People's Bank records Rs. 1.46b post tax profit

The People's Bank yesterday announced a third consecutive year of healthy earnings growth and the highest profit on record after tax and before extraordinary items reaching Rs. 2.195 Billion, in 2004.

The profit after taxation and all extraordinary items amounted to Rs. 1.414 Billion.

The extraordinary items relate mainly to provisions for losses arising from the tsunami, amounting to Rs. 681 Million, the Bank said.

"The bank has performed exceptionally to show consistent profit and balance sheet growth despite the many challenges faced last year and the affects of the tsunami on many of its customers", said Chairman of People's Bank P. Amarasinghe.

"The financially stronger footing of People's Bank not only helped it absorb the financial impact of the tsunami on its bottom-line but also enabled it to play a critical role in helping the government disburse grants and loans to affected families and businesses", he said.

In the immediate aftermath of the tsunami disaster, the Bank commenced emergency relief and banking operations from the afternoon of the 26th itself in many branches.

"18 branches of the Bank were affected by tidal waters. However, within 3 working days, even the worst affected Branches were up and running, which is a major testament to the efforts of the Bank staff at all levels," Amarasinghe said.

The Bank's customer deposit grew by 18% last year to Rs. 185 billion, from its over 9 Million deposit accounts, which is by any means of measure, a very significant scale of operation. The non performing loan portfolio, a key indicator on the quality of lending, was also significantly lower at 14% of total lending compared to 21% in 2001 when the current restructuring process commenced.

People's Bank launched off on a major restructuring drive based on a Strategic Plan that was made in 2001 extending to 2003.

The Strategic Plan itself was compiled after the bank brought in a new Board of Directors, who then recruited an expatriate CEO and a team from the private sector to strengthen Senior Management.

"The new combined Management Team, together with all levels of staff of the Bank, were able to achieve an outstanding run of success for the Bank, resulting in a highly successful completion of the First Strategic Plan", said Mr. Amarasinghe.

The Bank has now started the second phase of restructuring, for the period 2004 to 2008. The first year of the second phase, 2004, has ended with the Bank achieving not only its highest ever Profit before and after Tax, but also showing continued improvement of customer service, quality standards and a strong focus to upgrade the technology infrastructure of the Bank.

During 2004, the Bank introduced a new Core Banking Platform, which is an advanced computer system.

This new system will be eventually introduced to 60 main branches, the Corporate Banking Division and to the Overseas Customer Unit in addition to upgrading the Central General Ledger Accounting System of the Bank.

In addition, the Bank linked up 143 Branches in all the main cities across Sri Lanka, to automate inter-branch transactions. In relation to its financial performance, the Bank has for the first time since 1998, crossed over from a negative net worth on the Balance Sheet to a positive net worth and the Bank is now confident, that the Capital Deficit problem of the Bank, caused by poor credit decisions of the past, will be resolved during the period of the new Strategic Plan.

"The Board of Directors and Management of the Bank are confident, that during the period of the Second Strategic Plan, that the Bank, which introduced banking across the grass roots level of Sri Lanka, will truly re-develop into being The People's Bank of Sri Lanka", the Chairman said.