Dip in People’s Bank profits due to impairment costs

People’s Bank has recorded a pre-tax profit of Rs.17 billion for the bank itself and Rs. 21 billion on a consolidated basis, for the nine months ending September 30, 2022,

The total operating income rose by 41.3 per cent to Rs.91 billion, whilst total operating expenses grew by only 9.6 per cent to Rs.31.4 billion reflecting prudent cost management amidst a highly challenging macro-economic environment characterised by, amongst other, an 80 per cent currency devaluation and primarily arising therefrom close to 70 per cent inflationary pressure.

Impairment charges rose significantly reflecting challenged macro level circumstances and the elevated level of risk across its key customer segments. Post tax profit was Rs.12.7 billion, dipping by 15.6 per cent over the same period in 2021.

Total deposits grew by 10.4 per cent to reach Rs.2,286.3 billion whilst net loans amounted to Rs.1,811.0 billion, contracting by a marginal 1.3 per cent.

Commenting on the results, the Chairman of People’s Bank, Sujeewa Rajapakse, stated that: “Irrespective of sector or nature of business, 2022 is not a year where performance is measured by top or bottom line but one of resilience, prudence, solvency without any regulatory forbearance and, more importantly, customer centricity in their time of dire need. During the last several years, People’s Bank has played a pivotal role by putting country first by supporting the internal eco system function without any disruption to the best of its abilities and has facilitated, amongst many other, bulk of the country’s imports relating to crude oil, coal, fertiliser, and essential medicine.”

CEO/General Manager Ranjith Kodituwakku, noted that: “With the economy set to contract this year, excluding the impact of the currency devaluation, most balance sheets are likely to contract. Whilst profitability is not the focal point, bolstering liquidity, strengthening capital, and bringing about productivity and efficiency enhancements in these difficult times through digital and other means are the key focus areas.”

The bank, Sri Lanka’s largest banking footprint, comprises 743 branches and service centres. With a history spanning 61 years, the bank benefits from a staff strength close to 7,500 serving over 14.5 million customers and over 19 million account relationships, which is by far the largest for any financial services provider in the country.