Pan Asia Banking Corporation PLC reported the best ever financial results in the 9 month period ended 30th September 2020 to report a Pre-tax profit of Rs.1,864.84 million and a Post tax profit of Rs.1,250.33 million, recording an impressive growths of 47% and 22% respectively demonstrating resilience amidst challenging conditions.
Meanwhile, the Bank’s operating profit before taxes on financial services increased by 19% reflecting excellence in core banking performance and cost containment measures, although the bank’s fee based income dropped due reduced business volumes due to disruptions caused by COVID 19 pandemic and waiver of fees and charges.
The Bank’s Earnings per Share (EPS) for 9 month period rose to Rs.2.83 from Rs.2.31 in the comparative period. The Bank’s Net Asset Value per Share increased by 10% during 9 month period to reach Rs. 33/- as at 30th September 2020.
The Bank continue to build extra provision buffers for probable deterioration in credit quality, through use of higher probability weights for worst-case scenarios, management overlay adjustments and use of macroeconomic factor projections published by credible sources for collective impairment modelling. As a result, total impairment charges for the quarter increased by 65% to record Rs. 553.52 million compared to Rs 335.64 million during the same period a year ago.
The Bank’s growth in both profit before income tax and profit for the period was also supported by the low financial services taxes regime prevailed throughout the current quarter. Meanwhile, the Bank continued to compute income tax and deferred tax liabilities at the rate of 28% as the proposed new rate of 24% is yet to be legislated.
The Bank’s net interest margins improved from 4.36% to 4.42% during past 9 months which is a commendable feat given the income loss due to loan moratorium, the industry wide deterioration in credit quality and steps taken by the government to bring down market interest rates. Meanwhile, the Bank’s pre tax Return on Assets remained intact at 1.51% in 2020.
The Bank strived for revenue optimisation through portfolio re-alignment and cost management despite sector vulnerabilities that prevailed during 2020. The Bank’s cost to income ratio improved from 52% to 48% during the period under review owing to the excellent core banking performance which reflected in the noteworthy growth in net interest income and measures taken to contain overhead costs.
The Bank’s total asset base stood at Rs.173.13 billion as at September 30, 2020 after posting a growth of over 13% supported by the expansion in gross loans and advances and other financial instruments at amortized cost. Meanwhile, the Bank’s gross loans and advances book recorded a strong growth of over 9% to reach Rs.121 billion.
Customer deposits recorded a commendable growth of over 12% to reach Rs. 137.60 billion. The Bank’s CASA base grew by Rs.11.88 billion phenomenally during the period under improving the CASA ratio by over 650 basis points. The Bank’s gross non performing loan ratio slipped marginally from 6.31% to 6.38% during the period under review, while net non performing loan ratio improved from 2.82% to 2.20% due to prudential provisioning.
The Bank maintains all capital and liquidity ratios well above the regulatory minimums. The Bank’s total capital adequacy ratio improved from 14.31% to 15.11% during the period under review.
Meanwhile, the Bank’s Liquidity Coverage Ratios (LCR) under BASEL III stood above statutory minimum of 90% at the quarter end. The Bank maintained LCR ratios of 205.07% and 173.84% for all currencies and LKR respectively.