People’s Bank reports consolidated pre-tax profit of Rs.9.4bn

• Consolidated gross income expands by 34.5% to Rs.232.7bn
• Reports a total operating income of Rs.39.6bn on a bank solo basis and Rs.48.2bn on a consolidated basis
• Continues to benefit from industry’s lowest exposure to foreign currency-denominated investments, subject to external debt restructure
• Customer digital on-boarding continues to gain strong momentum

People’s Bank yesterday announced the results for the six-month period ended on June 30, 2023, reporting a total consolidated operating income and pre-tax profit amounting to Rs.48.2 billion and Rs.9.4 billion, respectively (1H -2022: Rs.80.7 billion and Rs.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 cost of term deposit funding, the consolidated net interest income slipped to Rs.31.4 billion during the six-month period ended on June 30, 2023, relative to the same period of 2022. The consolidated net fees and commission income amounted to Rs.7.9 billion, which excluding one-off items during 1H22, represented a near 6.0 percent growth on a like-for-like basis. 
People’s Bank
Reflecting inflation pushed cost pressures, much of which originated in the latter part of 1H22, the bank saw its consolidated total operating expenses rise by 12.98 percent to reach Rs.30.2 billion (1H22: Rs.26.7 billion). This compared relatively well with the peers, which in part, showcasing group efforts for greater cost control at every possible instance. 

Total consolidated customer deposits grew to reach Rs.2,565.4 billion – i.e., by 4.7 percent, whilst consolidated net loans contracted by 6.7 percent to Rs.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 group in credit growth, more so macro-circumstances considered. Total consolidated assets stood at Rs.3,047.5 billion at the end of the period (end-2022: Rs.3,133.1 billion). 
The bank’s Tier I and total capital adequacy ratios were 11.7 percent and 15.9 percent, respectively at June 30, 2023 (end-2022: 11.9 percent and 16.3 percent) whilst on a consolidated basis, it was 13.1 percent and 16.8 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 01, 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 group, People’s Bank Chairman Sujeewa Rajapakse stated, “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 the 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.”

Commenting on the results, the bank’s Chief Executive Officer/General Manager Clive Fonseka stated, “Throughout the first half of this year, we navigated through a difficult set of circumstances and have once again successfully proved our overall resolve and resilience in the face of extreme adversity. These ultimately attest to the success of our strategic initiatives and operational agility. Looking ahead, with an economic acceleration very much on the cards towards the latter part of this year and with interest rates likely to further head downward, we, as a responsible financial institution, have already taken measures to extend credit in all key economy critical business segments, particularly in the small and medium-scale enterprise and export-oriented spaces.