Thursday, October 28, 2010

Pan Asia Bank shows significant progress in the 3rd Quarter

Upgrade in Fitch Rating to BBB (lka)

Pan Asia Bank announced a Profit after Tax of Rs. 279.9Mn for the nine months ended at 30 September 2010. The Profit after Tax for the same period last year was Rs. 368.1Mn, mainly due to the gains from government securities. The 3rd quarter showed a Profit after Tax of Rs.129.1Mn compared to Rs.150.8Mn in the first two quarters of 2010. Profit before tax for the nine months ended September 2010 was Rs.704.6Mn compared to Rs.710.0Mn last year.

Net Interest Income increased by 14.5%, from Rs.986.5Mn to Rs.1,129.9Mn, while non-funds based income decreased from Rs.595.8 Mn to Rs. 390.4 Mn, all of the decrease being attributable to gains on fixed income securities in 2009. While costs increased by 20.9% mainly due to the increased cost of running a bigger branch network and higher staff numbers and volumes of business, there was a significantly positive trend in provisions which decreased from Rs.218.6Mn last year to Rs. 25.4Mn in 2010, reflecting more structured credit and recovery policies .

During the year, Deposits increased by 15.9% from Rs. 16.3Bn to Rs. 18.9Bn, while Net Loans and Advances also grew by 53.8% to Rs.16.7 Bn. The Net Non-performing advances decreased by 17.1% from Rs.957.2Mn to Rs.793.2Mn, while the Net NPL ratio improved to 4.6% from 8.3%. The trends are very positive and it is expected that there will be further improvements in the 4th quarter.

Tier II Capital Adequacy ratio stood at 15.8%, which augers well for the Bank's expansion plans. The improved profitability and the steady progress shown by the Bank will ensure that the enhanced capital adequacy requirements for 2011 and beyond will be comfortably met from internal sources. The commendable progress shown during the year has been recognized by Fitch Sri Lanka who have upgraded the Bank's rating to BBB (lka). Mr. Claude Peiris Chief Executive Officer said that "We are pleased with the accelerated progress in the quarter as a result of the strategic initiatives implemented over the last few months.

 There is now much greater focus in what needs to be done in growing the business and we are confident that the Bank has now started showing the momentum required to see greater results in the fourth quarter of the year."

During the quarter, Pan Asia Bank increased the branch network to 38 branches with the opening of their latest branch in Embilipitiya. Matale, Batticaloa, Ambalangoda, Kalmunai and Killinochchi will be opened in the 4th quarter, with plans to expand further in key towns and suburbs in 2011.

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