Despite the country’s escalating economic and related instabilities, recently issued bank financials show a clear decline in bank profits in Sri Lanka. The report below shows how Sri Lanka’s licensed banks performed over the year.
The annual financials issued by Licensed Commercial Banks (LCBs) during the past week indicated that banks had endured a drop in profitability due to the poor economic climate.
Hatton National Bank PLC (HNB) posted Rs. 15.7 billion in group Profit After Tax (PAT) during 2022, a drop of Rs. 4.3 billion from the previous year.
The bank recorded a PAT of Rs. 14 billion compared to Rs. 17.3 billion recorded in 2021, while the group recorded a PAT of Rs. 15.7 billion compared to Rs. 20 billion in 2021. This resulted in a Return on Assets (ROA) of 0.9% and a Return on Equity (ROE) of 9% for the bank.
DFCC Bank PLC reported a Profit Before Tax (PBT) of Rs. 2,439 million and a PAT of Rs. 2,513 million for the year ended 31 December 2022, against a PBT of Rs. 4,326 million and a PAT of Rs. 3,222 million in the previous year.
The group recorded a PBT of Rs. 3,112 million and PAT of Rs. 3,042 million for the year ended 31 December 2022 as compared to a PBT of Rs. 4,859 million and a PAT of Rs. 3,665 million in 2021.
National Development Bank PLC (NDB) recorded a profit attributable to shareholders of Rs. 3 billion at the group level, whilst post and pre-tax profits at the bank level closed in at Rs. 2.9 billion and Rs. 2 billion for the financial year 2022.
Compared to 2021, these were negative growth rates of 56%, 54%, and 80% respectively, the continuation of year-long and industry-wide profit deceleration attributable to the macroeconomic shocks that severely impacted the banking sector, including large impairments.
Meanwhile, Sampath Bank issued a statement noting that it had registered a PBT of Rs. 15 billion and a PAT of Rs 13.1 billion for the year that ended on 31 December 2022 compared to a PAT of Rs. 12.5 billion in the previous year, a marginal growth.
Pan Asia Banking Corporation PLC reported a pre-tax profit of Rs. 650 million, which was weighed down by higher credit loss expenses and exchange losses on loans and advances and foreign currency-denominated financial instruments of the Government for the year that ended on 31 December 2022.
Impairment charges for loans and other losses, one of the most intense challenges that the banking sector is grappling with, continue to rise.
Source : themorning