
Pan Asia Banking Corporation PLC reported a remarkable performance for the year 2021 to report a Pre-Tax Profit of Rs. 4,034 million and a Post-Tax Profit of Rs.3,075 million with growth rates of 42% and 50% respectively, while demonstrating the resilience amidst challenging macroeconomic conditions.
The Bank’s performance was characterised by strength and resilience, despite the heightened uncertainty due to the impact of the Covid-19 pandemic.
Against the backdrop of the pandemic impact on the Sri Lankan economy, the Bank’s Operating Profit before VAT on Financial Services reached Rs. 4,911 million an increase of 39%.
The Bank increased its provision buffers for loan losses during the year, sensibly taking into consideration increased risks and uncertainties due to the Covid-19 pandemic through management overlays.
Apart from above, the management increased the impairment provisions made on foreign currency exposures to the Government of Sri Lanka significantly by Rs. 719 million, taking into consideration elevation of default risk associated with the Sri Lankan sovereign as a result of downgrading the sovereign credit rating of Sri Lanka by international credit rating agencies. As a result of the above factors, the total impairment charge for 2021 increased by 49%.
Interest income accounted for 89.08% of the Bank’s gross revenue in 2021 despite interest income declining to Rs. 18.80 billion in 2021 from Rs. 18.82 billion recorded in 2020. The re-pricing effect of lending book responding to market conditions, as well as the continuation of regulatory directives on interest rate caps for certain lending products introduced during mid-2020, granting of new credit facilities and making of new investments at interest rates lower than in previous year hindered the interest income on loans and advances and other interest-earning assets during the year under consideration. This led to a reduction in the average interest yield by over 200 bps. Remarkable credit growth was achieved in all three segments, Retail, Corporate and SMEs, of Rs. 20 billion (approx.), which offset the pressure on interest income to a greater extent.
The Bank’s total assets base stood at Rs.189.51 billion as at December 31, 2021 after posting a growth of 7% (approx.) during the year supported by the expansion in the loan book. The Bank’s Gross Loans and Advances book recorded a growth of 15% (approx.) to reach Rs. 150.68 billion due to overall excellence in Corporate, Retail and SME segments.
The Bank’s MD and CEO, Nimal Tillekeratne said, “We are extremely proud and pleased to deliver such an excellent performance under the challenging conditions created by the Covid-19 pandemic.