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profitability for a year-end, since its inception in 1961.
Augmenting its balance sheet of Rs. 1 trillion, this year’s profit before tax inclined 67.2% to stand at Rs. 17,231 m, while profit after tax was pushed upwards by an impressive 89.9% displayed at Rs. 14,219 m.
The bank’s financial performance for 2014 is unequivocally impressive. Net interest income is posted at Rs. 30,118 m, while the net interest margin reached 3.1 %, despite the entire banking industry battling the downward pressure exerted on interest rates.
Gross interest income reached Rs. 84,480 m, compared to Rs. 110,441 m last year, primarily due to this decline in interest rates, coupled with the downsizing of the pawning portfolio. Interest expense stands at Rs. 54,362 m against last year’s Rs. 73,791 m, with the decrease attributed to the cascading impacts of declining interest rates and replacing of higher cost deposits with low cost saving deposits growth.
Observing the details of the impressive Rs. 1 t balance sheet, gross loans and advances reached Rs. 685,310 m by end 2014, indicating an incline of 0.6%.
With the permeating global gold crisis impacting the pawning industry significantly from 2013 onwards, the bank was prudent and instituted some dynamics to decrease its exposure which emerged at 16.6% in 2014 of the total gross loans, which in 2013 stood at a high of 28.9%.
Pawning balance reached Rs. 113,946 m, indicating a reduction of Rs. 83,183 m in comparison to last year. The bank focused emphatically on broadening its lending portfolio, heralding an increase to 87,026 m in lending to other customers.
With probably the country’s largest savings base now exceeding Rs. 318 b with increasing customer confidence, deposits reached Rs. 793,342 m, indicating a 4.1% improvement over 2013. This was due to the bank taking advantage of the low interest rate regime and aggressive marketing and promotional campaigns aimed at mobilising low cost deposits.
Having a commendable CASA ratio of 46.3%, the bank’s saving deposits grew by Rs. 62,967 m, although time deposits declined by Rs. 42,945 m. Advances to deposits ratio is detailed at 86.4% for end 2014.
Commenting on the ground-breaking results, Chairman Hemasiri Fernando said: “Possessing one of the largest customer bases in Sri Lanka of over 16 million, the bank has proven repeatedly that its unique brand of ‘banking by the people, for the people’ is the formula to its success. We also continue being the most accessible bank in Sri Lanka, possessing the widest branch network of 739 branches and in excess of 3,000 strong ATM network, the largest in the country. It is this accessibility and unrelenting focus on customer service excellence that has conferred the bank with continuous crowns as Service Brand of the Year and Banking Service Provider of the Year at the SLIM-Nielsen ‘People’s Awards’ for the eighth consecutive year.”
However, Fernando added that the bank must continue to foster its stringent compliance culture, as well as that unrelenting focus on ethics, transparency and accountability.
“We have earned a rating of AA+ by Fitch Rating, which proves that we are a stable and progressive bank. We have also showcased our leadership prowess in an intensely competitive banking environment with the results you are seeing today and also the continuous progressive initiatives the bank introduces to optimise performance and build sustainable relationships with our stakeholders.”
People’s Bank winning the Bank of the Year 2014 at the European Global Finance and Banking Awards, as well as Best Banking Group and Most Sustainable Bank Sri Lanka at the World Finance Banking Awards 2014 are the rewards reaped for this foresight.
CEO/General Manager N. Vasantha Kumar added: “Being a State-owned bank, we have an ingrained responsibility to ensure that our stakeholders’ trust and confidence is consistent, strong and enduring. This means, that our focus should not only centred on a quantitative sense, though important, as seen in our impressive results, but also in the qualitative dynamics we continue to infuse through the decisions we make. Whatever we do, the impact on our stakeholders must be positive.”
The Chairman, who has an ambitious yet achievable vision for People’s Bank, given its repeatedly-proven prowess at being a champion and leader, has earmarked the bank to be the ‘Most Digitalised Bank in Sri Lanka’.
“As we observe, both the country and the world is undergoing transformation and the bank has remained abreast of those transformations. We have showcased immense success in a quantitative sense, evidenced in the last few years by a consistent and robust growth in profits and turnover. It is time to grasp the opportunities emerging from the technological revolution and grow those figures much more significantly, which means a new mindset and a new culture has to be imbued. We will be using this technological revolution to our advantage and pushing innovation to new realms, optimising on them as the two key ingredients driving our map for success.”
