- Bank’s profit before tax exceed Rs 5.6 bn
- Capital funds reached Rs 16 bn
- Deposits grew by 8% to reach Rs 326 bn
- Net loans and advances grew by 9% to Rs 239 bn
- Total Assets reached Rs 400 bn
- Capital Adequacy ratio (under Basel II) reached 10% +
- Winner of the prestigious people’s awards for & Banking and Financial Services Brand of the Year 2008 for the third consecutive time and Service Brand of the year 2008
Date: 16th March 2009: “People’s Bank has shown continuous impressive performance, in profits and balance sheet growth over the past eight years. The Bank, completing 47 years of service to the people of Sri Lanka, has recorded an impressive performance in the year 2008 as well. “The Bank’s unaudited financials show profit before taxation and appropriations reaching its highest level of Rs 5.6 bn in the 2008 financial year, whilst profit before tax for the group surpassed Rs 7.2 bn. The Bank’s profit before taxation indicated a growth of 13.2% whilst profit after taxation recorded an impressive a 14% growth over the previous year.” said Mr. W. Karunajeewa, Chairman, People’s Bank.
“The Bank’s capital funds now amount to Rs 15.9 bn up from Rs 12.9 bn over the previous year. This was contributed by a capital injection of Rs 1.5 bn by the Government of Sri Lanka (GoSL) and substantial retained earnings, despite high taxation and returns to GoSL. It should be noted that People’s Bank’s contribution to GoSL by way of taxes and levies increased by 18.2% to reach Rs 7.4 bn compared to Rs 6.2 bn in 2007”, he added.
“The second phase of People’s Bank’s major restructuring drive, based on the Strategic Plan initiated in 2001 was completed in 2008, achieving outstanding success for the Bank. A key focus on the Bank’s Strategic Plan has been to create a customer centric and performance oriented culture,” said Mr. P. V. Pathirana, CEO/GM, People’s Bank. We have already formulated the next Strategic Plan for 2009-2014 and will be focusing on achieving the set goals and objectives in 2009 onwards.” he added.
Mr. Yohan Soza, Head of Finance explained that in the year 2008, net income of the Bank grew by Rs 2.4 bn, to Rs 18.9 bn a remarkable 15% rise compared with 2007. This was mainly due to timely pricing and repricing of our loan book, and despite the marginal growth recorded in our lending portfolio.
“As expected during inflationary times, the Bank’s overheads increased but moderately by 9% or Rs 1.4 bn to Rs 17.1 bn over Rs 15.7 bn in 2007. However, this increase was within internal budgetary levels. People’s Bank recorded a working profit of Rs. 7.3 bn, an improvement of Rs 1.4 bn over the 2007 recorded number. Provisioning as required by the Central Bank, was increased for another successive year. The 1% general provision on performing loans is expected to be met on schedule by 31 March 2009. Total general provisions (inclusive of pawning) amounted to Rs 577 mn, as against Rs 352 mn in 2007. The Bank’s specific provisions totalled Rs 965 mn in 2008, compared to Rs 470 mn in 2007”.
“Despite the above People’s Bank recorded a healthy profit before taxation of Rs 5.6 bn in 2008, as compared to Rs 5 bn in 2007” he further added.
The Bank’s IT platform now has 423 branches and savings centres linked for online transactions, with 240 ATM machines in strategic locations islandwide. The Bank has introduced palm top banking and necessary testing and ground work is already done to launch SMS and internet banking.
The restructuring strategies of the Bank have been change agents, creating catalytic changes in the culture and attitude towards granting of credit, customer service standards and credit recovery. As experienced by the banking industry, 2008 saw non performing loans (NPL) increasing materially over 2007. The Bank too recorded an expansion in NPL’s recording a ratio of 6.8% as compared to 5.9% in the previous year. However, this ratio is inclusive of old bad loans which the Bank has fully provided. People’s Bank’s NPL coverage ratio is 75% and is above banking industry standards.
During the year under review People’s Bank was recognized by the people as the inspiration behind their lives, winning the coveted `Banking and Financial Services Brand of the Year’ award for the third consecutive year and Service Brand of the year 2008 at the `People’s Awards’. This signified the Bank’s presence as a leader in the financial services sector,” stated Mr. Deepal Abeysekera, Head of Marketing and Public Affairs. “Venturing into its 48th year with a mission to care for and uplifting its customers, the Bank initiated series of activities to coincide with each calendar month to ensure that customers from all walks of life would be able to benefit from these initiatives.”
During the year, People’s Bank put in place short, medium to long term strategies that support the vision of the state for economic development of the country. ``Our strategies for development finance, was mainly concentrated on the development of micro, SME and agricultural sectors” stated Mr. P.V. Pathirana.
The Pawning business has grown to become an integral part of the financing cycle in agriculture, fisheries and other Micro and SME sectors. “Currently, People’s Bank is the market leader in pawning and the most preferred and sought-after pawning service in the country. Pawning is zero risk weighted and is capital efficient” stated Mr. P.V. Pathirana. He also added that currently this business yields good returns and is a major contributor to People’s Bank’s bottomline.
The Bank launched the People’s e-remittance, a real time remittance service, offering Sri Lankans living outside the country the ability to transfer funds to their beneficiaries in Sri Lanka.
During the year under review, a marked improvement in the levels of commitment for customer service, as well as competences of our human resources was evident. Supplementing this activities, 880 new freshers were recruited into the cadre, to replenish the number of retirees and to meet increasing customer demands.
People’s Bank currently has the widest network of 651 branches and savings centres, and boast of an asset base of Rs 400 bn with a deposit portfolio of Rs 326 bn. The Bank has a wide range of deposits and loan schemes to individuals, large and small enterprises. The Bank and its dedicated employees are planning to work with GoSL on resettlement, reconciliation and reconstruction of the North and East via its CSR initiatives and personal contribution and dedication of its employees.
“In 2009 and beyond, the Bank will continue to maintain its growth momentum through excellent customer service and relationship management whilst due attention and focus will be given to the new Strategic Plan 2009-2014. The Bank will continue to fulfill its original objectives of supporting and uplifting the needy segments of the economy and population, which is also in line with the state vision for Sri Lanka.” concluded Mr. W. Karunajeewa.
