PB Group posts best financial performance in 2011
The People’s Bank Group created history by surpassing all previous records to post an exceptional PBT figure of Rs.21 billion in FY 2011 – the highest ever recorded in the banking industry to-date. This includes the PBT of Rs.15.3 billion recorded by People’s Bank - which delivered a phenomenal 75% growth over last year, thus emerging as one of the most profitable banks in Sri Lanka for the financial year 2011.
The bank experienced a substantial increase in its gross interest income which expanded by 10%, whilst its interest expenses increased only by 3.5% during the period under review. Stringent cost management initiatives and budgetary control enabled the bank to reduce its overall overheads by 4.5% over 2010. This, along with growth in fee-based income enabled PB to record a Profit After Tax (PAT) of Rs.10.2 billion - a remarkable 95% growth over the previous year’s figure of Rs.5.2 billion.
PB’S ability to maintain a healthy mix of loans and advances and investments enabled the bank to enhance its asset quality significantly during the year under review, recording a mammoth Rs.663 billion, which was an increase of 21% over the previous year. The favourable macro-economic conditions that prevailed during the year contributed positively towards this achievement. The healthy growth experienced in commercial and housing loans, pawning advances and state-owned enterprises inter-alia resulted in the expansion of total loans and advances to Rs.478 billion from the last year’s figure of Rs.372 billion which is a healthy increase of 29% over the previous year.
Directly influenced by the increase in rupee savings, the bank’s overall deposits rose to a formidable Rs.540 billion during the year under review, an increase of 16.8% over the previous year’s figure of Rs.462 billion.
The increasingly important contribution made by People’s Bank towards GOSL by way of taxes, levies and dividends is aptly reflected in the amount paid out during the year 2011, which stands at Rs.12.5 billion, an increase of 25% when compared to the Rs.9.9 billion paid out in the year 2010. This amount incidentally is the highest ever contribution made by any single bank to state coffers in the history of the banking industry.
Among the many noteworthy achievements during the year 2011, the bringing down of the NPL ratio from last year’s figure of 5% to 3.4% in FY 2011 can be singled-out as one of the key accomplishments that speaks volumes of the bank’s management strength, given the diverse and complex business environment state banks operates in. Of this amount, 48% has been classified as ‘old and hard-core loans’ for which the bank has made full provisions for.
Meanwhile, exceptional performance recorded by the bank during the FY 2011 received a further boost when both Fitch Ratings Lanka and RAM Ratings Lanka – upgraded/ sustained their ratings on People’s Bank, reflecting the positive sentiments shared by the financial community on the bank. Accordingly, Fitch Rating Lanka upgraded its rating on the bank from AA– (Positive) to AA (Stable) while RAM Ratings Lanka affirmed their AAA rating on the bank during the year, underpinning the confidence the bank has been able to instill through its strong financial fundamentals, sustainable business model and longterm growth prospects.