Pan Asia Bank doubles 1Q’15 net profits

Teller · 1 Pan Asia Bank doubles 1Q’15 net profits Mon May 25, 2015 12:29 am

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Pan Asia Banking Corporation PLC (PABC) has posted a net profit of Rs.177 million for the quarter ended March 31, 2015 (1Q’15), up 106 per cent from a year earlier.

The growth in the profit before tax was 231 per cent year-on-year (yoy) to Rs. 270.2 million, the bank said in a media release.

The bank has been able to record this commendable performance due to the growth of its loan book coupled with expanding net interest margin. This has also been amply assisted by the cost discipline demonstrated throughout in delivering its services. Pan Asia Bank closed the 2014 financial year expanding its loan book by 34 per cent, among the highest credit growths by a licensed commercial banks in the country, which continued to 1Q’15 as well, the release said.

Teller · 2 Re: Pan Asia Bank doubles 1Q’15 net profits Mon May 25, 2015 3:35 am

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THIS IS THE HIDDEN SIDE.......Pan Asia Bank (PABC) has submitted its restructuring plan to regulators to request approval and the bank is also actively preparing for further reform and further capital injection, the bank and Central Bank sources confirmed.
Our plan is already with the Central bank, that's all we can say at the moment, the PABC CEO Dimantha Seneviratne told.

Earlier, the Central Bank proposed that PABC merges with Sampath Bank under the previous government's Financial Sector Consolidation Process, but, Dhammika Perera related parties declined to respond to the proposal.
According to Central bank sources, the bank plans to fulfil their capital requirement with its natural growth and future profitability.
"They need an extra capital. They hope that they can fulfil that extra amount with existing shareholders, CB sources said.
Central Bank already restricted its major shareholder Dhammika Perera's voting rights up to 10%, even though he is having 29.99 % of voting shares.
Last Friday, Fitch Ratings Lanka has revised Sri Lanka-based Pan Asia Banking Corporation PLC's (PABC) Outlook to Negative from Stable.

Fitch sees a high risk that PABC will not meet the Central Bank of Sri Lanka's .minimum Tier 1 capital target of Rs 10 billion for licensed commercial banks by 1 January 2016. PABC's Tier 1 capital unadjusted for deductions stood at Rs 4.5 billion at end-March 2015.
The PABC is also expecting favourable response from central bank to fulfill that Tier 1 capital deadline targets, the sources said.
"Fitch will closely monitor how PABC positions itself to meet this requirement. The bank's Fitch core capital ratio declined to 8.6% as at end-1Q15 from 9.5% at end-2014 and 10.1% at end-2013." The Fitch report said.

PABC's asset quality remains significantly weaker than the industry average, with a reported gross non-performing loan ratio of 6.4% at end-1Q15 after a slight improvement to 5.7% at end-2014 from 8% at end-2013 as a result of lower exposure to pawning. Fitch is of the view that the bank's aggressive loan growth with greater exposure to retail and SME customer segments, which are more susceptible to economic conditions, could exert pressure on its asset quality, the report raveled.
"PABC's rating would remain at the current level if it is able to significantly and sustainably improve its capitalization, mostly likely through a timely capital infusion and slower growth in its loan book."
Failure to reverse the trend of capital erosion by end-2015 and to materially enhance its loss absorption buffers would lead to a downgrade. Fitch said

Teller · 3 Re: Pan Asia Bank doubles 1Q’15 net profits Mon May 25, 2015 3:38 am

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NOTE-minimum Tier 1 capital target of Rs 10 billion for licensed commercial banks by 1 January 2016. PABC's Tier 1 capital unadjusted for deductions stoJod at Rs 4.5 billion at end-March 2015. think how they will achieve 1 billion. Right issue is sure.