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Chairman Sujeewa Rajapakse and CEO/GM Clive Fonseka
People’s Bank yesterday announced the results for its year ended December 31, 2023 reporting total consolidated operating income and pre-tax profit of LKR 96.8 billion and LKR 19.3 billion, respectively.
Reflecting high interest costs on term deposit funding, due to the high interest rate environment which prevailed during 2022 and early 2023 - and significant interest concessions extended to the customers for the ultimate benefit of the country - saw consolidated net interest income slip to LKR 67.8 billion during the year from LKR 91.0 billion in the year prior.
However, the last quarter of the year showed a forward movement on this front as its interest expense continues to normalize with the current interest rate environment.
Consolidated net fees & commission income amounted to LKR 13.9 billion, reflecting a 11.0% growth over 2022 less extraordinary items during the said prior year.
Despite inflation-pushed cost pressures, total consolidated operating expenses rose by only 5.5% to reach LKR 62.2 billion ultimately reflecting stringent cost control and efficiency improvements which compared well with peers.
Total consolidated customers deposits and rupee loans grew by 12.0% and 1.4%, respectively whilst it’s all currency net loans contracted by 4.0% reflecting both the appreciation of the rupee impact on its foreign currency loan book as well as measured growth by both the Bank and the Group in the first half of the year considering macro-economic circumstances. Total consolidated assets stood at LKR 3,208.2 billion in 2023 (end 2022: LKR 3,133.1 billion).
The Bank’s Tier I and Total Capital Adequacy Ratios were 12.4% and 17.4%, respectively at December 31, 2023 (end 2022: 11.9% and 16.3%) whilst, on a consolidated basis, it was 13.7% and 18.2%, respectively (end 2022: 13.3% and 17.2%). The Bank’s solvency levels remain sound ultimately reflecting efforts made since the onset of Basel III on 1 July 2017. Further efforts to bolster its regulatory capital, including for the purposes of additional contingency, is currently in process.
People’s Bank Chairman Sujeewa Rajapakse said: “Considering the added burden shouldered as a State Bank - amidst the most challenging set of circumstances over the last four years, I am very pleased with the Bank’s overall performance on both quantitative and, even more importantly, a qualitative front. Taking on some of these challenges head-on, we have navigated the first phase of the Domestic Debt Optimisation program with great success, converted our rupee liquidity stresses to now an all-time high excess, further augmented our regulatory capital amidst limiting circumstances and drive super normal growth across all our overall digital platforms - all of which whilst continuing to place national interest and serving our customers at the heart of all our decision making ahead of profitability.”
“Looking ahead, with the economy showing signs of rejuvenation as expected, we remain focused and well geared to support the country in its next phase of its growth. As we have done so over the last several years, we reaffirm our commitment to play our role to foremost safeguard national interest. I take the opportunity to also extend my deepest gratitude to our shareholders, including the cooperative societies, our customers, our employees, and our numerous other stakeholders for their unwavering support and trust in us. Together, we have not only managed to overcome obstacles but have also laid the foundation for an institution with enviable resilience and sustainable long-term growth potential,” he added.
Chief Executive Officer/General Manager Clive Fonseka said: “In our pursuit of driving transformation, we have embarked on a new strategic direction during 2023 which focuses on rebalancing our business model, embracing technology integration, and intensifying the migration towards all our digital platforms. The year ended has witnessed notable success in each of these areas - the core of them being a proactive mindset, characterised by a constant search for innovation and adaptability.”
“Amidst these challenging times, it must be said that, our team has demonstrated steadfast commitment and admirable dedication. Their unrelenting drive to push the Institution forward is the force behind us,” he said.
“Looking ahead, we will further our current path whilst also focusing on further streamlining our operations and enhancing efficiency across all parts of our business. Central to our approach is prioritising customer satisfaction, ensuring that every decision and action is aimed at delivering exceptional value and experiences to our valued clientele. Through these concerted efforts, we are ready to not only meet the evolving needs of our stakeholders but also emerge as a leader in our operating landscape. With some of our most difficult challenges now behind us, we look forward with a great degree of hope and optimism,” Fonseka added.
