People’s Bank has concluded the issuance of Rs. 10 billion in BASEL III Compliant Tier 2, Unlisted, Rated, Unsecured, Subordinated Redeemable Debentures, adhering to the Central Bank of Sri Lanka (CBSL) requirements.
The funds raised are set to enhance the bank’s Tier 2 Capital and bolster its Total Capital Adequacy Ratio, providing a stronger capital base that aligns with regulatory guidelines.
The medium to long-term nature of these debentures, combined with their subordinated status, will support the bank’s capacity for expanded lending, adding a buffer to its regulatory capital in line with BASEL III.
With these proceeds, People’s Bank aims to diversify its lending products and expand its loan portfolio. As Sri Lanka’s second-largest state bank by assets,
People’s Bank reported a consolidated operating income of Rs. 96.8 billion and a pre-tax profit of Rs. 19.3 billion for the fiscal year ending December 31, 2023.
However, the bank’s net interest income declined to Rs. 67.8 billion, a reduction from the previous year’s Rs. 91 billion. This drop reflects the impacts of high-interest costs on deposits and customer interest concessions amid the elevated interest rate environment during 2022 and early 2023.
The Bank expressed satisfaction with the bank’s performance, highlighting resilience in managing economic challenges over recent years. He noted that the bank has successfully navigated the Domestic Debt Optimization program, alleviated rupee liquidity stresses, and advanced regulatory capital growth.
Bnak officials further emphasized the bank’s dedication to supporting national economic progress, particularly as economic indicators begin to show signs of improvement.
Looking forward, People’s Bank is in readiness to support Sri Lanka’s growth trajectory, reinforcing the institution’s role in safeguarding national interests.
The bank’s interest expenses have started to stabilize, aligning with the current interest rate environment observed in late 2023. The Deputy General Manager of Treasury Investment Banking and Financial Institutions, , extended gratitude to investors, noting their confidence was pivotal to the debenture issuance’s success.
He highlighted that the debenture issuance positions People’s Bank to reach an all-time high in capital adequacy by year-end, surpassing the CBSL’s stipulated 13.5% minimum for Domestic Systemically Important Banks noting that the investor response underscores confidence in People’s Bank, which will propel it toward growth objectives.
The People’s Bank Investment Banking Unit (PBIBU), acting as Manager to the Issue, played a crucial role. Established within the bank’s Treasury, PBIBU focuses on fostering Sri Lanka’s capital markets by offering comprehensive services such as financing, advisory, public offerings, debt structuring, and trustee services.
Through these efforts, People’s Bank aims to contribute meaningfully to national economic growth.
