Pan Asia Bank posts strong performance; ups 1H PAT by 110% to over Rs. 2.1 b

Chairman Aravinda Perera and Director/CEO Naleen Edirisinghe 

The Pan Asia Banking Corporation PLC yesterday reported an impressive financial performance for 1H 2025 amidst diverse challenges emerging from the gradually reviving but challenging macro-economic environment. 

In a statement, PABC said in financial terms, the bank witnessed yet another period of growth and profitability, with an increase in Profit After Tax (PAT) of 110%. This growth is reflective of the robust portfolio management, effective cost management and commitment to generating sustainable profits. As a result, the Bank ended 1H 2025 with a PAT of Rs. 2.15 billion to more than double Earnings Per Share (EPS) from the previous year to reach Rs. 4.86. 

The bank’s robust performance was complemented by the ability to navigate external challenges adeptly and an unwavering commitment to asset quality, which was reflected in maintaining one of the lowest Stage 3 Loan Ratios in the industry of 2.39% as of 30 June, a testament to rigorous credit risk management and underwriting standards. While the Government-imposed restrictions on recoveries posed headwinds, the bank proactively refined its recovery strategies to minimise the impact. 

Market interest rates for both lending and deposits gradually came down in line with the policy decisions taken by the Monetary Board of the Central Bank of Sri Lanka (CBSL) to reduce the policy rates several times over. As a consequence, the bank’s interest income for 1H 2025 decreased by 5% compared to the corresponding period last year, due to its response to the market conditions, in a situation of increased average loan portfolio. Furthermore, interest expenses for 1H 2025 decreased by 12% against the interest expense for 1H 2024 due to prevailing low interest rates despite the strong growth in average deposit book. Consequently, the net interest income increased by 7% during 1H 2025 as the drop in interest expense outpaced the drop in interest income.

The bank’s Cost-to-Income Ratio improved remarkably by over 475 bps to 47.92% in 1H 2025 from 2025 from 52.68% for the year 2024. The increase in other operating expenses was contained at 15% due to the effective cost management strategies of the bank and despite the cost increases primarily caused by the new branch opening and other technological enhancement projects conducted by the bank and general price increase of goods and services.

The bank’s total assets experienced an increase of 7% mainly driven by loans and advances. The loans and advances book expanded by 14% during the period under review mainly due to increased credit demand from all 3 segments of SME Banking, Corporate Banking and Retail Banking. In the meantime, the bank’s total customer deposits base recorded a healthy growth of Rs. 13 billion or increased by 7% passing Rs. 204 billion mark to end the 1H 2025. 

During 1H 2025, the bank maintained a solid capital and liquidity position, reinforcing its financial strength in a dynamic environment. Capital buffers remained well above regulatory minimum requirements, reflecting prudent management. The Common Equity Tier 1 Capital Ratio and the Tier 1 Capital Ratio stood at 16.65%, staying well above the regulatory minimums of 7% and 8.50%, respectively. The Total Capital Ratio stood at 18.32% against the statutory minimum of 12.50%, ensuring resilience and growth capacity. Meanwhile, the bank’s Leverage Ratio which rank well above the regulatory minimum of 3%, stood at 7.89% in 1H 2025. 

Despite the significant expansion in loan book witnessed during 1H 2025, liquidity levels remained robust, with an All-Currency Liquidity Coverage Ratio (LCR) of 188.56% and Rupee LCR of 212.94%, both comfortably surpassing regulatory thresholds. The Net Stable Funding Ratio (NSFR) of 139.71% reflects the bank’s ability to raise stable funding under gradually resurgent economic conditions. These strong metrics underline the bank’s commitment to financial stability and sustainable expansion.

Director and CEO Naleen Edirisinghe said: “Pan Asia Bank’s strong performance in 1H 2025 is a clear reflection of our disciplined execution and unwavering focus on value creation. Despite a dynamic external environment, we delivered steady growth and improved profitability, validating the strength of our core banking strategy. Our consistent asset expansion and bottom-line growth speak to the trust our customers place in us. Looking ahead, we remain committed to driving digital innovation, enhancing customer experiences, and sustaining operational excellence to unlock further value and long-term growth.”