Pan Asia Bank kicks off March quarter earnings with a bang

Kicking off the March quarter banking sector earnings, Pan Asia Banking Corporation PLC reported robust financial performance and said they are seeing demand for loans picking up as

the economy is recovering and interest rates remain low.

Releasing its results shortly after market close last week, the mid-sized lender reported earnings of 82 cents a share or Rs.362.8 million for the January – March period, compared to 73 cents a share or Rs.323.5 million in the comparable period in 2023.
The bank’s share ended at Rs.24.00, down 10 cents last week.
The bank reported a net interest income of (the difference between what the bank earned from its loans and what it paid for deposits) Rs. 2.88 billion for the period, up 42 percent from the same period in 2023.

The net fee and commission income rose by 17 percent in the year to Rs.398.4 million.
The bank said much of this income was driven by the growth in loans and advances.
Sounding upbeat, the bank’s Chief Executive Officer, Naleen Edirisinghe said in an earnings release that the bank remains well poised to meet the demand for loans coming from lower interest rates and a recovering economy.

“Our resounding performance for the 1Q 2024 demonstrates that we are well on track to meet our ambitious targets post economic crisis”, he added.
The bank has re-opened their lending spigots to small businesses which until recently seemed too risky.
However, SMEs make most money to the banks through relatively higher rates and myriad fees they levy on them, some of which even the client is not aware of. 
The bank’s total outstanding loans and advances rose by Rs.6.5 billion in the quarter which translated into 4.64 percent. The bank ended the quarter with a loans and advances book of Rs.146.4 billion.

The bank raised deposits worth Rs.4.44 billion, marking a growth of 2.53 percent.
The bank reported a net interest margin of 4.91 percent by the end of March, slightly higher than 4.67 percent three months ago.
Its so-called Stage 3 loans, an accounting term used to identify the non-performing loans, were 4.10 percent, lower than 4.36 percent.
The bank continued to maintain the same impairment provision models just to make sure that they maintain adequate provisions against possible bad loans in the case of not so good economic conditions in future.