People’s Bank achieves Rs. 16.6bn PBT in 1Q26

Prof. Narada Fernando

Clive Fonseka

People’s Bank delivered a strong and resilient financial performance for the quarter ended 31 March 2026, maintaining stability amidst heightened geopolitical tensions and continued global economic uncertainty. The Bank recorded a standalone Profit Before Tax (PBT) of Rs. 16.6 billion during the period, reflecting the strength of its underlying fundamentals, prudent balance sheet management, and disciplined risk management practices.

The Bank’s operating performance was supported by continued growth across core income streams. Total operating income increased by 13.2 percent to Rs. 46.1 billion compared to Rs. 40.7 billion in the corresponding period of the previous year, while net interest income grew by 17.5 percent to Rs. 40.1 billion from Rs. 34.1 billion.

This performance was further supported by improved margin expansion, with the Net Interest Margin (NIM) increasing to 4.3 percent from 4.1 percent, driven by effective repricing strategies and disciplined asset-liability management.

The Bank’s balance sheet continued to demonstrate steady expansion and financial stability, with total assets reaching Rs. 3.8 trillion, customer deposits increasing to Rs. 3.3 trillion, and net loans and advances growing to Rs. 1.8 trillion. 

During the quarter, the Bank further strengthened its capital position through the successful completion of Sri Lanka’s largest Basel III compliant Tier 2 debenture issuance, raising Rs. 25.0 billion and reflecting strong investor confidence in the Bank’s long-term stability and financial strength.

This strengthened capital base contributed to a further improvement in the Bank’s Total Capital Adequacy Ratio, which increased to 17.9 percent from 16.5 percent recorded at the end of 2025, remaining comfortably above regulatory requirements. 

The Bank also maintained a robust liquidity position, with a Rupee Liquidity Coverage Ratio of 260.0 percent, underscoring its strong financial resilience.

Further strengthening the Bank’s financial profile, asset quality indicators continued to improve during the quarter. The impaired loans (Stage 3) ratio improved to 7.2 percent from 7.7 percent, while the Stage 3 provision coverage ratio strengthened to 50.0 percent from 48.4 percent, reflecting enhanced recovery efforts and prudent credit risk management. 

At Group level, People’s Bank continued its strong growth momentum during the quarter, supported by healthy core banking expansion and improved margin performance. The Group reported a Profit Before Tax of Rs. 20.0 billion compared to Rs. 17.7 billion in the corresponding period of the previous year, reflecting a 13.5 percent growth driven by improved operating performance and disciplined cost and risk management.

The Group’s balance sheet continued to expand steadily, with total assets reaching Rs. 4.2 trillion while net loans advanced to Rs. 2.1 trillion, reinforcing the Group’s strengthened scale and business growth across key segments. Net interest income increased significantly to Rs. 47.4 billion from Rs. 38.6 billion, recording a 22.9 percent growth supported by effective balance sheet repricing and sustained lending activity.

The Group also recorded an improvement in Net Interest Margin, which increased to 4.6 percent from 4.4 percent, reflecting efficient asset-liability management and improved yields on interest-earning assets. Overall, the Group maintained strong operational momentum and financial resilience during the quarter, further reinforcing its strategic position as one of the country’s leading financial institutions.

Commenting on the 1Q 2026 performance, Chairman Professor Narada Fernando noted that the results reflect People’s Bank’s continued resilience and stability during the quarter ended 31 March 2026, despite a challenging global environment marked by heightened geopolitical tensions and economic uncertainty. 

Chief Executive Officer/General Manager Clive Fonseka described the quarter’s performance as a strong demonstration of the Bank’s operational resilience and financial strength. He highlighted that the Bank’s strong core income generation, improving margins, enhanced asset quality indicators, and continued balance sheet expansion have further strengthened its financial position amidst evolving global and domestic challenges.