People’s Bank forges ahead with optimism; reports Rs. 11.4 b consolidated pre-tax profit for 9 months

•  Consolidated gross income expands by 24.5% to Rs. 345.2 b
•  Continues to benefit from the industry’s lowest exposure to foreign currency denominated investments subject to external debt restructuring
•  Solvency as measured by Total Capital Adequacy compares well with peers at 15.7%
•  New initiatives undertaken over the last several years are now yielding significant positive results. Amongst other, triples market share in inward worker remittances

Chairman Sujeewa Rajapakse (left) CEO/General Manager Clive Fonseka

People’s Bank yesterday announced the results for its nine-months period ended 30 September 2023, with total consolidated operating income and pre-tax profit was Rs. 67.6 billion and Rs. 11.4 billion, respectively.

Due to the higher cost of term deposit funding, which stemmed from the high interest rate environment which prevailed during much of 2022, consolidated net interest income slipped to Rs. 44.6 billion during the nine-months ended 30 September 2023. Consolidated net fees and commission income amounted to Rs. 10.8 billion which, excluding one off items during 9M-22, represented a near 9% growth on a like-for-like basis. Reflecting rupee depreciation and inflation driven cost pressures, much of which originated since Q2, consolidated total operating expenses rose by 14.7% to reach Rs. 45.9 billion. 

Relative to such upward cost pressures, this compared well, also reflecting bank and group wide efforts for greater cost control and efficiency improvement at every instance possible.

Total consolidated customers deposits grew to reach Rs. 2,652.6 billion - i.e., by 8.3%, whilst consolidated net loans contracted by 5.4% to Rs. 1,812.1 billion. This reflected both the impact of the rupee appreciation on its foreign currency loan-book relative to end 2022 levels and, more notably, the cautionary approach adopted by the bank when extending new credit considering the yet stressed macro-circumstances. Total consolidated assets stood at Rs. 3,131.7 billion as at 30 September 2023.

The Bank’s Tier I and Total Capital Adequacy Ratios were 11.6% and 15.7%, respectively as at 30 September 2023 whilst, on a consolidated basis, it was 13.1% and 16.8%, respectively. The Bank’s solvency levels continue to remain sound, ultimately showcasing efforts consistently made since the onset of Basel III on 1 July 2017. Further efforts to bolster its regulatory capital are currently ongoing. In addition, the bank has successfully met all its core regulatory measures during the said period including, amongst other, its liquidity ratios which reached new highs across both rupee and foreign currency.

People’s Bank Chairman Sujeewa Rajapakse said: “The country’s outlook currently hinges on the success of its external debt restructuring, fiscal consolidation and the success in implementing several key structural reforms. Despite the many uncertainties, both macro-economic and otherwise, our diversified portfolio and unique offerings have enabled us to positively contribute towards our overall performance during the first nine months of this year. One such example is our efforts to improve the overall foreign currency inward worker remittances for the benefit of the Bank and ultimately the country. Such initiatives rolled out since early 2022 has enabled the bank to increase its market share to 18% from just 6% at end 2022, which also testifies to the confidence placed in the institution by that remit.”

“Looking ahead, by combining technological advancement, risk mitigation, customer-centric initiatives and community engagement, we are confident that these strategies will help position our bank for success in the years ahead. Our goal is simple and is to be the most resilient and customer-centric financial services provider in the country with an enviable strength,” Rajapakse added.

Bank’s Chief Executive Officer/General Manager Clive Fonseka said: “We are making continuous strides in executing our operational plan notwithstanding the many challenges posed by the external environment. Our digitalisation strategy remains at the heart of every internal thinking and decision-making process. Substantial improvement in our liquidity profile during the year-to-date period is one of our key accomplishments and, with the economy showing positive signs of rejuvenation, we now remain focused on expanding our loan book in a measured manner. Needless to say, in doing so, as a responsible State organisation, we will focus on all areas of economic priority.”

“Despite the present obstacles, and not complacent with any of our successes, we remain focused on consistently and very diligently improving every aspect of the bank’s business, so the institution’s interest is preserved at all times, and it is well positioned for long term sustained growth and national value added,” said Fonseka.