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| Tuesday, 2 September 2003 |
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Pan Asia Bank achieves 135% growth rate in operating profits Pan Asia Bank (PAB) has achieved a growth rate of about 135% in its operating profits resulting in an operating profit before loan loss provisioning of Rs 21 million in 2002 compared to the operating loss in 2001.
In PAB's annual report, Chairman W. M. Abeyratne Bandara said that the bank was able to achieve satisfactory levels in income generation, recoveries in NPAs, reduction in cost of funds and operating costs, growth in other deposits and advances. This was while maintaining the liquidity and other requirements of the Central Bank of Sri Lanka, in the midst of several unfavourable market conditions beyond the control of the bank, he said. Abeyratne attributes this achievement to new Management Strategies, expeditious recovery procedures, introduction of new business and marketing concepts, cost management and control measures adopted by the Management of the Bank. However, Abeyratne said that the Bank had to face major challenges in achieving low NPA ratio, maintenance of required minimum Capital Adequacy Ratio, appropriate deposit mix, favourable Credit/Deposit ratio and expansion of the Bank's Branch Network in order to increase the deposit and advance levels and the profitability of the Bank. Customer deposits of PAB have seen an increase of Rs. 577.632 million which is nearly a 16% increase despite the turbulence created by the failing of a specialised bank during the latter part of 2002. This reflects the public confidence in the operations of PAB and its service levels, General Manager/Chief Executive Officer R. Nadarajah said. Total loans and advances have grown during the year 2002 only by Rs. 454.183 million, which is an increase of nearly 13%. The Bank has also expanded its pawning activities during the year 2002 to cater to the lower income strata of the economy providing finance for emergencies with speedy disbursement of loans. The Bank is looking into several strategies to increase the Capital Adequacy Ratio to 12% before the end of the year, which is only 10.14% at present. In a bid to infuse additional capital the Bank will call up the uncalled share capital of Rs. 2 per share which will bring in nearly Rs 110 million. The Bank hopes to set up a strategic alliance with other financial institutions. PAB has also plans to increase its Tier II capital by the issue of unsecured subordinate debentures with maturities over five years during the latter half of 2003. The cessation of hostilities in the North and East to end the conflict which has plagued the country over the last two decades has largely contributed to improve economic conditions during 2002 compared to the previous year. This and the intervention of the Central Bank has contributed to the low interest rate and low inflation scenario which benefited the financial sector including Banks. It is hoped that these improved conditions will also assist Banks to increase recoveries and reduce the non-performing loan portfolios in the coming years, thus benefiting the entire financial system, Nadarajah said. The management has already taken several measures in developing new corporate strategies, making changes in the Senior Management levels, introduction of improved cost management techniques, changing the deposit mix, shifting business strategies to focus on retail banking, introduction of new products and services, expansion of training activities, enhanced facilities for the employees, introduction of performance based evaluation and reward system, insistence of corporate governance and infusion of new capital in order to meet the challenges and to bring a high growth rate in all areas in the coming year, to fulfil the shareholders and other stakeholders' expectations. |
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