Wednesday, October 27, 2010

Sri Lanka Pan Asia Bank Sept net up 87-pct

Oct 26, 2010 (LBO) - Sri Lanka's Pan Asia Bank net profit for the September 2010 quarter rose 87 percent to 129 million rupees from a year ago as interest costs fell and non-interest income rose, a stock exchange filing said.

Interest income fell two percent in the September 2010 quarter to 776 million rupees while interest expenses fell 19 percent to 362 million rupees, resulting in net interest income rising 22 percent to 414 million rupees.

Interest expenses on deposits fell 25 percent to 312 million rupees during the period, the interim accounts filed with the stock exchange showed.

The bank's interest margin fell to 6.35 percent at the end of September 2010 from 6.42 percent at the beginning of the year.

After-tax return on assets fell to 1.57 percent from 1.94 percent and return on equity fell to 15.88 percent from 20.86 percent over the same period.

Non-interest income rose 93 percent to 200 million rupees while provision for bad loans fell 83 percent to 9.5 million rupees.

Pan Asia Bank's basic earnings per share rose to 1.02 rupees in September 2010 from 0.62 rupees the year before.

Claude Peiris, chief executive of PABC, attributed the higher quarterly profit to "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," he said in a statement.

During the quarter, Pan Asia Bank increased the branch network to 38 branches by adding three branches.

The bank plans to open more branches in the outlying towns of Matale, Batticaloa, Ambalangoda, Kalmunai and Killinochchi in the fourth quarter, with plans to expand further in key towns and suburbs in 2011.

PABC's total performing loans and advances rose to 15.9 billion rupees as at September 30, 2010 from 9.9 billion rupees at the beginning of the year while total deposits rose to 18.9 billion rupees from 16.4 billion rupees.

However, net profit in the nine months ending September 30, 2010 fell 24 percent to 280 million rupees from the previous year when the bottom line was buoyed by gains from investments in government securities.

Net interest income increased by 14.5 percent to 1,130 million rupees in the nine months.

But non-funds based income fell to 390.4 million rupees from 596 million during the period, all of the decrease being attributable to gains on fixed income securities in 2009, the statement said.

Costs increased by 21 percent in the nine-month period 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 218.6 million rupees last year to 25.4 million rupees in 2010, reflecting more structured credit and recovery policies," the bank said.

Tier II capital adequacy ratio stood at 15.8 percent, which "augers well for the bank’s expansion plans," the statement said.

source -

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