People’s Bank continues to maintain steadfast performance

• Reports PAT of Rs.12.7bn for the nine months on standalone basis and Rs.15.1bn on consolidated basis
• Maintains industry’s highest CAR of 15.6% on a bank solo basis
• Total assets and deposits increase by 14.4% and 10.4%, respectively
• Over 70% of all customer transactions now carried out digitally

People’s Bank yesterday announced the results for its nine months period ended September 30, 2022, 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 percent to reach Rs.91.0 billion, whilst total operating expenses grew by only 9.6 percent to Rs.31.4 billion reflecting prudent cost management amidst a challenging macro-economic environment characterised by, amongst other, an 80 percent currency devaluation and primarily arising therefrom close to 70 percent inflationary pressure. 

The bank’s cost to income ratio was 40.9 percent for 9 months period ended as compared with 52.3 percent during the same period 2021, reflecting both top line growth and controlled cost increases.  Net interest income grew by 12.7 percent to Rs.66.5 billion while interest expenses rose by 89.6 percent during the nine months 2022. 
As a result, net interest margins slipped to 3.12 percent from 3.27 percent in the same period of 2021. 

Fees & commission income grew by 128 percent to reach Rs.12.8 billion as compared with Rs.5.6 billion in the same period of 2021. Excluding extraordinary items, growth was close to 30 percent 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.

As a result, net interest margins slipped to 3.12 percent from 3.27 percent in the same period of 2021. 
Fees & commission income grew by 128 percent to reach Rs.12.8 billion as compared with Rs.5.6 billion in the same period of 2021. Excluding extraordinary items, growth was close to 30 percent 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 percent over the same period. Total deposits grew by 10.4 percent to reach Rs.2,286.3 billion whilst net loans amounted to Rs.1,811.0 billion, contracting by a marginal 1.3 percent. Total assets reached Rs.3,028.5 billion growing by 14.4 percent from end of 2021. The bank’s Tier I and Total Capital Adequacy Ratio was 11.2 percent and 15.6 percent, respectively on a bank solo basis (end 2021: 12.6 percent and 17.8 percent) while, on a consolidated basis, it was 12.4 percent and 16.3 percent, respectively (end 2021: 13.4 percent and 17.9 percent). 

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.

Commenting on the results, the 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. During the last several years, People’s Bank has played a pivotal role by putting country first by supporting the internal eco system function without any disruption to the best of its abilities and has facilitated, amongst many other,bulk of the country’s imports relating to crude oil, coal, fertilizer, and essential medicine.  We remain committed to serving the nation and are already in the process of implementing several additional measures to better equip the bank meet the increasing needs of its various stakeholders.”

The Chief Executive Officer/ General Manager of People’s Bank, 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. Whilst 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. 
Needless to say, whilst the process of recovery will be a long and arduous one and one which hinges on many moving parts, we remain optimistic that we are currently on the right path to recover. In all probability, the changes which have taken place, those currently taking place and, more importantly, those likely to take place will shape the country’s future for the better.