Business

People’s Bank resilient amidst extraordinary distres

Published

4 years ago

2022/05/30

Says challenges likely to persists over the short term

People’s Bank yesterday announced the results for the quarter ended March 31, 2022 with consolidated total operating income growing by 51.9% to reach LKR 42.6 billion, whilst total operating expenses increased by only 0.3% to LKR 13.1 billion despite inflationary pressures; reflecting sound cost control and efficiency improvements being undertaken on an ongoing basis. Consolidated pre-tax profit amounted to LKR 11.0 billion; representing a growth of 9.8% over the same period of 2021.Net interest income, which accounted for 71.4% of the Group’s total operating income during Q1-22, grew by 29.2% to reach LKR 30.4 billion reflecting both asset growth and net interest margin improvements to 4.1% from 3.6% in Q1-21. Excluding the LKR 3.4 billion in foreign exchange net gains recognized during the period as a result of the rupee devaluation, non-interest-based income accounted for over 20.0% of total consolidated operating income during Q1-22 as compared with 13.0% in Q1-21; reflecting efforts to also improve other sources of income. From a cost to income perspective, primarily reflecting top line growth and cost control, the Group’s cost to income ratio was 38.2% during Q1-22 as compared with 54.9% during the same period of 2021.

Consolidated impairment charges rose during the period reflecting macro-economic developments, including – amongst other – the negative impact arising from the rupee devaluation and the higher expected credit losses from key customer segments of the Group. Consolidated profit after tax was LKR 7.4 billion, dropping by 12.9% over the same period 2021 whilst, on a Bank standalone basis, profit after tax was LKR 5.5 billion up 1.1% over Q1-21. Consolidated return on assets was 1.48% during the period as compared with 1.42% during Q1-21.Consolidated deposits grew by 6.2% to reach LKR 2.3 trillion with CASA maintained at close to 40.0% levels. Consolidated net loans reached LKR 2.0 trillion. Stage 3 loans as a function of total gross loans increased during the period both on a Bank standalone and consolidated basis reflecting stressed macro-economic circumstances. Consolidated assets reached LKR 3.1 trillion; expanding by 10.6% with the rupee devaluation adjusted growth being close to 5.0%. Tier I and Total Capital Adequacy was 12.0% and 16.1%, respectively at end March 31, 2022 as compared with 13.4% and 17.9% at end 2021. On a Bank standalone basis, these were 11.0% and 15.7%, respectively (end 2021: 12.6% and 17.8%); either of which without any reliefs or other exceptional adjustments being considered.

Commenting on the results, Chairman of People’s Bank, Sujeewa Rajapakse said: “Times are extraordinary with the macro stresses clearly unprecedented. The Bank’s results however provide insight into its financial strength and capacity to navigate through these challenging circumstances. Needless to say, like for most other, the lack of foreign currency reserves in the country – is the Institution’s key source of distress. As a Domestically Systematically Important Bank with a broader national role – the Institution played a leading role post COVID 19 to support the Government and the country’s internal eco system function without any interruption by supporting, amongst many other, bulk of the country’s essential imports such as petroleum, pharmaceutical, coal and fertilizer. To ease pressure from the Bank’s standpoint, several measures are currently being explored in coordination and support of its key stakeholders”

Chief Executive Officer/ General Manager of People’s Bank, Ranjith Kodituwakku said: “The challenges are clearly unlike any seen in the past, which are likely to persists over the short term – at least. From both a business and operational standpoint, we have intensified our focus on few key areas. On a business front, considering the volatile interest rate environment and the inevitable pressure on net interest margins as now seen, we have increased our focus on non-interest-based income sources and, considering the country’s foreign currency shortfall, we are in the process of expanding our foreign inward remittances platform and footprint. In addition, as a crucial element to the country’s economic revival – we have allocated greater resources to support Small and Medium Scale Enterprises and certain other economy critical market segments.

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Business

Super El Niño threatens to deepen Sri Lanka’s drought and economic woes

Published

11 hours ago

2026/09/4

Thilina Walpola

By Ifham Nizam

A potentially dangerous El Niño is gathering strength across the Pacific, with the World Meteorological Organization (WMO) warning that the climate event is expected to become very strong and continue into February 2027, raising the risks of drought, floods, extreme heat and major disruptions to rainfall patterns worldwide.

The warning has particular significance for Sri Lanka, where communities in several agricultural districts are already facing severe drought, depleted water sources and shrinking farm incomes.

The WMO said yesterday that forecasts from its Global Producing Centres show an “exceptionally high likelihood of nearly 100%” that El Niño will persist through February next year. The organisation said this is the first time one of its El Niño/La Niña updates has been so unequivocal, reflecting strong agreement among forecasting systems.

The event, driven by exceptionally warm waters in the tropical Pacific, is expected to strengthen further in the coming months, reach very strong intensity and peak towards the end of this year. Its climate impacts, however, are expected to continue well into 2027.

According to Meteorological Organization

Sri Lanka is already experiencing the consequences.

