Sri Lanka’s state-owned People’s Bank 2018 profits up 3.5-pct
ECONOMYNEXT – Profits at Sri Lanka’s state-owned People’s Bank grew 3.5 percent from a year earlier to 20 billion rupees in the year to end December 2018 with widening interest margins and trading gains offsetting higher provisioning for bad debts, recently published financial results showed.
Earnings were 19,978 rupees a share for the year. The banking group which includes listed People’s Leasing and Finance PLC is fully owned by the government of Sri Lanka.
Net interest income increased 20.9 percent from a year earlier to 75.8 billion rupees with interest income growing 15.2 percent to 200.3 billion rupees and interest income growing a slower 12 percent to 124.5 billion rupees.
The bank reported an interest margin of 4.04 percent at end December 2018, up slightly from 4 percent a year ago.
Net fee and commission income rose 35.3 percent to 7.4 billion rupees while other operating income grew 5 percent to 6.8 billion rupees.
Trading gains rose 58.7 percent to 4.5 billion rupees.
Bad loans provisioning surged 228 percent from a year earlier to 9.4 billion rupees. Gross non-performing loans increased to 2.7 percent of total lending in 2018, up from 2.03 percent a year ago.
During the year, the bank expanded its loan book by 23.8 percent to 1.4 trillion rupees while its deposit base increased a slower 14.5 percent to 1.5 trillion rupees.
Personnel expenses grew 29.5 percent to 23.9 billion rupees.
The banking group employs 11,396 people, unchanged from a year earlier.
Income tax expense grew 3.3 percent to 9.7 billion rupees.
The bank’s total assets rose 17.9 percent to 1.9 trillion rupees at end-December 2018.
Return on assets fell to 18.69 percent in 2018, down from 21.41 percent a year earlier.
The bank’s book value, or shareholder funds, gained 18 percent in the year to 123.5 billion rupees.
Tier I capital adequacy ratio was 11.91 percent, up from the previous year’s 11.49 percent and above the regulatory minimum of 8.875 percent.
Total capital ratio was 14.80 percent, up from 13.71 percent from a year ago and above the regulatory minimum of 12.875 percent.
Outstanding guarantees issued by the bank amounted to 74 billion rupees at end December 2018, down from 74.2 billion rupees a year earlier. (COLOMBO, 29 March 2018-SB)