People’s Bank Group posts record results in 2016

• Pre-tax profit up 5.4% to Rs. 25.4 b; After-tax profit rises by 19% to Rs. 18 b
• Gross income up 17% to Rs. 144.7 b
• Two Rs. 1 trillion achievements – first for any Sri Lankan bank in one year

People’s Bank yesterday announced an impressive financial performance for the FY 2016, with all Key Performance Indicators showcasing a striking upward trajectory in the group’s performance.  

The group posted a PBT of Rs. 25.4 billion, an increase of 5.4% which provides an example of the group’s unwavering commitment to broaden its vision, action and impact. The 19.2% growth seen in a PAT of Rs. 18 billion, increasing from Rs. 15.1 billion, further reiterates this promise. 

Etching one of the many milestones it had this year, total gross income reached a record performance of Rs. 144.7 billion, a 16.9% growth compared to the Rs. 123.8 billion recorded at end 2015. Net surpluses were evident across all aspects of investment operations with revaluation and available for sale reserves posting Rs. 11.9 billion and Rs. 0.3 billion respectively.  

The group’s Return on Average Equity was 22.7% compared to last year’s 22%, while the total contribution via taxation, special levies and dividends reflects the integral role the group plays in national economic development, with its Rs. 22.9 billion contribution once again considerably higher than last year’s Rs. 19.5 billion.People’s Bank Group Chairman Hemasiri Fernando said that the group’s results demonstrated its journey within the fast-evolving financial services industry, maintaining an insistent focus on every stakeholder.  

“Our results are self-attesting to an unrelenting pursuit to add consistent value for the benefit of all our stakeholders. Needless to say, the market circumstances in 2016 were challenging and from a macroeconomic standpoint these included inflationary pressures and a tightening monetary policy which led to a rise in interest rates and high earnings pressure.”  

The bank, which has won multiple awards both locally and globally, holds the distinction of being the 387th-largest bank in Asia as per the Asian Banker magazine. People’s Bank’s Return on Equity stands among the top 20 in the region, while another benchmark it set this year was the 27.5% Return on Average Equity, which in 2015 was 27.1%.  

“Our successes are ultimately owed to our customers for their trust and confidence in our efforts, our regulators for their support and wise counsel and importantly our employees, who consciously and very diligently push the boundaries of success and performance even amidst challenging circumstances,” Fernando opined.  

This customer loyalty is well-reflected in the Rs. 1.1 trillion in customer deposits, representing a 20% growth over the end of 2015’s Rs. 932.9 billion, certainly one of the highest in the country. Similarly, customer advances too touched the Rs. 1 trillion mark, with a 16.6% growth over last year’s Rs. 869.8 billion at a group level

Opining that 2016 has been a year of new highs for the bank, CEO/General Manager Vasantha Kumar said: “It’s been one of continuous positive improvement across several aspects of business operations both quantitative and qualitative. It was a year that witnessed two Rs. 1 trillion feats in a single year - the first for any bank, gross income generating capability crossing the Rs. 140 billion mark, loan book composition further improved and the gross non-performing loan ratio reaching a ten-year low - the latter providing evidence of a further improved risk management framework and collection and recovery process.”  

This is well evidenced in the ten-year low Gross NPL ratio of 1.9% (which in 2015 was 2.4%), highlighting the hallmark consistency that People’s Bank has continued to espouse and also a total asset base of Rs. 1.4 trillion, which is an 11.6% growth over Rs.  1.3 trillion at end 2015.  

In analysing the group’s Capital Adequacy Ratio of 13% with a Tier I ratio or 11.1% and the bank’s CAR of 12.1% and 9.8% respectively, Fernando clarifies that “in terms of near-term goals, bolstering our regulatory capital levels remains a priority and a work in process. Ongoing discussions with the Ministry of Public Enterprise Development and the recent Cabinet approval received to amend the People’s Bank Act are viewed very positively in this connection.” 

Kumar adds that the corporate plan of 2016-2020 forms an integral facet to this success with several new initiatives propelling the bank towards a new era of performance and delivery capabilities.  “Core to them all is digitisation,” he says of the digitisation process that began in 2015 and is well on target to be fully-operational by end 2017.  

“Backed by technology of global repute and a team unlike any other, this will put us on par with international counterparts in terms of our customer convenience offerings. Not complacent with our successes and conscious of the challenges that may lie ahead, we look to the future with a great degree of optimism.”

A full set of financial statements can be accessed at www.peoplesbank.lk.