November, 16, 2022
Pan Asia Banking Corporation PLC reflected resilience amid the multitude of adversities coming from the challenging macro-economic conditions as the bank reported its financial performance for the period ended on September 30, 2022 which showed judicious portfolio management and prudency exercised in dealing with possible fallout on its asset quality from sharp increase in the interest rates.
Despite the muted profitability mainly stemming from the enhanced provisions made against the possible stresses on loans, the bank increased its net interest income by 11% in the nine months to Rs. 7,433.6 million in a testament for the better management of its asset and liability portfolio, making the most of the rising rates.
For the nine months ended on 30th September 2022, the Bank reported a Pre-Tax Profit of Rs. 626 million and a Post-Tax Profit of Rs. 433 million which were weighed down by higher impairment provisions on loans and other assets denominated in foreign currency.
The Bank increased its provision buffers for loan losses during the period under review sensibly, through introducing changes to impairment models taking into consideration increased risks and uncertainties emerged due to the turbulent economic conditions prevailed in the country, including additional provisions on the Bank‟s investments in foreign currency denominated financial instruments of Government of Sri Lanka. As a result of the additional provisions made during the nine months period to cover the elevated risks in the macro-economic environment including steep depreciation of LKR against major foreign currencies, the impairment charges recorded a sharp increase of 233% compared to the corresponding period which caused the Bank reporting a decline in net operating income on YoY basis.
The impairment expense for the reporting period includes provisions made on foreign currency exposures to the Government of Sri Lanka amounting to Rs.1.58 billion. However, when presenting the figures, the Management has classified the impact of currency depreciation on the impairment charges of loans and advances and government securities denominated in foreign currencies amounting to Rs. 2.39 billion under the Other Operating Income/(Loss) where the exchange gains from the corresponding assets have been recognized. Therefore, impairment charges arose solely as a result of deterioration in credit quality has been accounted under „Impairment Charges‟ and it has increased by 66% compared to the corresponding period.
“Our performance is a testament that we have put quality over quantity this year when the circumstances dramatically changed from what we witnessed last year. This is while managing the assets and liabilities to generate returns from our existing portfolio while also keeping a closer tab on the operational expenses amid runaway inflation”, said Nimal Tillekeratne, the Bank‟s Managing Director/Chief Executive Officer.
Reflecting this the interest income for the period rose by 34% due to increase in market lending rates and re-pricing effect of facilities as respond to the market conditions resulted from the recent monetary policy decisions taken by the Central Bank of Sri Lanka to increase the policy rates and remove the interest rate caps on certain lending products. Further, the significant volume growth in pawning, term loans and overdrafts which also led to the increase in interest income. Interest income from Rupee denominated securities of Government of Sri Lanka has gone up due to the rate increases.
Interest Expense for the period has also gone up by 56% mainly due to steep increase in deposit rates and re-pricing effect of deposits as respond to the market conditions resulted from the recent monetary policy decisions taken by the Central Bank of Sri Lanka to increase the policy rates. Consequently, the Net Interest Income grew by 11% to Rs. 7.43 billion during the period under review from Rs. 6.67 billion in corresponding period due to higher growth in interest income than the growth in interest expense.
The Bank‟s Net Fee and Commission Income recorded a growth of 6% mainly due to increased volumes and rates of international trade activities, guarantees and remittances. Meanwhile, the Net Gains from Trading increased by 264% mainly resulted from reporting high premiums in forex swap agreements due to the unconventional developments in the swap market which was heavily discounted in previous period. In contrary, the Bank reported a significant loss in „Other Operating Income‟ during the reporting period mainly due to the presentation of the currency depreciation impact on impairment charges on financial assets denominated securities of Government of Sri Lanka, under „Other Operating Income‟. Other than that, there is a drop in foreign exchange gains due to losses from asset and liability revaluation incurred as a result of depreciation of LKR significantly against major foreign currencies.
The Bank strived for earnings maximization through portfolio re-alignment and cost management despite sector vulnerabilities that prevailed since last year. The Bank‟s Cost-to-Income Ratio improved during the period under review owing to the excellence in core banking performance which is reflected ingrowths in most key revenue lines and various strategies and measures taken to contain the increase in overhead costs. In fact, the Bank managed to contain the increase in Other Operating Expenses at 15% during the period under review compared to the previous period despite rising prices for commodities. Meanwhile, the reduced allocations for staff bonuses and cost savings due to staff rationalisation activities caused the Bank reporting a reduced Personnel Expenses and Total Operating Expenses during the period under review.
Value Added Tax on Financial Services and Income Tax Expenses have come down mainly due to the drop in Operating Profits of the Bank for the period under review despite the increase in statutory tax rate for VAT on Financial Services.
The Bank reported a healthy Net Interest Margin of 4.98% during the reporting period. Meanwhile, the Bank reported a Pre-Tax Return on Assets (ROA) of 0.42% and a Post-Tax Return on Equity (ROE) of 3.08% during the period under review. The Bank‟s Earnings per Share (EPS) for the period dropped to Rs. 0.98 from Rs.4.54 due to increased impairment provisioning buffers. The Bank‟s Net Asset Value per Share as at the end of the reporting period stood at Rs. 42.90.
The Total Assets base stood at Rs. 205 billion as at 30th September 2022 after posting a growth of 8% during the nine months period supported mainly by the expansion in investments and loan book. The Gross Loans and Advances book recorded a growth of 4% to reach Rs. 157.04 billion with major contributions from the Retail segment. The main lending products that drove the growth during the period were Pawning and Term loans. During the period under review the Bank did not lend vigorously to sectors that exhibited high stress as a measure of the Bank‟s prudential lending decisions.
