Steady Progress

May 24, 2006 (LBO) – People's Bank, Sri Lanka's second-largest state bank in terms of assets, said group net profits for the three-months to March 31 rose 22.1 percent to 926.23 million rupees. The technically insolvent bank said Wednesday that its net profits were up 14.3 percent to 774.19 million rupees during the period under review, helped by a sustained deposit base growth, while a restructuring process that began in 2001 also continued to help the bank streamline its operations and focus on profitable areas.

The bank's net interest income rose 29.4 percent to 7.58 billion rupees, while net interest expenses gained 33.8 percent to 3.50 billion rupees, during the period under review.

"We also set aside 39.28 billion rupees as provision for market to market our bond portfolio as part of our good house keeping practices," the bank's Head of Finance, Bertal Pinto-Jayawardene told LBO.

People's Bank's loan book gained 3.4 percent to 191.92 billion rupees, which pushed total assets up 4.6 percent to 287.91 billion rupees.

Deposit base, however, remained flat at 228.31 billion rupees.

The bank didn't provide a net profit forecast for 2006.

People's Bank is currentl