[CORPORATE]

PB record impressive

“People’s Bank has continued to show impressive performance, in profits and balance sheet growth over the past eight years. The Bank, completing 47 years of service to the people of Sri Lanka, has recorded an impressive performance in the year 2008 as well.

“The Bank’s unaudited financials show profit before taxation and appropriations reaching its highest level of Rs 5.6 bn in the 2008 financial year, whilst profit before tax for the group surpassed Rs 7.2 bn.

The Bank’s profit before taxation indicated a growth of 13.2% whilst profit after taxation recorded an impressive a 14% growth over the previous year.” said Chairman, People’s Bank W. Karunajeewa.

“The Bank’s capital funds now amount to Rs 15.9 bn up from Rs 12.9 bn over the previous year. This was contributed by a capital injection of Rs 1.5 bn by the Government of Sri Lanka (GoSL) and substantial retained earnings, despite high taxation and returns to GoSL.

It should be noted that People’s Bank’s contribution to GoSL by way of taxes and levies increased by 18.2% to reach Rs 7.4 bn compared to Rs 6.2 bn in 2007”, he added.

“The second phase of People’s Bank’s major restructuring drive, based on the Strategic Plan initiated in 2001 was completed in 2008, achieving outstanding success for the Bank.

A key focus on the Bank’s Strategic Plan has been to create a customer centric and performance oriented culture,” said CEO/GM, People’s Bank P.V. Pathirana. We have already formulated the next Strategic Plan for 2009-2014 and will be focusing on achieving the set goals and objectives in 2009 onwards,” he added.

Mr. Yohan Soza, Head of Finance explained that in the year 2008, net income of the Bank grew by Rs 2.4 bn, to Rs 18.9 bn a remarkable 15% rise compared with 2007. This was mainly due to timely pricing and repricing of our loan book, and despite the marginal growth recorded in our lending portfolio.

“As expected during inflationary times, the Bank’s overheads increased but moderately by 9% or Rs 1.4 bn to Rs 17.1 bn over Rs 15.7 bn in 2007. However, this increase was within internal budgetary levels.

People’s Bank recorded a working profit of Rs. 7.3 bn, an improvement of Rs 1.4 bn over the 2007 recorded number. Provisioning as required by the Central Bank, was increased for another successive year.

The 1% general provision on performing loans is expected to be met on schedule by March 31 2009. Total general provisions (inclusive of pawning) amounted to Rs 577 mn, as against Rs 352 mn in 2007. The Bank’s specific provisions totalled Rs 965 mn in 2008, compared to Rs 470 mn in 2007”.

“Despite the above People’s Bank recorded a healthy profit before taxation of Rs 5.6 bn in 2008, as compared to Rs 5 bn in 2007,” he further added.

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Fact Box

*Profit before tax increse by 14%.
*Working profit Rs 7.3 bln.
*Net income Rs 18.9 bln.
*Established 47 years ago.

Allianz Lanka maintains robust performance

Allianz Lanka maintained the momentum of steady growth and profitability into its fourth year of operations in General Insurance, with Gross Written Premium (GWP) reaching 601 million, a year over year growth of 45% over the previous year’s GWP of 414 million. Net Profit before Tax correspondingly increased by 63%, from Rs 53 in 2007 to Rs 86 million in 2008.

The pure Underwriting Profit comprises more than 47% of the total profit component. The Underwriting Profits also grew by 28%, from Rs 32 million in 2007 to Rs 41 million in the year under review.

“We are very pleased that we have achieved a GWP of over Rs 0.5 billion within a short span of 4 years of operations and continuously increased underwriting profits in a difficult market. We are also happy that we continue to maintain a combined ratio well below industry norms,” confirmed CEO Allianz Lanka, Surekha Alles.

Allianz Lanka attributes its strong performance to the implementation of several core business strategies and selective risk management and underwriting practices.

Last year was an eventful one for the fully owned local subsidiary of German financial services conglomerate Allianz, which launched Life business in end October 2008 by forming a separate company, in keeping with IBSL proposals.

Within just two months of operations the Company achieved a highly commendable GWP of Rs. 4.1 million. “We are proud to say that we are revolutionising Life insurance in Sri Lanka with our unique Life Plan, which is designed to take into account the risk element with a sound investment plan for the entire family.

This has brought an exciting new concept into Life insurance in Sri Lanka. The figures speak for the success with which this plan is being received by the Sri Lankan people, Alles said.

Cathay Pacific incurs loss

The Cathay Pacific Group announced an attributable loss of HK$ 8,558 million in 2008, compared to a profit of HK$ 7,023 million the previous year. The 2008 result is a record annual loss for the airline.

Group turnover rose by 14.9 per cent to HK$ 86,578 million in 2008. Business in the first six months of the year was generally strong, but extremely high fuel prices in the first half of the year and a plunge in both passenger and cargo demand in the second half as a result of the global financial crisis adversely impacted the financial results.

The price of aviation fuel reached new highs in July 2008 though prices fell significantly towards the end of the year. Fuel surcharges on cargo and passenger tickets only partially offset the additional cost incurred over the course of the year.

The fall in fuel prices, though welcome, caused unrealised mark-to-market losses of HK$ 7.6 billion on fuel hedging contracts for the period 2009-2011 which were entered into in order to give a degree of certainty as to future fuel prices and protection against price increases.