People’s Bank reports consolidated pre-tax profit of Rs. 9.4 bln for 1H’23

People’s Bank this week released its results for its six months ended June 30, 2023 reporting total consolidated operating income and pre-tax profit amounting to Rs.48.2 billion and Rs.9.4 billion, respectively, down sharply from 1H -2022: Rs.80.7 billion and Rs.15.2 billion.

In a media release, the bank said due to higher interest costs; stemming from the high interest rate environment which prevailed during much of 2022 which led to higher of cost of term deposit funding, consolidated net interest income slipped to Rs.31.4 billion during the six-month period ended June 30, 2023 relative to the same period of 2022. Consolidated net fees and commission income amounted to Rs.7.9 billion which, excluding one off items during 1H-22, represented a near 6 per cent growth on a like for like basis.

Reflecting inflation pushed cost pressures, much of which originated in the latter part of 1H-22, saw consolidated total operating expenses rise by 12.98 per cent to Rs.30.2 billion (1H-22: Rs.26.7 billion). This compared relatively well with peers which, in part, showcasing group efforts for greater cost control at every instance so reasonably possible and within its reasonable control.

Total consolidated customers deposits grew to reach Rs.2,565 billion - i.e., by 4.7 per cent, whilst consolidated net loans contracted by 6.7 per cent to Rs.1,788.0 billion. This primarily reflected the impact of the rupee appreciation on its foreign currency loan book and, to a notable extent, the cautionary approach taken by both the bank and the group in credit growth; more so macro-circumstances considered.

Commenting on the results of the bank and the group, its chairman Sujeewa Rajapakse, said: “Notwithstanding the many limiting factors, the bank has, and will continue to, yield benefits of the many initiatives taken to strengthen the many aspects of the bank’s business. Looking ahead, with macro level fundamentals showing signs of positive forward movement, our focus now remains in continuing to support the Government in economy critical areas. Amongst other, promoting financial inclusion is, and always will be, our priority where we are working to expand access to financial services, particularly in underserved areas, through innovative approaches and digital solutions”.

Commenting on the results, the bank’s Chief Executive Officer/ General Manager Clive Fonseka, stated that: “Throughout the first half of this year, we navigated through a difficult set of circumstances and have once again successfully proved our overall resolve and resilience in the face of extreme adversity. These ultimately attest to the success of our strategic initiatives and operational agility”.