People’s Bank reports highest ever balance sheet growth in 2020

• Extends over Rs.300bn in credit facilities - accounting for close to one third of total industry credit extended on net basis
• Offers COVID-19 relief to over 460,000 individual customers—the largest for any financial services group—and over 21,000 businesses
• Over 70% branches kept functioning even during peak of first lock down 
• Over Rs.1.0 trillion in transaction volumes executed through platforms including digital 
• Realigns bank’s strategic initiatives in line with govt. economic revival plan

People’s Bank yesterday announced the results for its year ended December 31, 2020 reporting consolidated net loan growth of Rs.315.7 billion, representing 21.6 percent growth year-on-year (YoY), and accounting for close to one third of overall net sector credit extended during the period.

Close to two third of credit was to the State and State-owned enterprises. 

Its consolidated assets reached Rs.2,400.6 billion up 17.1 percent from Rs.2,049.8 billion at end 2019 whilst its total deposits grew 21.8 percent to reach Rs.1,935.2 billion from Rs.1,588.9 billion at end 2019—all of which are institutional all-times highs. 

Of deposit growth, 53.8 percent stemmed from Current and Savings Accounts (CASA), ultimately showcasing the institutional brand strength and depositor confidence. 

From a COVID-19 moratorium perspective, the banking group extended relief to 460,000 retail customers—the largest for any financial services provider—and over 21,000 businesses.

Beneficiaries of such business relief included, amongst other, close to 10,500 three-wheel owners and 7,500 passenger transport service providers in addition to other small businesses. 
In addition, the group introduced multiple loan schemes at highly concessionary rates of interest. It extended over Rs.27 billion to revive small and medium scale enterprises (SMEs), including Rs.13.7 billion in Saubghaya loans and over Rs.10 billion to the agriculture sector. 

Over Rs.780 million in credit facilities were extended to also support university students, teachers, actors, musicians and other professionals including the promotion of women entrepreneurship—much of which during the latter half of 2020. 

In its effort to uplift the housing and construction sector, the bank also extended over 9,000 home loan facilities amounting to over Rs.105 billion much of it again during the last few months of 2020. 

All these however saw consolidated net interest income drop by 5.3 percent to Rs.74.4 billion, also reflecting consolidated moratorium interest concession of over Rs.5.0 billion.

Reflecting fee waivers, concessions and the drop in trade finance activities, consolidated net fee income amounted to Rs.7.3 billion, a 10.2 percent reduction from Rs.8.2 billion in 2019. Consolidated operating income reached Rs.90.8 billion—a 5.8 percent dip relative to Rs.96.5 billion in 2019. 

Consolidated impairment charges rose by 50.4 percent to Rs.17.6 billion with the group’s stage 3 loans representing 9.5 percent of its total loans at end 2020. Excluding SOEs, its gross non performing loans were 6.2 percent of total loans at end 2020.

Total consolidated operating expenses amounted to Rs.43.9 billion, a Rs.3.7 billion or 7.7 percent reduction compared with Rs.47.6 billion in 2019. This reflected group-wide reduction in non-discretionary spending. 

Total consolidated taxes and dividends to the government during the year amounted to Rs.16.8 billion compared to Rs.25.1 billion in 2019. Consolidated post-tax profit amounted to Rs.16.1 billion, down 0.5 percent from 2019. On a bank standalone basis, it was Rs.14.2 billion up 9.7 percent compared with Rs.12.9 billion in 2019.

The bank’s consolidated Tier I and Total capital adequacy was 10.7 percent and 15.6 percent respectively at end 2020 (end 2019: 11.6 percent and 14.9 percent). On a bank standalone basis, it was respectively - 9.5 percent and 15.5 percent (2019: 10.7 percent and 14.7 percent).

Commenting on the results of People’s Bank Chairman Sujeewa Rajapakse stated: “In a year of extraordinary challenges in an unseen like before operating environment, People’s Bank has not only pushed the boundaries of performance and delivery but also supported the government in its endeavors to preserve and protect the economy from further consequence and to help in its revival. Unlike in a typical year, our success in 2020 is not measured by a typical top line or bottom line but by our national value added and customer centricity which was at the heart of every decision making process. 

An ability to go above and beyond a time of need is what ultimately defines this institution and the individuals who run it. The above all said, our job is far from over. With the economy showing early signs of rejuvenation, and not complacent with any of our previous successes, we remain conscious of the challenges that still lie ahead but look forward to the future with a great degree of hope and optimism. 

“On behalf of the Board of Directors, I take this opportunity to extend our sincere appreciation to the President and the Prime Minister for their leadership and guidance, and to the Secretary to the President, the Secretary to Treasury and the Governor of Central Bank and their teams for their valued counsel at all times. Lastly, the Chief Executive Officer/General Manager for his exemplary leadership and employees at all levels for their admirable commitment without whom this would not be possible,” he continued.

People’s Bank Chief Executive Officer/ General Manager Ranjith Kodituwakku stated, “2020 was an out of the ordinary year on many fronts. Operationally, it was the year which put digital and technological capabilities of all institutions alike, and their contingency plans, to the ultimate litmus test. It was also the year which held customer centricity to account. 

“Our delivery on these many fronts remains best described in our ability to keep over 70 percent of branches open during even the peak of the lock down, an ability to be the first to facilitate credit relief to customers no sooner made known by the regulator and an ability to mobilize deposits and disburse loans in a time and manner previously undone.

In addition, the depth and breadth of People’s Bank’s operating and support service platforms considered, an ability to ensure over 99.0 percent uptime is maintained consistently without exception across all its platforms, an ability to process over Rs.1.0 trillion in transaction volumes including through digital speaks for the bank’s abilities and capabilities both human and technological.

“In addition, several measures were taken to ensure safety and stability of the institution such as reducing capital expenditures and focusing on lending to more priority/essential service sectors. Forming an integral part of such efforts, the bank also raised Rs.20.0 billion in Basel III, Tier 2 Debentures - which is the single largest issuance the country has seen by any financial institution to-date. I thank the Chairman and the Board of Directors for their leadership from the very front and my entire team for their efforts and unwavering commitment. We look forward to the future with optimism,” he added.