People’s Bank maintains steadfast performance | Sunday Observer

People’s Bank maintains steadfast performance

4 December, 2022

Reports profit after tax of Rs. 12.7 billion for the nine months ended September 30, 2022 on a standalone basis and Rs. 15.1 billion on a consolidated basis. People’s Bank released the results for its nine months period ended September 30, 2022 last week, recording pre-tax profit of Rs. 17.0 billion on a Bank solo and Rs. 21.0 billion consolidated basis.

The total operating income rose by 41.3% to reach Rs. 91.0 billion, while total operating expenses grew by only 9.6% to Rs. 31.4 billion reflecting prudent cost management amid a highly challenging macro-economic environment characterized by, amongst other, an 80.0% currency devaluation and primarily arising therefrom close to 70.0% inflationary pressure. The Bank’s cost to income ratio was 40.9% for 9 months period ended as compared with 52.3% during the same period 2021, reflecting both top line growth and controlled cost increases.

Net interest income grew by 12.7% to reach Rs. 66.5 billion whilst interest expenses rose by 89.6% during the nine months 2022. As a result, net interest margins slipped to 3.12% from 3.27% in the same period 2021. Fees and commission income grew by 128.0% to reach Rs. 12.8 billion as compared with Rs. 5.6 billion in the same period 2021. Excluding extraordinary items, growth was close to 30.0%, reflecting the Bank’s ongoing effort to improve its non-funded sources of income, more so in a highly volatile interest rate environment. Impairment charges rose significantly reflecting challenged macro level circumstances and the elevated level of risk across its key customer segments. Post tax profit was Rs. 12.7 billion, dipping by 15.6% over the same period 2021. Total deposits grew by 10.4% to reach Rs. 2,286.3 billion whilst net loans amounted to Rs. 1,811.0 billion, contracting by a marginal 1.3%. Total assets reached Rs. 3,028.5 billion growing by 14.4% from end 2021.

The Bank’s Tier I and Total Capital Adequacy Ratio was 11.2% and 15.6%, respectively on a Bank solo basis (end 2021: 12.6% and 17.8%) whilst, on a consolidated basis, it was 12.4% and 16.3%, (end 2021: 13.4% and 17.9%). The Bank’s solvency reflected its efforts to augment its regulatory capital since the roll out of Basel III on July 1, 2017 with further efforts in this connection ongoing. Chairman of People’s Bank, Sujeewa Rajapakse said, “All factors and circumstances considered, we are pleased with the Bank’s results.

Irrespective of sector or nature of business, 2022 is not a year where performance is measured by top or bottom line but one of resilience, prudence, solvency without any regulatory forbearance and, more importantly, customer centricity in their time of dire need.” CEO Ranjith Kodituwakku said, “With the economy set to contract this year, excluding the impact of the currency devaluation, most balance sheets are likely to contract. While profitability is not the focal point, bolstering liquidity, strengthening capital, and bringing about productivity and efficiency enhancements in these difficult times through digital and other means are the key focus areas.”