Profits Mirage

Ishara S. Kodikara | AFP | Getty Images Sri Lanka Prime Minister Ranil Wickremesinghe, center, speaks to supporters at the prime minister's official residence in Colombo on December 16, 2018, after he was reappointed as prime minister by Sri Lanka's president, the same man who fired him from the job nearly two months ago.

Peoples Bank reported a billion rupee in profits last year, the largest in its history.
The bank has managed to now cut in half its negative net worth over the last two years. rn

rnBut top management in an exclusive interview warned that profit numbers were not entirely due to an improvement in the banks performance.rn

rnldblquote This profit is not entirely due to the inherent ability of the bank. There are extraneous factors. In 2002 the govt deliberately started reducing interest rates. Since there is a timing difference between borrowing rates and lending rates banks made money,
dblquote explains the Chairman of the Peoples Bank Lal Nanayakkara.rn

rnBut the bank is still saddled with a large number of non-performing loans (NPLs).rn

rnNPL levels that stand at 23 percent now are expected to come down to 20 percent during this year.rn

rnldblquote In early 2002 it was abut Rs. 24 bn. Out of which 15% we have provided for. Exposed part was Rs. 10 bn. We launched a vigorous campaign to colle