April 30, 2009 (LBO) – Sri Lanka’s Pan Asia Bank said March quarter net profit rose 39 percent to 92 million rupees from a year ago, helped by a sharp rise non-interest income and steady growth in net interest income. The profit growth came despite sharply higher provisions for bad loans and a contraction in the bank’s loan portfolio and deposit base, analysts said.
Pan Asia Bank said in a stock exchange filing interest income went up 27 percent to 806 million rupees while interest expenses rose 26 percent to 508 million rupees, with net interest income up 29 percent to 299 million rupees.
Non-interest income more than doubled to 194 million rupees, driven by a 135 percent rise in other income to 167 million rupees while foreign exchange income rose 15 percent to 27 million rupees.
Much of the bank’s credit is in the high-margin trade finance business.
Provision for bad loans rose 457 percent to 82 million rupees for the three months ending March 31, 2009.
Pan Asia Bank also said specific provision shot up 510 percent to 85 million rupees.
Net loans and advances were at 11.8 billion rupees as at March 31, 2009, down from 12 billion rupees as at December 31, 2008.