The Customer Deposits recorded a growth of 8% to reach Rs.157.64 billion as at 30th September 2022.
The Bank‟s Stage 3 Loans to Total Loans Ratio is 3.40% as at 30th September 2022. The Bank‟s Stage 3 Provision Cover improved to 55.26% (2021-51.23%) and the Total Impairment Provision Cover improved to 86.27% (2021-78.39%) due to prudent provisioning for probable credit losses. 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 at 30th September 2022 stood at 13.44% and 15.41% respectively. The Bank‟s Statutory Liquid Assets Ratio (SLAR) as at 30th September 2022 stood at 23.50% and 83.93% for Domestic Banking Unit and Off-Shore Banking Unit respectively. Meanwhile, the Bank‟s Liquidity Coverage Ratio (LCR) under BASEL III stood well above the statutory minimums. The Bank maintained LCR of 194.77% and 207.16% for All Currencies and LKR respectively.
October, 25, 2022
The nation’s Truly Sri Lankan Bank, Pan Asia Bank was bestowed with the ‘Employee ESG Program of the Year Sri Lanka 2022’ accolade by the Global Banking and Finance Awards, which reflects the Bank’s unique workplace culture. Pan Asia Bank operates a well-knit Human Resource (HR) framework called ‘CARE’ which encompasses four pillars - Connect, Awareness, Reward, and Engagement - to engage and support the employee to the greatest extent possible.
Commenting on the prestigious accolade, Sampath Alwis, the Assistant General Manager/ Head - Human Resources at Pan Asia Bank said, “We are delighted to be bestowed with the Employee ESG Program of the Year Sri Lanka 2022’ award at the sought-after Global Banking and Finance awards. The HR function is becoming increasingly critical in times of uncertainty that the world is seeing today. At Pan Asia Bank, our most valuable asset – our people – are managed through effective training, strong engagement, constant evaluation, appreciation and encouragement. Our employee engagement, welfare, development, career progress and employee friendly and transparent policies have allowed us to be recognized with this prestigious award.”
Sampath Alwis adds further, “The banking sector is vital for the economy and hence it was a challenge to manage smooth operations during the pandemic. Nevertheless, we continued business as usual HR operations while managing the needs of our people along with the business needs and adhering to the set health and safety guidelines. I am proud to say that our bank recorded a minimum number of COVID-19 positive cases amongst the Sri Lankan banking community due to these stringent efforts of safeguarding our staff and their families. The Bank’s HR team will always be there as a stepping stone to support our employees through any professional or personal matter.”
The Bank’s employees receive extensive training in industry specific technical and trending soft skills to deliver the highest quality of customer service across all branches. Even during the lockdown period, the bank utilized online training platforms to extensively train the staff in an attempt to keep them abreast with the necessary knowledge and skills to operate effectively as soon as the economy recovers. As a Truly Sri Lankan Bank, Pan Asia Bank has established welfare programmes that boost camaraderie and fellowship amongst different segments of employees which return loyalty and higher productivity.
Pan Asia Bank Managing Director/CEO Nimal Tillekeratne elaborated, “Our human capital remains the driving force of our success and we remain committed to investing in our people, to make them feel valued and respected.”
Pan Asia Bank continues to inspire and spread joy amongst its employees through various initiatives as one of the most motivated and professional teams in the banking industry.
June, 27, 2022
Serving the nation as the Truly Sri Lankan Bank, Pan Asia Bank inaugurated its newly relocated branch in Ja-Ela on 20th June 2022 at No 206, Colombo Road, Weligampitiya, Ja-Ela. The Chief Guest on the auspicious occasion was the Chairman of Pan Asia Bank Mr Jayantha S B Rangamuwa and the Guest of honour the Chief Operating officer of Pan Asia Bank Mr Naleen Edirisinghe. The event was graced by senior management, members of the business community and local customers from the vicinity along with other esteemed guests. The strategically relocated branch is conveniently located for the benefit of its valued customers from all communities in the area.
As The Truly Sri Lankan Bank, Pan Asia Bank is committed to offer speedy and unique banking solutions that are based on understanding true customer requirements. Its products and services are to fulfill people’s aspirations, such as Daskam Children’s Savings account, which offers an additional 10% deposit on top of each and every deposit with an enhanced interest of 5.75% p.a. (5.90%) and the Champion Saver Savings Account, which offers up to 8%p.a. (AER 8.30%) interest on savings deposits are few other unique products offered by the bank. The Bank also offers an array of other products including Leasing facilities, Credit Cards and the Sammana product - an attractive guarantor free personal loan facility up to 5,000,000/- for retired government servants and Central Bank of Sri Lanka pensioners.
Some of the accolades won by Pan Asia Bank recently include the Runner-up Award - Banking sector and the Merit Award - Corporate Governance categories at the annual National Business Excellence Awards (NBEA) organized by the National Chamber of Commerce of Sri Lanka. The Bank was also selected by LMD as one of the top 15 ‘Most Awarded Entities’. Celebrated by its stakeholders and admired by its peers, Pan Asia Bank stands tall, securely positioned as ‘The Truly Sri Lankan Bank', reflecting its dynamic journey thus far while forging ahead to fulfil its ambitious plans for the future in service of the nation.
Photo Caption: The newly relocated Ja-Ela Branch is seen in the picture and also the Chairman of Pan Asia Bank Jayantha S B Rangamuwa is seen declaring the branch open along with (from left) Saminda Wijesinghe –Manager Ja-Ela Branch, Harsha Kurukulasuriya - Assistant General Manager Operations and Administration, Naleen Edirisinghe – Chief Operating Officer and Primal Samarasinghe – Area Manager Colombo Outer area of Pan Asia Bank.
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