Pan Asia Bank ups PAT by 180% to over Rs. 1 b in 1Q

PAN Asia Banking Corporation PLC has reported an impressive financial performance for the first quarter of 2025 amidst diverse challenges emerging from the gradually reviving but challenging macro-economic environment.

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In financial terms, the bank witnessed another quarter of growth and profitability, with an increase in Profit After Tax (PAT) of 180%. This growth is reflective of the robust portfolio management, effective cost management and commitment to generating sustainable profits. As a result, the bank ended 1Q 2025 with a PAT of Rs. 1.02 billion to report an Earnings per Share (EPS) more than doubled to reach Rs. 2.30. The bank's robust performance was complemented by the ability to navigate external challenges adeptly.

The bank's unwavering commitment to asset quality was reflected in maintaining one of the lowest Stage 3 Loan Ratios in the industry of 2.79% as of 31 March 2025, a testament to our rigorous credit risk management and underwriting standards. While the government-imposed restrictions on recoveries posed headwinds, the bank proactively refined our recovery strategies to minimise the impact. Meanwhile, the bank's Stage 3 Provision Cover improved to 61.50% as of 31 March 2025 from 60.10% as of last year end due to prudential impairment provisioning on borrowers/sectors which exhibited financial distress.

Since the latter part of 2023, the market interest rates for both lending and deposits have gradually come down in line with the policy decisions taken by the Monetary Board of CBSL to reduce the policy rates couple of times. Thus, the bank's interest income for 1Q 2025 has decreased by 9% compared to the corresponding period last year, due to its response to the market conditions even in a situation of increased average loan portfolio. Also, the interest expense for 1Q 2025 has decreased by 17% against the interest expense for 1Q 2024 due to low interest rates prevailed despite the strong growth in average deposit book. Consequently, the net interest income has increased by 5% during 1Q 2025 as the drop in interest expense outpaced the drop in interest income.