Phase two of People's Bank's (PB) restructuring drive in 2008 has paid off with PB recording Rs 2.7 billion profit for the year compared to Rs 2.3 billion for 2007, the bank said. "This is a 14% growth in profit. The second phase of PB's major restructuring process, based on the strategic plan initiated in 2001 was completed last year. A key focus of this plan has been to create a customer centric and performance oriented culture," P.V Pathirana, CEO/ General Manager PB told the media at the presentation of the bank's results.
He said PB's capital funds now amount to Rs. 15.9 billion over the previous year. "This was contributed by a capital injection of Rs. 1.5 billion by the government and substantial retained earnings, despite high taxation and returns to the government."
"PB's contribution to the government by way of taxes and levies increased by 18% to reach Rs. 7.3 billion compared to Rs. 6.2 billion in 2007," he added.
He said the restructuring strategies of PB 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. PB also showed an increase in NPLs recording a 6.8 % increase compared to 5.9% in 2007 but this ratio includes old bad loans which the bank has fully provided for. PB's NPL coverage ratio is 75.7% and is above banking industry standards," he noted.
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