Aug 25, Colombo: Pan Asia Banking Corporation PLC has reported Rs.753.7 million in profit after tax for the six months ended in June 30, 2019 (1H'19) amidst a period of multiple challenges.
In the quarter ended in June 30, 2019 (2Q'19), the bank reported earnings of Rs.481.6 million, down 5 per cent from the same quarter last year, the bank said in a media release.
The bank saw its growth moderating during the period as the crisis in the general economy and the weak business and consumer sentiments took a toll on the bank's business and financial performance.
The general uncertainty that was created after the Easter attacks on April 21 marred the business environment which weighed on the bank's performance as the demand for new loans were severely affected by same. The bottom-line for the six months recorded 8 per cent decline from the corresponding period in 2018.
Meanwhile the Net Interest Income (NII) - the difference between the interest paid for the deposits and borrowings and the income from loans and other investments - rose by a marginal 5 per cent to Rs.2.97 billion over the same period last year.
"The marginal increase in the NII could be attributed to the weak growth in new loans which is capable of generating new interest income and the falling yields of gilt-edged securities which had a bearing on the yield from the bank's liquid asset portfolio. This also caused the commission incomes also to narrow by 4 per cent on year to Rs .707.8 million as a larger segment of the fee incomes are connected to the credit. The bank had a loan book of Rs. 110.3 billion as of June 30, down from Rs. 113.5 billion in the beginning of the year," it said.
Deposits too contracted marginally to Rs117.8 billion.
The bank said it expects the margins to improve and the loan growth to pick up during the second half, and more specifically from the final quarter of the year once the recent monetary policy adjustments transmit fully into the real economy.