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Sri Lanka’s Peoples Bank gives credit relief to 480,000 customers, new credit

ECONOMYNEXT – Sri Lanka’s state-run People’s Bank group said it had given relief to 480,000 customers amid a Coronavirus pandemic and had also given 27 billion rupees of new credit to small and medium enterprises in 2020.

The bank had given 9,000 home loan facilities of over 105 billion rupees in the last few months of 2020.

Peoples’ Bank group had extended 27 billion rupees to SMEs including 13.7 billion rupees of ‘Saubhagya’ central bank re-financed credit and 10 billion rupees to agriculture.

The bank had given credit relief to 460,000 retail customers and 21,000 businesses which it said was the largest in the industry.

Business customers included 10,500 three-wheeler owners, 7,500 passenger bus service providers.

Over 780 million rupees in credit were given to university students, teachers, actors, musicians, and other professionals including to promote women entrepreneurship, with most coming in the second half of 2020.

Consolidated net interest income had dropped 5.3 percent to 74.4 billion rupees with a 5 billion rupee moratorium interest rate concession.

With fee waivers, concessions and a drop in trade finance consolidated net fee income dropped 10.2 percent to 7.3 billion rupees from 8.2 billion rupees, the bank said.

But the bank had also cut costs 7.7 percent to 43.9 billion rupees.

Chairman Sujeewa Rajapakse said the bank had operated amid an extraordinarily challenging environment and had supported government efforts to cushion the economy from further shocks but the job was ‘far from over’.

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“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,” he said in a statement.

“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.”

Chief Executive Officer Ranjith Kodituwakku said the bank had used digital and physical platforms to provide services to customers in a difficult year.

Digital platforms had demonstrated 99 percent uptime and had processed over 1 trillion transactions.

“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 lockdown, 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,” he said.

Consolidated assets had reached 2,400 billion rupees up 17 percent. Deposits had grown 21 percent to 1,935 billion rupees with 53.8 percent of the growth coming from current and savings accounts.

Consolidated post-tax profit 16.1 billion rupees, down 0.5 percent from 2019. Standalone bank profits were up 9.7 percent to 14.2 billion rupees from 12.9 billion rupees.

Customer loans grew 21.6 percent or 315 billion rupees. Close to two-thirds of the credit was to the State and SOEs, the bank said.

Consolidated impairment charges rose by 50.4 percent to 17.6 billion rupees. Group stage 3 impaired loans were 9.5 percent of total loans by end 2020. Excluding State-Owned Enterprises, its gross non-performing loans were 6.2 percent of total loans, the bank said.

The bank had raised 20 billion rupees in Basle III compliant bonds to boost Tier 2 capital, which was the largest such issuance by a financial institution in Sri Lanka he said.

Consolidated Tier I capital adequacy was 10.7 percent up from 11.6 percent and total capital adequacy and 15.6 percent up from 14.9 percent. At standalone bank-level Tier I was 9.5 percent (from 10.7 percent in 2019) and Tier II, 15.5 percent (from 14.7 percent). (Colombo/Mar10/2021 – Update II)

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