People's Bank Group records highest ever PBT of Rs. 21 billion

The People's Bank (PB) stormed its way into the top slot in the country's banking industry with a superlative performance, posting remarkable results for the financial year 2011.

This ground-breaking performance reflects the unwavering commitment on the part of the bank to sustain and improve on its key performance indicators in a consistent and progressive manner while upholding high standards of corporate governance, thus living up to the expectations of its diverse stakeholders.

Chairman W Karunajeewa

CEO/GM N Vasantha Kumar

The People's Bank Group created history by surpassing all previous records to post an exceptional PBT figure of Rs. 21 billion in FY 2011 - the highest ever recorded in the banking industry to-date. This includes the PBT of Rs. 15.3 billion recorded by People's Bank - which delivered a phenomenal 75% growth over last year, thus emerging as one of the most profitable banks in Sri Lanka for the financial year 2011.

The bank experienced a substantial increase in its gross interest income which expanded by 10% whilst its interest expenses increased only by 3.5% during the period under review.

Stringent cost management initiatives and budgetary control enabled the bank to reduce its overall overheads by 4.5% over 2010. This, along with growth in fee-based income enabled PB to record a profit after tax (PAT) of Rs 10.2 billion - a remarkable 95% growth over the previous year's figure of Rs. 5.2 billion.

PB's ability to maintain a healthy mix of loans and advances and investments enabled the bank to enhance its asset quality significantly during the year under review, recording a mammoth Rs. 663 billion, which was an increase of 21% over the previous year. The favourable macro-economic conditions that prevailed during the year contributed positively towards this achievement. The healthy growth experienced in commercial and housing loans, pawning advances and state owned enterprises inter-alia resulted in the expansion of total loans and advances to Rs. 478 billion. from the last year's figure of Rs. 372 billion. which is a healthy increase of 29% over the previous year.

The pawning business - which is a capital efficient business segment continued to propel profitability of the Bank by emerging as an integral segment of PB's financial cycle, particularly for those stakeholders involved in agriculture, fisheries, and micro, small and medium scale entrepreneurial community in the country. Having pioneered the concept of pawning in the year 1963 People's Bank has today emerged as the undisputed leader and the most sought-after financial services provider in the pawning sector through which the Bank caters to a significant customer base via its widespread island-wide branch network.

Directly influenced by the increase in rupee savings the bank's overall deposits rose to a formidable Rs. 540 billion. during the year under review - an increase of 16.8% over the previous year's figure of Rs. 462 billion. Moreover, the fixed deposits segment which represents a significant portion of the deposit portfolio also grew by 18% over the year 2010 to boost the overall deposits status of the bank.

Among the many noteworthy achievements during the year 2011; the bringing down of the NPL ratio from last year's figure of 5% to 3.4% in FY 2011 can be singled-out as one of the key accomplishments that speaks volumes of the bank's management strength, given the diverse and complex business environment state banks operates in. Of this amount, 48% has been classified as 'old and hard-core loans' for which the bank has made full provisions for.