Innovation - driving force of PABC

by Lalin FERNANDOPULLE

Pan Asia Banking Corporation PLC (PABC), a 100 percent Sri Lankan bank achieved a commendable growth in the first quarter of 2011 with a net profit after tax of Rs. 196 million, is a 190 percent increase compared to the corresponding period last year.

The bank’s net interest income for the period rose by 49 percent to Rs. 507 million from Rs. 340 million last year which was derived primarily from core banking income.

PABC office in Colombo

A.G. Weerasinghe

The commission income increased by an impressive 135 percent compared to the corresponding period of the previous year mainly due to the volume of trade, guarantees and international business of the bank.

PABC’s customer loans increased by 114 percent to Rs. 24,265 million. The major contributors to the bank’s asset growth were from pawning, leasing, Ranaviru Harasara loans and margin trading.

The bank’s deposits increased by 58 percent to Rs. 26,226 million during the same period.

PABC sources said that key indicators such as the NPA ratio declined from 11.96 percent at the first quarter of 2010 to 4.84 percent in the first quarter of this year and notably the net NPA ratio is down to 2.63 percent which is well within the industry average and reflects sound asset quality.

Chairman PABC, A.G. Weerasinghe said the bank expanded its branch network to reach 44 at the end of March 2011 inclusive of the three new branches opened recently.

“PABC hopes to open 25 branches islandwide this year and increase the number of branches to around 75 by the end of this year”, he said.

PABC has a strong presence in the North and the East with two branches in the North and two in the East opened after the conflict.

Weerasinghe said, “the North and the East has immense potential for business and we hope to expand our branch network and enhance our customer base in the region.”

“Sri Lanka is poised at the crest of economic rejuvenation and we are confident of the bank’s long-term prospects as we enter the 16th year in business”, he said.

PABC plans to open a branch in Kilinochchi very soon and set up branches in Kathankudi, Trincomalee, Ampara and Valachchenai this year.

Pan Asia Bank withstood the challenges of the financial turmoil in the country and in the world and is focused on expansion.

“Our focus has always been on branch expansion and deposit mobilisation which have helped the company to sustain growth. PABC aims at a higher deposit base from the average 15-20 percent growth a year”, the PABC Chairman said.

Innovation has been the driving force of the bank and in keeping with the principle, PABC has launched a special savings account with an eight percent interest rate.

A bank official said customers are entitled to the special interest rate only if they have a balance of Rs. 50,000 in their accounts. A customer could withdraw cash any number of times a day.

PABC remains committed to meeting industry norms and is on track to comply with the Central Bank’s directive to maintain a capital base of Rs. 3 billion by the end of 2011, Rs. 4 billion by end of 2013 and Rs. 5 billion by end 2015. Apart from savings, current and foreign currency accounts PABC offers products such as Ranaviru Harasara, Nivasa housing loan, Ran loan, children’s savings accounts such as Lahiru, Mithuru, Siyadaru, prime banking and custodial services.

PABC was successful in improving its overall performance last year. Post tax profits exceeded the expectation for the year and reached Rs. 362 million. However the net profit for 2010 was seven percent lower than 2009 due to the exceptional gains made in the Treasury capital market in 2009. The bank’s core banking recorded a 27 percent growth last year.