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| Sunday, 29 February 2004 |
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| News Business Features Editorial
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People's Bank - record net profit of Rs 1.5b by Hiran H. Senewiratne The biggest state bank in the country, People's Bank (PB), has recorded a net profit of Rs 1.5 billion in the year 2003, which was the highest in the 43-year history of the bank. The bank, one of the largest contributors to the government's consolidated fund, had contributed nearly Rs 1.2 billion in the year 2003, said its Chairman, Lal Nanayakkara. The annual report, which was released two months ahead of the financial year, shows that the bank has paid Rs 572 million arising from dividends on restructuring bonds and, approximately Rs 700 million, as VAT payments . "The bank has recorded a 54 per cent overall growth and it shows that we have performed better than last year," said Nanayakkara. "The performance of the bank from 2001 to 2003 demonstrates that it has the potential to grow into a national financial power house. "This reflects the earnings capability arising from the unique size of its customer base, scale of operations, vast outreach and the depth of the loyalty we are engaged in each of the communities, we serve," he added. Referring to the bank's performance, he said that treasury income in 2003 grew by 58 per cent due to successful treasury operations and the ability to leverage on the benefits of reducing interest rates. "The productivity and performance has been managed enabling us to reduce the operating expenses/net income ratio to 70 per cent at the end of 2003." During 2003, the bank decided to invest in a core banking solution at a cost of approximately US $ 10 million, which would enable to replace 5 archaic IT systems. "This has revolutionised our standards and customer services provided to corporate and commercial operations through the head office and top 60 branches," he said. Nanayakkara said, "the bank has had another very good year but the inadequacy of capital remains as a hindrance to its growth. As a social obligation, it has given preference to micro banking to support small entrepreneurs in the country. However, it is anticipating a net profit of Rs 1.7 billion for the year 2004," he added. |
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