Profits drop at People’s Bank in 1H2022
View(s):People’s Bank results for the six months period ended June 30, 2022 shows total operating income rising by 54.9 per cent to reach Rs. 69.3 billion, whilst total operating expenses grew by 3.7 per cent to Rs. 20.8 billion.
However profit after tax fell by 21.3 per cent in the reviewed 6-month period to Rs. 8.3 billion as against profits in the same 2021 period. Pre-tax profit amounted to Rs.11.6 billion, a decline of 12.5 per cent over the same period in 2021.
Similar to a predicament faced by many banks on rising impairment costs, the People’s Bank said in a statement that its impairment charges rose by 319.9 per cent to Rs.32.8 billion reflecting macro-economic stresses including those relating to its key customer segments.
Net interest income, which accounted for close to 75 per cent of the bank’s top line, grew by 30.5 per cent to reach Rs.51.7 billion reflecting both asset growth and net interest margin improvements.
Total deposits grew by 12.6 per cent to Rs.2,332.8 billion whilst net loans amounted to Rs.1,812.2 billion, contracting by a marginal 1.3 per cent.
Reflecting elevated levels of risk across select key customer segments, the bank’s stage 3 loans as a function of total gross loans increased to 10.4 per cent from 4 per cent at end 2021.
Chairman of People’s Bank, Sujeewa Rajapakse, stated that: “Despite extraordinary challenges from a macro front, the bank’s results provide some insight into its capacity to navigate through these circumstances. Needless to say, similar to most others in the industry, limited access to foreign currency is its key source of distress. To ease pressure from the foreign currency front, several measures are currently being explored in coordination and support of its key stakeholders. We remain committed to supporting the country’s economic revival initiatives at every instance so possible.”
CEO/General Manager of People’s Bank, Ranjith Kodituwakku, added that: “With pressures mounting from an interest margin and credit cost perspective, we have used the opportunity to also strengthen our platform from a business, operational and risk management perspective. As a bank with national interest at heart, we have allocated greater resources to support Small and Medium Scale Enterprises and certain other economy critical market segments.”
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