Pan Asia Bank reported a profit after tax of Rs. 2.5 billion for the first half of 2026, representing 16% growth year-on-year, as the institution surpassed Rs. 350 billion in total assets for the first time in its 31-year history.
Pan Asia Banking Corporation PLC achieved a significant financial milestone in the first half of 2026, posting a profit after tax of Rs. 2.5 billion while its total asset base exceeded Rs. 354 billion for the first time. The bank's expansion was underpinned by strong growth across its core lending and deposit franchises, with gross loans and advances increasing 14% to Rs. 248.13 billion and customer deposits rising 17% to Rs. 271.24 billion.
The bank's revenue generation demonstrated broad-based strength, with net interest income growing 13% to Rs. 7.07 billion and net fee and commission income surging 28% to Rs. 1.50 billion. However, the net interest margin moderated to 4.29% from 4.55% in the corresponding period of 2025, primarily due to lower returns from government securities reflecting market yield movements. Meanwhile, net gains from trading and other investment-related income declined significantly, with trading gains falling 31% and gains from financial asset derecognition dropping 74%, attributed to upward movements in Treasury bill and bond yields.
The bank maintained disciplined risk management practices, improving its asset quality metrics substantially. The gross stage 3 loan ratio improved to 3.97% from 4.62%, while the net stage 3 loan ratio improved to 1.39% from 1.73%. Notably, the bank increased impairment charges by 32% during the period as a prudential measure, enhancing its provision buffer against potential credit risks amid evolving economic conditions. The stage 3 provision coverage ratio strengthened to 64.92% from 62.63%.
Capital and liquidity positions remained robust, with the Common Equity Tier 1 ratio at 14.93% and the total capital ratio at 16.47%, both comfortably exceeding regulatory minimums. The net stable funding ratio stood at 128.96%, indicating strong funding stability. Operating expenses increased 15% year-on-year, largely due to investments in digital transformation and technology infrastructure, resulting in a cost-to-income ratio of 50.32%. Bank Chairman B.D.A. Perera and Director/CEO Naleen Edirisinghe expressed confidence in the institution's positioning for sustainable growth in the second half of 2026.
