• Net Interest Income - 5,853 Mn, up by 29%
• Net Fee and Commission Income - 855 Mn, up by 24%
• Operating Profit - 2,725 Mn, up by 32%
• Profit before Tax - 1,996 Mn, up by 32%
• Profit after Tax - 1,025 Mn, up by 11%
• Total Assets – 248 Bn, up by 6%
• Customer Deposit Base reaches 193 Bn, grew by 10%
• Gross Loans and Advances - 149 Bn, grew by 6%
• CASA Ratio improves to 22% from 18%
• Cost-to-Income Ratio improves to 77% from 48.31%
• Net Interest Margin - 91%, Return on Assets (Pre-tax) - 1.67%, Return on Equity - 8.97%
• Stage 3 Loan Ratio improves to 4.14% from 4.36%
• The Bank remains well capitalised and liquid:
  • Tier 1 Capital Ratio 09% (Regulatory Minimum - 8.50%)
  • Total Capital Ratio 04% (Regulatory Minimum - 12.50%)
  • Rupee LCR 02%, All Currency LCR 316.22% (Regulatory Minimum - 100%)
  • Net Stable Funding Ratio (NSFR) - 38% (Regulatory Minimum – 100%)

Pan Asia Banking Corporation PLC reported a steady performance reflecting improved macro-economic conditions as the Bank reported its financial performance during 1^st half 2024, which showed judicious portfolio management and prudency exercised in dealing with possible fallout on its asset quality in challenging times. The Bank reported a Pre-tax Profit of Rs. 1,996 Mn for the six months period ended 30^th June 2024, which is 32% increase compared to the corresponding period last year, supported by improved net interest income, net fee & commission income, and other operating income.

The Sri Lankan economy has experienced some positive signs of gradual economic recovery and a measure of stability in macro-economic factors compared to the corresponding period last year, with the appreciation of LKR against USD and the IMF bailout followed by the domestic and foreign debt optimization announcements made by the Government of Sri Lanka.

The models used regarding collective impairment in 2023 were continued in 1^st half 2024 to ensure that adequate provision buffers were in place to absorb any potential credit risk that could arise in the future. The allowance for overlays applied in 2023 were continued and maintained during 1^st half 2024 as well. Meanwhile, the Bank managed to end the 1^st half 2024 with healthy credit quality matrices due to improved credit underwriting standards and concerted collection & recovery efforts. The Bank has further strengthened the impairment provision buffers held on Stage 3 exposures during 1^st half 2024 on prudent basis.

Since the latter part of 2023, market interest rates for both lending and deposits have gradually come down in line with the policy decisions taken by the Monetary Board of CBSL to reduce the policy rates couple of times. Thus, the Bank’s interest income of 1^st half 2024 has decreased by 18% compared to corresponding period due to its response to the market conditions. Also, the interest expense of 1^st half 2024 has decreased by 32% against the interest expense of 1^st half 2023 due to low interest rates prevailed in 1^st half 2024 despite the growth in deposit book. Consequently, the net interest income has increased by 29% in 1^st half 2024 due to drop in interest expense at a faster rate than the drop in interest income.

The Bank’s net fee and commission income has increased by 24% during 1^st half 2024 mainly due to the increase in fee income generated from loans and advances due to increased demand for credit which resulted from the prevailing low interest rate regime and other conducive macro-economic factors in the country.

The net gains from trading decreased by 57% during the reporting period due to the drop in capital gains from Sri Lanka Government Rupee Securities (T-Bills/Bonds) classified under FVPL.

The other operating income has increased significantly by 270% due to the prudently managed FX Positions with the appreciation of LKR against USD from Rs. 324 to Rs. 306 during 1^st half 2024.

The Bank strived for earnings maximization through portfolio re-alignment and effective cost management amidst improved macro-economic conditions as the Bank reported an improved Cost-to-Income Ratio of 45.77% during the 1^st half of 2024 from 48.31% for the year 2023.

The increase in personnel expenses is mainly driven by increased staff salaries, bonuses and allowances. The increase in other operating expenses contained to 7% due to the effective cost management strategies of the Bank and the cost increase is primarily due to effect of increased VAT rates from 01^st January 2024 onwards and general price increase of goods and services such as electricity and travelling expenses.

The taxes and levies on financial services and income tax expense have gone up mainly due to the increase in operating profits.

The Bank reported a Profit after Tax (PAT) of Rs. 1,025 Mn in 1^st half 2024 which is a 11% increase compared to the corresponding period last year. The Bank reported an Earnings Per Share (EPS) of Rs. 2.32 for 1^st half 2024.

The Bank reported a Net Interest Margin (NIM) of 4.91% for 1^st half 2024. Meanwhile, the Bank reported a Return on Equity (ROE) of 8.97% and a Pre-Tax Return on Assets (ROA) of 1.67% for the period under review. Meanwhile, the Bank’s Net Asset Value Per Share as of 30th June 2024 stood at Rs. 53.13.

The Bank’s total assets experienced an increase of 6% mainly driven by the loans and advances, reverse repurchase agreements and debt and other instruments at amortised cost. The loans and advances book has increased by 6% during the period under review mainly due to the increase in SME and Corporate credit exposures. In the meantime, the Bank’s total customer deposits base recorded a healthy growth of 10% to reach Rs. 193 Bn as of 30th June 2024. As a result, the CASA Ratio of the Bank has improved by 354 bps to 22% level.

The Bank’s Stage 3 Loan Ratio improved to 4.14% as of 30^th June 2024 from 4.36% as of last yearend. Stage 3 Provision Cover stood at 52.09% as of 30^th June 2024. The Bank continued its focused actions towards managing the quality of its loan book by containing NPLs amidst the extremely weakened economic landscape.

The Bank maintains all its capital and liquidity ratios well above the regulatory minimum standards. The Bank’s Tier 1 Capital Ratio and Total Capital Ratio as of 30^th June 2024 stood at 16.09% and 18.04% respectively. Further, the Bank’s Leverage Ratio stood at 7.32% as of 30^th June 2024.

The Bank’s Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) under BASEL III Accord stood well above the statutory minimums. The Bank maintained LCR of 316.22% and 262.02% in All Currencies and Rupees respectively and NSFR of 150.38% as of 30^th June 2024.

Commenting on the Bank’s performance, Naleen Edirisinghe, Director and CEO of Pan Asia Bank said, “Pan Asia Bank continues to demonstrate resilience despite external challenges by delivering on the fundamentals. Our solid financial and operational results for the 1^st half of the 2024 fiscal year demonstrates that we are well positioned to achieve our vision for the Bank. A growth in PBT of 32% for the 1st half 2024 affirms our sound strategy, which will be accelerated for generating greater earnings from core banking while infusing operational efficiencies. The spirit of innovation continues to drive Pan Asia Bank as we make notable strides in the digitalization of our products and services, backed by an industry best team, thereby paving the way to achieve new milestones in the coming year”.

Pan Asia Bank rose 5 places in the Business Today’s Top 40 business organizations ranking for 2022-2023 based on criteria such as portfolio, profits and risks taken, resilience, passion and how well challenges are met. The Bank was also selected by LMD as one of the ‘Most Awarded Entities’ and ‘Most Respected Entities in Sri Lanka’ in 2023.

Recording consistent growth year after year, Pan Asia Bank is strongly positioned as the ‘Truly Sri Lankan Bank’, marking an illustrious journey that has promoted financial security and fulfilled the aspirations of its customers while supporting the prosperity of the nation.