People’s Bank reports consolidated pre-tax profit of LKR 9.4 billion
People’s Bank today announced the results for its six months ended June 30, 2023 reporting total consolidated operating income and pre-tax profit amounting to LKR 48.2 billion and LKR 9.4 billion, respectively (1H -2022: LKR 80.7 billion and LKR 15.2 billion).
Due to higher interest costs; stemming from the high interest rate environment which prevailed during much of 2022 which led to higher of cost of term deposit funding, consolidated net interest income slipped to LKR 31.4 billion during the six-month period ended June 30, 2023 relative to the same period of 2022. Consolidated net fees & commission income amounted to LKR 7.9 billion which, excluding one off items during 1H-22, represented a near 6.0% growth on a like for like basis.
Reflecting inflation pushed cost pressures, much of which originated in the latter part of 1H-22, saw consolidated total operating expenses rise by 12.98% to reach LKR 30.2 billion (1H-22: LKR 26.7 billion). This compared relatively well with peers which, in part, showcasing Group efforts for greater cost control at every instance so reasonably possible and within its reasonable control.
Total consolidated customers deposits grew to reach LKR 2,565.4 billion – i.e., by 4.7%, whilst consolidated net loans contracted by 6.7% to LKR 1,788.0 billion. This primarily reflected the impact of the rupee appreciation on its foreign currency loan book and, to a notable extent, the cautionary approach taken by both the Bank and the Group in credit growth; more so macro-circumstances considered. Total consolidated assets stood at LKR 3,047.5 billion at period end (end 2022: LKR 3,133.1 billion).
The Bank’s Tier I and Total Capital Adequacy Ratios were 11.7% and 15.9%, respectively at June 30, 2023 (end 2022: 11.9% and 16.3%) whilst, on a consolidated basis, it was 13.1% and 16.8%, respectively (end 2022: 13.3% and 17.2%). The Bank’s solvency levels remain sound ultimately reflecting efforts made since the onset of Basel III on July 1, 2017. Further efforts to bolster its regulatory capital, including for the purposes of additional contingency, is currently in process. In addition, the Bank successfully met all core regulatory measures during the said period.
Commenting on the results of the Bank and the Group, the Chairman of People’s Bank, Mr. Sujeewa Rajapakse, stated that: “We are pleased with the results of the Bank amidst a complex set of challenges and a highly dynamic macroeconomic environment. Notwithstanding the many limiting factors, the Bank has, and will continue to, yield benefits of the many initiatives taken to strengthen the many aspects of the Bank’s business. Looking ahead, with macro level fundamentals showing signs of positive forward movement, our focus now remains in continuing to support Government in economy critical areas. Amongst other, promoting financial inclusion is, and always will be, our priority where we are working to expand access to financial services, particularly in underserved areas, through innovative approaches and digital solutions.
While challenges faced in the recent past have been unlike any seen in the past, the industry’s adaptability, resilience, and commitment has clearly been showcased. That said, whilst fully aware of the challenges yet ahead, we remain focused on creating sustainable value for the country we dearly love and our customers whom we caringly serve. Needless to say, our success is owed to the dedication of our team and the trust and confidence of our customers”
Commenting on the results, the Bank’s Chief Executive Officer/ General Manager Mr. Clive Fonseka, stated that: “Throughout the first half of this year, we navigated through a difficult set of circumstances and have once again successfully proved our overall resolve and resilience in the face of extreme adversity. These ultimately attest to the success of our strategic initiatives and operational agility. Looking ahead, with an economic acceleration very much on the cards towards the latter part of this year, and with interest rates likely to further head downward, we as a responsible Financial Institution have already taken measures to extend credit in all key economy critical business segments, particularly in the Small and Medium Scale Enterprise and Export oriented spaces.
Our central priority has and continues to be in improving our liquidity, forcing critical strategic initiatives, and continuing to vigorously focus on collections and recoveries.
As the financial landscape evolves, People’s Bank remains committed to adapting and innovating to serve our clients better. We look forward with optimism!”
Established under the People’s Bank Act No 29 of 1961, People’s Bank is the country’s second-largest financial services provider with over LKR 3.0 trillion in consolidated assets and over LKR 2.5 trillion consolidated deposits. At present, the Bank has 747 branches and service centres located island wide and over 14.7 million customers.
