People’s Bank reports consolidated pre-tax profit of LKR 9.4 billion

People’s Bank today announced the results for its six months ended June 30, 2023 reporting total consolidated operating income and pre-tax profit amounting to LKR 48.2 billion and LKR 9.4 billion, respectively (1H -2022: LKR 80.7 billion and LKR 15.2 billion).

Due to higher interest costs; stemming from the high interest rate environment which prevailed during much of 2022 which led to higher of cost of term deposit funding, consolidated net interest income slipped to LKR 31.4 billion during the six-month period ended June 30, 2023 relative to the same period of 2022. Consolidated net fees & commission income amounted to LKR 7.9 billion which, excluding one off items during 1H-22, represented a near 6.0% growth on a like for like basis.

Reflecting inflation pushed cost pressures, much of which originated in the latter part of 1H-22, saw consolidated total operating expenses rise by 12.98% to reach LKR 30.2 billion (1H-22: LKR 26.7 billion). This compared relatively well with peers which, in part, showcasing Group efforts for greater cost control at every instance so reasonably possible and within its reasonable control.

Total consolidated customers deposits grew to reach LKR 2,565.4 billion – i.e., by 4.7%, whilst consolidated net loans contracted by 6.7% to LKR 1,788.0 billion. This primarily reflected the impact of the rupee appreciation on its foreign currency loan book and, to a notable extent, the cautionary approach taken by both the Bank and the Group in credit growth; more so macro-circumstances considered. Total consolidated assets stood at LKR 3,047.5 billion at period end (end 2022: LKR 3,133.1 billion).

The Bank’s Tier I and Total Capital Adequacy Ratios were 11.7% and 15.9%, respectively at June 30, 2023 (end 2022: 11.9% and 16.3%) whilst, on a consolidated basis, it was 13.1% and 16.8%, respectively (end 2022: 13.3% and 17.2%). The Bank’s solvency levels remain sound ultimately reflecting efforts made since the onset of Basel III on July 1, 2017. Further efforts to bolster its regulatory capital, including for the purposes of additional contingency, is currently in process. In addition, the Bank successfully met all core regulatory measures during the said period.

Commenting on the results of the Bank and the Group, the Chairman of People’s Bank, Mr. Sujeewa Rajapakse, stated that: “We are pleased with the results of the Bank amidst a complex set of challenges and a highly dynamic macroeconomic environment. Notwithstanding the many limiting factors, the Bank has, and will continue to, yield benefits of the many initiatives taken to strengthen the many aspects of the Bank’s business. Looking ahead, with macro level fundamentals showing signs of positive forward movement, our focus now remains in continuing to support Government in economy critical areas. Amongst other, promoting financial inclusion is, and always will be, our priority where we are working to expand access to financial services, particularly in underserved areas, through innovative approaches and digital solutions.