People’s Bank of Sri Lanka capped off 2023 with a consolidated operating income of LKR 96.8 billion and a pre-tax profit of LKR 19.3 billion. Despite facing headwinds, the bank demonstrated resilience and strategic execution.
A key challenge was managing high interest costs on term deposits, a legacy of the high-interest rate environment in 2022 and early 2023. Additionally, the bank offered significant interest concessions to customers to stimulate the economy. These factors led to a decrease in consolidated net interest income, down to LKR 67.8 billion from LKR 91.0 billion the previous year. However, there are positive signs: the last quarter of 2023 showed improvement as interest expenses began to normalize.
People’s Bank found success in other areas. Consolidated net fees and commission income grew by 11.0% compared to 2022, excluding extraordinary items. The bank also kept a tight lid on operating expenses, with a modest increase of just 5.5% despite inflationary pressures. This reflects their commitment to cost control and efficiency, exceeding industry benchmarks.
Deposit growth remained healthy, with total consolidated customer deposits increasing by 12.0%. However, loan growth was more subdued. Rupee loans grew by only 1.4%, and total consolidated net loans actually contracted by 4.0%. This can be partly attributed to the appreciation of the Sri Lankan rupee, which reduced the value of the bank’s foreign currency loan portfolio when measured in rupees.
People’s Bank’s total consolidated assets reached LKR 3,208.2 billion by year-end, up from LKR 3,133.1 billion in 2022.
Bank and Group Chairman Sujeewa Rajapakse highlighted their achievements: successfully navigating the initial phase of the Domestic Debt Optimization program, improving rupee liquidity, strengthening regulatory capital, and driving significant growth across digital platforms. These accomplishments were made while prioritizing national interests and customer service.
Chief Executive Officer Clive Fonseka emphasized their strategic shift in 2023, focusing on rebalancing the business model, integrating technology, and accelerating the move towards digital platforms. He pointed to the bank’s proactive approach, innovation, and adaptability as key to their success in these areas.
Looking ahead, People’s Bank plans to build on this momentum, further streamlining operations and enhancing efficiency across all areas of the business.