Pan Asia Bank posts steady performance in FY23

• Profit before Tax increases by 258% amidst continuing external challenges 

Pan Asia Banking Corporation PLC announced yesterday a steady performance in FY23 amidst multitude of adversities emerging from challenging macro-economic conditions.

The Bank showed judicious portfolio management and prudency exercised in dealing with possible fallout on its asset quality in challenging times. The Bank reported a pre-tax profit of Rs. 2,328 million for the year ended 31 December 2023, which is 258% increase compared to corresponding period last year, supported by improved net interest income, increased trading gains from government securities and reduced exchange losses. 

The Bank said the multiple economic scenario models used regarding collective impairment in 2022 were continued in 2023 to ensure that adequate buffers were in place to absorb any potential credit risk that could arise in the future. The allowance for overlays applied in previous year was continued and maintained during 2023 too. The Bank managed to end the year with healthy credit quality matrices due to improved credit underwriting standards and concerted collection and recovery efforts despite the contraction in the loan book during 2023 which impacted the Bank’s Stage 3 Loan Ratio adversely. 

Furthermore, the Bank increased impairment provision buffers held regarding investments in International Sovereign Bonds of Government of Sri Lanka (SLISBs) further during 2023 with the expectation of possible adverse outcomes of the on-going government External Debt Restructuring (EDR) program. The Bank recognised an impairment charge of nearly Rs. 2 billion regarding International Sovereign Bonds during 2023.

The interest income for the year 2023 rose by 39% due to the high interest rates that prevailed during the period under review compared to corresponding period of the last year and the re-pricing effect of facilities in response to the market conditions. Further, the growth in interest income was supported by the increased interest income from Rupee denominated securities of the Government of Sri Lanka 

(T-bills and bonds) due to increased investments and high interest rates offered on such new investments compared to the previous year. Consequently, the net interest income increased by 9% in 2023 compared to the last year.

The Bank reported a Profit after Tax (PAT) for the year of 2023 of Rs. 1,855 million having dropped by 7% compared 2022 since the prior year PAT was positively impacted by a one-off, sizeable, deferred tax reversal although the bank’s operating profitability marked a three-fold figure rise during 2023. The Bank reported an Earnings Per Share (EPS) for the year 2023 of Rs. 4.19. Further, the Board of Directors have proposed a first and final cash dividend of Rs. 0.25 per share.

The Bank reported a Net Interest Margin (NIM) of 4.67% for the year 2023 having fallen marginally.  Meanwhile, the Bank reported a Return on Equity (ROE) of 8.62% and a Pre-Tax Return on Assets (ROA) of 1.06% for the year under review. Meanwhile, the Bank’s Net Asset Value Per Share as of 31 December 2023 stood at Rs. 51.06 after an appreciation of 10%.

The Bank’s total assets experienced an increase of 12% In the meantime, Bank’s total customer deposits recorded a growth of 8% to reach Rs. 175 billion as of 31 December 2023. 

The Bank maintains all its capital and liquidity ratios well above the regulatory minimum standards. The Bank’s Tier 1 Capital Ratio and Total Capital Ratio as of 31 December 2023 stood at 16.45% and 18.52% respectively. Further, the Bank’s Leverage Ratio stood at 7.60% as of 31 December 2023. 

The total Bank level Statutory Liquid Assets Ratio (SLAR) as of 31 December 2023 stood at 38.55%. Meanwhile, the Bank’s Liquidity Coverage Ratio (LCR) under BASEL III stood well above the statutory minimums. The Bank maintained LCR of 458.18% and 520.84% in all currencies and rupees respectively.

Pan Asia Bank Director and CEO Naleen Edirisinghe said: “Our resounding performance for the year 2023 demonstrates that we are well on track to meet our ambitious targets post economic crisis. A growth in PBT of over 250% for year 2023 affirms the efficacy of our strategy which will be accelerated for generating greater earnings from core banking while infusing operational efficiencies. Despite challenging market conditions, Pan Asia Bank leveraged on its spirit of innovation and can-do spirit as one team to deliver this encouraging performance which sets the stage for the coming year.”

Recording consistent growth year after year, Pan Asia Bank said it is strongly positioned as the ‘Truly Sri Lankan Bank’, marking an illustrious journey that has promoted financial security and fulfilled the aspirations of its customers while supporting the prosperity of the nation.