To reposition as “The Bank of the People’s Private Sector’

People’s Bank goes for new corporate strategy

State giant, People’s Bank will be formulating a new corporate strategy to further bolster its performance.

Part of the new strategy is also to reposition the Bank as “The Bank of the People’s Private Sector.”

Enjoying the largest customer base and distribution network in the country, the Bank has during the past few years, undergone extensive and successful restructuring programme.

The new corporate strategy and re-positioning intends to propel the Bank to an even more aggressive development phase in line with its next medium term business plan starting from 2009 to 2014.

The Bank last week called for expression of interest from top firms or individuals who have extensive experience including international exposure, of having done similar corporate strategies. Such firms and individuals should have sound knowledge on structures, working cultures, and legal framework of large public sector banks or other large financial institutions. They should also posses up to date knowledge on key technological and other developments within and outside the banking industry that would impact future viability of the business.

People’s Bank intends to select a competent party to do the corporate strategy by end this month or early January.

People’s Bank has become a case study for how a state owned venture could be turned around with effective management.

“With the next plan in motion, People’s Bank whilst being state owned will become truly world class in all aspects,” General Manager and CEO Asoka de Silva told The Bottom Line in an interview last month.

The Bank has the biggest customer base (over 10 million) and the widest reach in the country with 324 branches, 306 service centres and 140 ATMs as of March 2007.

The Bank’s income had grown from Rs. 23.1 billion in 2003 to Rs. 35 billion in 2006 while operating income grew from Rs. 13 billion to Rs. 19.5 billion last year. Operating profit amounted to Rs. 4 billion from Rs. 1.5 billion in 2003 while profit after taxation was Rs. 3.1 billion, as opposed to Rs. 1.5 billion in 2003.

Balance sheet wise, assets have grown from Rs. 220 billion to Rs. 339 billion while liabilities amounted to Rs. 328 billion. A key achievement is reserves which were negative Rs. 1.2 billion in 2003, was converted a positive figure of Rs. 10.4 billion last year.

Deposits (through innovative accounts such as Jana Jaya, Vaanitha Vasana, Sisu Udana, YES), had increased from Rs. 115 billion to Rs. 270 billion while loans and advances have swelled from Rs. 102 billion to Rs. 223 billion. Total Non Performing Advances, (which is a bad legacy inherited by the Bank), in 2001 amounted to Rs,. 25 billion, but since then has come down to Rs. 16 billion in 2006.

Fitch Ratings Lanka last month also affirmed the National Long-term rating of People’s Bank (Sri Lanka) (PB) at ‘A-(lka)’ (A minus(lka)) reflecting the expected level of support available from the Government of Sri Lanka (GOSL) due to its state ownership, systemic significance and strategic importance to the state.