A Reuters report published on Wednesday from drought-affected areas said rainfall deficits of between 85% and 100% have been recorded in important farming regions including Ampara and Monaragala.

Wells, tanks, rivers and lakes have dried up, while tens of thousands of people are depending on government water deliveries, with some remote communities reportedly waiting up to 23 days for supplies.

The drought is also rapidly becoming an economic problem for rural communities. Croplands have withered, livestock operations have been affected and farmers who have lost their harvests are being forced to seek daily-paid employment to survive.

The latest WMO outlook also warns that the consequences of El Niño will not necessarily be uniform. The severity and timing of impacts in individual countries depend on geography, season and other climate drivers, including conditions in the Indian and Atlantic oceans.

For Sri Lanka, the Indian Ocean Dipole (IOD) will therefore be crucial. The WMO expects a positive IOD to develop, with a September-November seasonal mean of about 0.9°C. This could modify the normal influence of El Niño on rainfall over the region.

That creates another potential risk for Sri Lanka: the country may have to prepare not only for continued drought but also for episodes of intense rainfall, flooding and landslides later in the year. Climate variability increasingly means that a prolonged water shortage can be followed by sudden and destructive rainfall rather than a gradual return to normal conditions.

For Sri Lanka, the warning should therefore be viewed as an economic and national-planning issue, not simply a meteorological forecast. Agriculture, drinking water, electricity generation, food imports, public expenditure and rural livelihoods could all be affected.

Business

ABC Trade & Investment – All-China Environment Federation partner to drive Sri Lanka’s green infrastructure and investment

Published

11 hours ago

2026/09/4

Thilina Walpola

ABC Trade & Investments (Pvt) Ltd, a leading homegrown conglomerate in Sri Lanka’s ICT distribution and diversified business landscape, has formally entered into a strategic Memorandum of Understanding (MoU) with the All-China Environment Federation (ACEF). The partnership establishes a collaborative framework aimed at accelerating new-energy development, water management, and environmental protection projects across Sri Lanka.

The agreement bridges advanced Chinese engineering capabilities, equipment, technical expertise, and investment resources with ABC Trade & Investments’ local operational strength, market insight, and project implementation skills. By pairing international technology with on-the-ground execution, the initiative is designed to address Sri Lanka’s long-term environmental and civil infrastructure priorities.

The MoU was signed by Amalrajah Jayaseelan, Director/CEO of ABC Trade & Investment (Pvt) Ltd, and Shi Xiang, Secretary-General of the Belt & Road Eco-Industry Cooperation Working Committee of ACEF. The signing took place during the China–Sri Lanka Environmental & Energy Exchange and Cooperation Meeting at the Nondescripts Cricket Club Grounds in Colombo, held under the theme “Empower Green Development, Jointly Build a New Pattern of China–Sri Lanka Environmental & Energy Industry.”

Business

Heavy buying interest slows down stock trading

Published

11 hours ago

2026/09/4

Thilina Walpola

By Hiran H. Senewiratne

The CSE yesterday was very active at the outset but later slowed down due to heavy buying interest noted for select stocks.Amid those developments both indices moved upwards. The S and P SL20 went up by 23.73 points. Turnover stood at Rs 2.44 billion with 10 crossings.

The crossings were: Renuka Foods 19 million shares crossed for Rs 502 million; its shares traded at Rs 25.30, Dipped Products 1.9 million shares crossed to the tune of Rs 117 million; its shares traded at Rs 60.50, JKH 3.9 million shares crossed for Rs 78 million; its shares sold at Rs 19.70, Dialog Axiata 1 million shares crossed to the tune of Rs 46.6 million; its shares traded at Rs 46.40, Tokyo Cement 500,000 shares crossed for Rs 39.5 million; its shares sold at Rs 79 and Watawela Plantations 800,000 shares crossed for Rs 34 million; its shares were Rs 42.50 each.

In the retail market companies that mainly contributed to the turnover were; Vallibel Finance Rs 281 million (3.3 million shares traded), Dipped Products Rs 114 million (1.9 million shares traded), Haycarb Rs 90 million (424,000 shares traded), Alumax Rs 42 million (2.6 million shares traded), HNB Rs 38.5 million (102,000 shares traded), Swisstec Rs 30 million (506,000 shares traded) and Sierra Cables Rs 34 million (880,000 shares traded). During the day 118 million share volumes changed hands in 17802 transactions.

It is said that mixed market reactions were noted during the day. Financial sector, especially Vallibel Finance, performed well, while the manufacturing sector, especially JKH and Hayleys , performed significantly.

Meanwhile, Co-operative Insurance Company announced the redemption of 1,100,000 cumulative redeemable preference shares issued in December 2020 to the Health Department Co-Operative Thrift & Credit Society.

The total redemption consideration of Rs 16.61 million, including a 9 percent per annum cumulative dividend, is set for settlement on August 31, 2026.

Yesterday the rupee was quoted at Rs 328.25/35 to the US dollar in the spot market, stronger from Rs 328.30/60 the previous day, while bond yields were somewhat steady, dealers said.