28 March 2024 12:00 am Views - 155
Reflecting the high interest costs on term deposit funding, due to the high interest rate environment, which prevailed during 2022 and early 2023, the significant interest concessions extended to the customers for the ultimate benefit of the country saw the consolidated net interest income slip to Rs.67.8 billion during the year, from Rs.91.0 billion in the year prior.
However, the last quarter of the year showed a forward movement on this front, as its interest expense continues to normalise with the current interest rate environment. The consolidated net fees and commission income amounted to Rs.13.9 billion, reflecting a 11.0 percent growth over 2022, less extraordinary items during the said prior year.
Despite the inflation-pushed cost pressures, the total consolidated operating expenses rose by only 5.5 percent to reach Rs.62.2 billion (2022 Rs.59.0 billion), ultimately reflecting the stringent cost control and efficiency improvements, which compared well with the peers.
The total consolidated customers deposits and rupee loans grew by 12.0 percent and 1.4 percent, respectively, whilst its all-currency net loans contracted by 4.0 percent, reflecting both the appreciation of the rupee impact on its foreign currency loan book as well as the measured growth by both the bank and group in the first half of the year, considering the macroeconomic circumstances. The total consolidated assets stood at Rs.3,208.2 billion at the period end (end-2022: Rs.3,133.1 billion).
The bank’s Tier I and total capital adequacy ratios were 12.4 percent and 17.4 percent, respectively, at December 31, 2023 (end-2022: 11.9 percent and 16.3 percent) whilst on a consolidated basis, it was 13.7 percent and 18.2 percent, respectively (end-2022: 13.3 percent and
17.2 percent).
The bank’s solvency levels remain sound ultimately, reflecting the 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.
“Taking on some of these challenges head-on, we have navigated the first phase of the Domestic Debt Optimisation programme with great success, converted our rupee liquidity stresses to now an all-time high excess, further augmented our regulatory capital amidst limiting circumstances and drive super normal growth across all our overall digital platforms – all of which whilst continuing to place national interest and serving our customers at the heart of all our decision-making ahead of profitability,” People’s Bank Chairman Sujeewa Rajapakse said.
Reflecting similar sentiments, the bank’s Chief Executive Officer/General Manager Clive Fonseka said that People’s Bank would further its current path whilst also focusing on further streamlining the operations and enhancing efficiency across all parts of the business.