People’s Bank’s consolidated financial support extended during 2020 & 2021 crosses Rs.1tn

• Reports consolidated gross income of Rs.236.8bn and consolidated pre-tax profit of Rs.37.2bn
• Extends industry’s largest COVID-19 relief 
• Numerous credit products launched to support govt.’s economic revival initiatives
• Executes over Rs.1tn in digital transactions during 2021 
• Over 70% of customer transactions now digitally carried out 

Announcing the financial performance for the year ended December 31, 2021, People’s Bank said it reported a consolidated operating income of Rs.110.7 billion and total operating expenses amounted to Rs.50.5 billion, up 21.9 percent and 14.9 percent respectively over 2020. 

The consolidated pre-tax and post-tax profits amounted to Rs.37.2 billion and Rs.28.1 billion, representing 51.1 percent and 74.6 percent growth. On a bank standalone basis, the figures were Rs.30.4 billion and Rs.23.7 billion respectively, up 43.2 percent and 67.3 percent over 2020. 

Income growth primarily stemmed from net interest income, which accounted for close to 90.0 percent of total operating income and grew by 30.2 percent in line with the bank’s growth in its credit and investment portfolio, while its fee income grew by 23.4 percent to reach Rs.9.0 billion reflecting the bank’s efforts to improve its non-funded income sources. 

Expense growth mostly related to direct business growth. Relative to 2019, the bank’s cost to income ratio showed marked improvement at 51.1 percent in 2021 as compared with 54.3 percent in 2020 and 61.8 percent in 2019. The bank-wide impairment charges rose reflecting macro-economic stresses as seen throughout the industry. During the year, the bank invested in rural development, supported small and medium-sized enterprises (SMEs) and encouraged women entrepreneurship.  At end 2021, it extended over Rs.63.0 billion to SMEs through various loan initiatives, which included close to Rs.1.9 billion through its own scheme to help revive businesses across agriculture, information technology, logistics, manufacturing, tea and tourism. 

In conjunction with the Small Holder Agri-Business Partnership (SAP), the bank introduced a low-interest credit scheme for 5,000 farmers with an initial provision of Rs.1.0 billion. To support the production of local fertiliser, the bank introduced the Sarabhoomi loan scheme while to promote women entrepreneurship, it extended Rs.533.5 million. 

The bank also introduced additional loan schemes to assist self-employment in the agricultural and handicrafts spaces. To support the country’s investment in information technology, the bank committed Rs.6.0 billion of which Rs.750.0 million was already drawn down. 

From a personal loan perspective, in its effort to uplift the housing and construction sector, the bank granted over 10,000 home loan facilities amounting to over Rs.185.8 billion at end 2021. 

In addition, by end 2021, it had disbursed over Rs.5.5 billion to retired disabled officers of armed forces and over Rs.68.5 billion to government pensioners.  To assist artists and related professionals, the bank disbursed over Rs.550.0 million, while to assist university students and teachers, the bank designed laptop loan schemes through which a total of Rs.350.5 million was extended throughout the year. Medical students at state universities were similarly offered personal loan facilities.  Taking into consideration all the above, the bank’s consolidated loan book expanded by 12.1 percent to Rs.1,990 billion at end 2021.  The bank’s stage 3 loans were, however, at 4.3 percent (2020: 4.5 percent). In addition, the bank undertook approximately Rs.453.0 billion Treasury bond conversions during the said two-year period. Growth in its consolidated deposits was 12.1 percent amounting to Rs.2, 168.7 billion. 

The bank’s total consolidated taxes and dividends to the government totaled Rs.20.4 billion during 2021, representing a 25.1 percent growth over Rs.16.3 billion in 2020. Its Consolidated Tier I and Total Capital adequacy was 13.4 percent and 17.9 percent respectively at end 2021 (end 2020: 10.7 percent and 15.6 percent).  On a bank standalone basis, these were 12.6 percent and 17.8 percent respectively (2020: 9.5 percent and 15.5 percent); either of which does not constitute all-time highs but amongst the highest in the industry. All other regulatory ratios were all maintained well above the minimum requirement.  Commenting on the results, People’s Bank Chairman Sujeewa Rajapakse stated: “We are very pleased with the results of the bank more so as attained during unseen like earlier circumstances. As a service provider, the last two years have put our promise and our ability to deliver to the ultimate test. As a national institution, we don’t measure our success by a typical top line or bottom line but by our national value addition - with our results both from a quantitative and qualitative perspective self-attesting to our resilience in these difficult times and overall performance including, most notably, our productivity & efficiency. 

All the above said, our job is far from over. Not complacent with any of our successes, we remain focused and fully committed to the government’s economic revival plan. Mindful of the challenges which lie ahead, we look forward with a great degree of optimism.” 

He continued: “On behalf of the Board of Directors, I take the opportunity to thank the President, the Prime Minister and the Minister of Finance for their leadership in these difficult times. 

I also extend my gratitude to the Governor of Central Bank, the Secretary to the President and the Secretary to the Treasury for their support and guidance on all matters of a related nature. Importantly, to all our customers and all employees both present and former - thank you. The bank’s success is undoubtedly yours. Your continued trust and confidence in the institution has not only enabled us to serve the country in a manner previously unseen but also has helped us distinguish ourselves in the Banking & Financial Services space. The Chief Executive Officer/ General Manager of People’s Bank, Ranjith Kodituwakku stated: “If one thought 2020 was challenging, 2021 was at a different level. Operationally, it continued to test our commitment, our discipline, our resolve, our strength and, importantly, our technological capabilities. If anything, the pandemic has expedited all things touchless, all things remote and all things digital. So, we used 2021 to focus on our digital customer on-boarding efforts, introduce new solutions to help our customers, expand our overall digital footprint, enhance our brand value and forge new relationships, all of which ultimately led and will continue to lead to enhanced performance and delivery. Further improving our productivity and cost efficiency is a key aspect of our focus going forward, along with completing several measures already in progress to enhance the safety and stability of the institution.

He continued: “2022 will be a defining year; we look forward to it with resolve, hope and optimism. I take the opportunity to thank all our customers and other stakeholders including our service providers for their trust and confidence in us. We look forward to your continued support.