Ceylon FT: Pan Asia Bank PLC (PABC) Chairman Nimal Perera said falling gold prices proved a game changer in 2013, but was confident the bank would recoup the sharp loss in profitability this year.
"The deterioration in asset quality was mainly in the pawning portfolio, resulting from the sharp fall in the price of gold. The narrowing of interest rate margins as well as increased provisioning and write-offs contributed to the decline in profitability of the banking sector and for Pan Asia Bank as well.
The direct effect of this impacted on our pawning portfolio adversely proving to be a setback this financial year," he told shareholders in the bank's latest annual report.
"Pan Asia Bank, which held a portfolio of Rs 6.7 billion in Pawning at the beginning of the year, incurred a loss more than a billion as a result of this debacle in prices of gold. However, we are confident of recouping this loss in profitability in the months ahead. Further, the credit squeeze and high interest rates proved dampeners, but lending has eased since," Perera said.
Net profit fell 86.64% during the year to Rs 114.86 million although gross income gained 16.58% to Rs 9.05 billion.
Deposits grew 12.37% to Rs 53.8 billion and the bank's loan book grew 4.52% to Rs 47.12 billion.
Total assets grew 15.77% to Rs 64.9 billion.
Net assets value per share fell 4.37% to Rs 13.72 and earnings per share fell 86.67% to 39 cents.
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"The deterioration in asset quality was mainly in the pawning portfolio, resulting from the sharp fall in the price of gold. The narrowing of interest rate margins as well as increased provisioning and write-offs contributed to the decline in profitability of the banking sector and for Pan Asia Bank as well.
The direct effect of this impacted on our pawning portfolio adversely proving to be a setback this financial year," he told shareholders in the bank's latest annual report.
"Pan Asia Bank, which held a portfolio of Rs 6.7 billion in Pawning at the beginning of the year, incurred a loss more than a billion as a result of this debacle in prices of gold. However, we are confident of recouping this loss in profitability in the months ahead. Further, the credit squeeze and high interest rates proved dampeners, but lending has eased since," Perera said.
Net profit fell 86.64% during the year to Rs 114.86 million although gross income gained 16.58% to Rs 9.05 billion.
Deposits grew 12.37% to Rs 53.8 billion and the bank's loan book grew 4.52% to Rs 47.12 billion.
Total assets grew 15.77% to Rs 64.9 billion.
Net assets value per share fell 4.37% to Rs 13.72 and earnings per share fell 86.67% to 39 cents.
www.ceylontoday.lk
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