People’s Bank today announced the results for its six months period ended June 30, 2022 with total operating income rising by 54.9% to reach LKR 69.3 billion, whilst total operating expenses grew by 3.7% to LKR 20.8 billion reflecting sound cost control and efficiency improvements despite mounting inflationary pressures. Impairment charges rose by 319.9% to LKR 32.8 billion reflecting macro-economic stresses including those relating to its key customer segments. Pre-tax profit amounted to LKR 11.6 billion; representing a decline of 12.5% over the same period 2021.
Net interest income, which accounted for close to 75.0% of the Bank’s top line, grew by 30.5% to reach LKR 51.7 billion reflecting both asset growth and net interest margin improvements. Fee based income grew by 160.9% to reach LKR 9.8 billion; reflecting the Bank’s ongoing efforts to also improve its other non funded sources of income. From a cost to income perspective, primarily reflecting top line growth and cost control, the Bank’s cost to income ratio was 35.9% during H1-22 as compared with 53.0% during the same period 2021. Profit after tax was LKR 8.3 billion, dipping by 21.3% over the same period 2021.
Total deposits grew by 12.6% to reach LKR 2,332.8 billion whilst net loans amounted to LKR 1,812.2 billion; contracting by a marginal 1.3%. Reflecting elevated levels of risk across select key customer segments, the Bank’s stage 3 loans as a function of total gross loans increased to 10.4% from 4.0% at end 2021. Total assets reached LKR 3,007.3 billion growing by 13.6% from end 2021.
Tier I and Total Capital Adequacy on a Bank standalone basis was 10.4% and 15.0%, respectively (end 2021: 12.6% and 17.8%) whilst, on a consolidated basis, it was 11.6% and 15.6%, respectively (end 2021: 13.4% and 17.9%). This was without any reliefs or other exceptional considerations and compared well industry peers
Commenting on the results, the Chairman of People’s Bank, Mr. Sujeewa Rajapakse, stated that: “Despite extraordinary challenges from a macro front, the Bank’s results provide some insight into its capacity to navigate through these circumstances. Needless to say, similar to most others in the industry, limited access to foreign currency is its key source of distress. As a responsible Domestically Systematically Important Bank with a broader national role - the Bank played a leading role post COVID 19 to support the Government and the country’s internal eco system function without any interruption by facilitating, amongst other, bulk of the country’s essential imports including petroleum products. To ease pressure from foreign currency front, several measures are currently being explored in coordination and support of its key stakeholders. We remain committed to supporting the country’s economic revival initiatives at every instance so possible”
The Chief Executive Officer/ General Manager of People’s Bank, Mr. Ranjith Kodituwakku, stated that: “With pressures mounting from an interest margin and credit cost perspective, we have used the opportunity to also strengthen our platform from a business, operational and risk management perspective. As a Bank with national interest at heart, we have allocated greater resources to support Small and Medium Scale Enterprises and certain other economy critical market segments. Conscious of the challenges ahead, we remain fully committed to serving our customers and preserving the interest of all our stakeholders”
People’s Bank being recognized amongst the World’s Top 1000 Banks yet again is an extraordinary achievement admits present challenging environment. It accentuates its consistent and robust delivery even amidst adversity and attests to its standing not only locally but also globally.
People’s Bank is the country’s Premiere Licensed Commercial Bank with Sri Lanka’s largest banking footprint composed of 743 branches and service centers. With a history spanning 61 years, the Bank benefits from a staff strength over 7,500 who tirelessly and diligently serve close to 14.5 million customers and over 19.0 million account relationships, which is by far the largest for any financial services provider in the country.
Looking ahead, despite the many tests, People’s Bank remains focused on taking every reasonable measure necessary to support the Government in their efforts and to help the country’s internal eco system move forward