Operating expenses increased by a controlled 4.9% to reach Rs. 37.2 billion. Impairment charges increased by 221% to Rs. 4.4 billion. Relative to peers, the Bank’s and Group’s provisioning policy continues to be conservative with provision coverage at 97.5% and 92.7%, respectively at end 2017. Profit before tax increased by 17.4% to reach a group all time high of Rs. 29.9 billion. On a Bank standalone basis, this was Rs. 25.9 billion representing a 24.5% growth. Group profit for the year increased by 14.2% to reach Rs. 20.5 billion and its return on equity was 21.4%.
On a Bank standalone basis, this was yet another industry benchmark at 26.6%. The Group’s contribution to the Government in the form of taxes, special levy and dividends amounted to Rs. 23.3 billion up from Rs. 22.9 billion in 2016. Customer deposits grew by 16.6% to reach Rs. 1,306 billion whilst customer advances grew by 12.8% to reach Rs. 1,144 billion.
Reflecting the challenging market conditions, gross non-performing loan ratio edged up slightly to 2.0% from 1.9% at end-2016. At the Bank only level, this was maintained at 1.9%.
Basel III Tier I and Total Capital Adequacy Levels were 11.5% and 13.7%, respectively at end-2017 (end 2016 under Basel II: 11.1% and 13.0%). On a Bank standalone basis, this was 10.8% and 13.5%, respectively (end 2016 under Basel II: 9.8% and 12.1%). Liquidity coverage and other Basel III measures were consistently maintained well above the minimum requirements.
Commenting on the results, People’s Bank Chairman Hemasiri Fernando said: “Our all-round successes are owed to our customers and our valued employees. It reflects the Bank’s capacity and willingness to consistently push the limits of performance even amidst challenging circumstances. Not complacent with our successes, we remained focused on our future. There are currently several technology driven initiatives in process which, once complete, will further augment our capabilities at both at a customer front and an operational back end. In terms of near term goals, expediting the Cabinet of Ministers approved amendments to the People’s Bank’s Act is our foremost priority. As it stands, this is the limiting factor to be addressed to enable the Bank fully realise its real growth potential.”
Chief Executive Officer/General Manager N. Vasantha Kumar said: “2017 was an exceptional year for the Bank. Record top and bottom line numbers attest to the collective effort of our entire team on a day in day out basis. Successes stemmed from every aspect of operations – be from a retail and corporate banking perspective, to an improved product service delivery capability, enhanced collection and recovery due processes, Treasury successes and those which stemmed from process refinements and improved regulatory capital and risk control. Amongst all, our 2017 highlight is our digital roll out. Our leadership on this front remains best described in a significant number of conventional to digital branch conversions since first rolled out and over 100 Self Banking Units now established island-wide. For us, this is just a start with further roll-outs and new digital offerings lined up in the near term. Our objective is to offer all customers the benefit of limitless banking possibilities by enabling a truly digital experience.”
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