylon Chairman, Mr. Kavinda de Zoysa, expressed, “As we continue to build on the strong foundation laid by the Bank, our focus remains on advancing our leadership in Sri Lanka’s banking sector. We are committed to delivering exceptional customer service, driving digital transformation, and ensuring prudent risk management and strong governance. A key priority is supporting small and medium enterprises (SMEs) including women, youth and tech entrepreneurs through careful credit analysis and structuring, innovative digital products and tailored loan solutions, empowering them to thrive in a digital economy. As we look to the future, we are committed to enhancing financial inclusion, expanding our digital offerings, promoting sustainable growth and fostering economic progress. Business revival continues to be a core focus, aimed at supporting both industry and our clients. We will continue to invest in our people to support our ambitious growth agenda for the future”

BOC maintains a robust domestic presence with a widespread network of over 2,300 direct customer touchpoints including fully-equipped and mobile branches, SME centers, ATMs, CDMs, and CRMs the Bank ensures comprehensive financial accessibility across all provinces of the country, reinforcing its commitment to financial inclusion. Internationally, the Bank extends its presence through branches in India, Maldives, and Seychelles, a limited-services branch in Hulhumale, and a fully-owned subsidiary in London, United Kingdom, further strengthening its global footprint.

Fitch Ratings has upgraded the National Long-Term Rating at ‘AA-(lka)’ and the Long Term Foreign and Local Currency Issuer Default Ratings at ‘CCC+’ .

With a proud legacy spanning over eight decades, Bank of Ceylon has evolved from a pioneering national bank into a dynamic and future-ready financial leader. Throughout its journey, BOC has stood as a pillar of strength during times of economic transformation, consistently delivering value, stability, and innovation to millions of Sri Lankans. Today, as the nation’s most trusted financial institution and Bankers to the nation, the Bank continues to redefine excellence by embracing digital advancement, championing financial inclusion, and supporting national development with unwavering commitment. Looking ahead, BOC remains focused on strengthening its capital base, enhancing risk management, and elevating the customer experience through technology and service excellence. Guided by its enduring values and forward-thinking vision, Bank of Ceylon is poised to shape the future of banking in Sri Lanka with confidence, responsibility, and a deep sense of purpose.