Pan Asia Bank kicks off December earnings with modest performance

Aravinda Perera - Chairman

Naleen Edirisinghe - CEO

Kicking off the December quarter banking sector earnings, Pan Asia Banking Corporation PLC reported modest financial performance for the three months ended in December 2025 on the back of a strong credit growth in the economy.

The bank reported pre-impairment profits of Rs.3.96 billion for the three months, up 4 percent from the same period last year on the back of Rs.3.22 billion in net interest incomes and Rs.662.19 million in fee and commission incomes.

The net interest income slipped 4 percent between the two periods due to slippage in the net interest margin to 4.55 percent from 4.93 percent a year ago on the back of easing lending rates and yields of government securities.

While lending rates have eased, some loan products remain relatively high, and credit standards continue to be strict, with certain SMEs and individuals noting challenges in accessing funding. 

Additionally, banks are applying fees and commissions at multiple points, sometimes in ways that customers find unclear or excessive.

Reflecting how much these banks levy these fees, Pan Asia Bank reported a 34 percent jump in such fees from a year ago and for the full year. These fees rose 37 percent to Rs.2.52 billion.

The bank gave loans worth Rs.56.24 billion at a growth of 35.0 percent. Out of these loans, Rs. 13.97 billion came in the final quarter.

Year 2025 turned out to be the highest ever growth in loans for the bank in a year.

Meanwhile, the deposits grew by Rs.39.75 billion or by 20.8 percent.

Under this backdrop, the bank reported earnings of Rs.981.16 million or Rs.2.22 a share for the quarter, down 49 percent from the same period in 2024.

This was due to the one off provision reversals from International Sovereign Bonds (ISB) which the bank recognized in the comparable period last year.

In the December quarter in 2024, the bank charged back provision reversals worth Rs.5.44 billion. But this year, the bank provided Rs.23.59 million for possible bad loans.

Panicked investors sold off Pan Asia shares which closed 5.41 percent lower at Rs.59.50, becoming one of the leading contributors to the decline in the All-Share Price Index yesterday.

For the full year ended in December 2025, the bank reported earnings of Rs.9.05 a share or Rs.4.00 billion compared to Rs.9.34 a share or Rs.4.13 billion in 2024.