People’s Bank safeguards financial stability while achieving record profitability

People’s Bank, one of Sri Lanka’s leading financial services provider, recently announced its highest-ever Profit After Tax of LKR 40.2 billion for the year ended December 31, 2025.In an interview with our staffer from the Daily News Business, the Bank’s Deputy General Manager and Acting Head of Finance, Nilmini Premalal, shared insights into the Bank’s strong financial performance and recent achievements.

Q: People’s Bank has achieved its highest-ever Profit After Tax of LKR 40.2 billion. Could you provide an overview of the Bank’s financial performance over the past year and highlight the key strategies and decisions that contributed to this milestone?

A: A key contributor to this performance has been the structural shift in the Bank’s operating model, with a gradual rebalancing of the loan portfolio from a traditional concentration on State-Owned Enterprises (SOEs) toward a more diversified private sector–focused business mix, including corporates, SMEs and retail customers.

The Bank’s digital transformation initiatives also played an important role. Continued investments in digital banking platforms and channels have enhanced the ease of transacting for customers, expanded digital adoption and improved operational efficiency across the Bank. In addition, prudential risk management, disciplined balance sheet management and focused recovery efforts helped preserve asset quality while strengthening the bottom line of the Bank.

Overall, this record performance reflects the success of the Bank’s strategy to modernise its operations, expand its private sector engagement and leverage digital capabilities, while maintaining strong financial discipline.

Q: What measures has the Bank taken to maintain strong financial stability and ensure the quality of its assets?

A: Over the past year, the Bank further strengthened its credit monitoring, recovery mechanisms and portfolio management practices. Closer engagement with borrowers and proactive restructuring and recovery efforts enabled the Bank to address credit risks in a timely manner while supporting viable businesses during the economic recovery phase. These efforts are clearly reflected in the Bank’s improving asset quality indicators on a year-on-year basis. The Stage 3 loan ratio declined significantly from 10.26% as at end-2024 to 7.66% as at end-2025, demonstrating the success of the Bank’s focused recovery initiatives and strengthened credit discipline. At the same time, the Bank enhanced its financial buffers by increasing Stage 3 provision coverage from 41.49% as at end-2024 to 48.39% as at end-2025, further reinforcing the resilience of the balance sheet.

Overall, these measures reflect People’s Bank’s commitment to maintaining financial stability, strengthening asset quality and building a resilient balance sheet capable of supporting sustainable growth.

Q: In what ways has People’s Bank aligned its financial performance with national economic priorities?

A: People’s Bank has continued to align its financial performance with national economic priorities by supporting key sectors that drive economic growth and financial inclusion. As a leading state bank in Sri Lanka, the Bank plays a vital role in financing priority sectors such as SMEs, agriculture, trade and export-oriented industries, while also facilitating access to credit for individuals and small businesses across the country. The Bank also maintains an extensive island-wide branch network, ensuring access to formal banking services even in remote and underserved areas where private banks or finance companies have limited or no presence.

This expanded reach plays a critical role in promoting financial inclusion and regional economic development. Reflecting its commitment to responsible banking, People’s Bank was recognised as the ‘Sustainable Bank of the Year – Public Sector’ in 2025, highlighting its efforts to integrate sustainability, financial inclusion and responsible financing into its operations.

Through these initiatives, People’s Bank continues to combine strong financial performance with its broader mandate of supporting national development and long-term economic sustainability.

Q: How has the Bank’s focus on digital transformation impacted financial results and enhanced the overall customer experience?

A: Digitalisation has always been a key strategic focus for People’s Bank, as we recognise its importance in enhancing customer convenience, operational efficiency and long-term competitiveness. In recent years, the Bank has invested significantly in modernising its digital banking platforms and expanding mobile and internet banking services, enabling customers to carry out transactions more conveniently and access banking services anytime and anywhere.

The growing adoption of digital channels has also improved operational efficiency by streamlining internal processes, reducing turnaround times and lowering transaction costs, thereby contributing positively to the Bank’s overall financial performance.

These initiatives also support the national ‘Pay Digital’ agenda in Sri Lanka, which promotes wider use of digital payments and the transition toward a more digitally enabled financial ecosystem.

Q: Looking ahead, what initiatives does People’s Bank plan to implement to sustain growth, enhance stakeholder value and promote inclusive economic development in Sri Lanka?

A: Going forward, our main focus will be on expanding our engagement with the private sector, supporting SMEs, trade and export-oriented businesses, while continuing to back national development priorities. At the same time, we’ll keep pushing our digital transformation agenda further, enhancing digital banking platforms, expanding payment solutions and supporting the national initiatives.

Further, we will look to capitalise more on our wide branch network across the country by expanding service offerings, deepening customer relationships and leveraging local insights to better meet the needs of communities across Sri Lanka with the aim of helping promote financial inclusion and regional economic growth.

Finally, People’s Bank will always remain committed to sustainable and responsible banking, integrating environmental, social and governance considerations into everything the Bank does. Through these efforts, we aim to sustain growth while contributing to inclusive economic development across Sri Lanka.

Source: Daily News