An analysis of the Bank’s value creation and allocation among the key stakeholder groups is depicted below:
| 2022 LKR million |
2021 LKR million |
Change % |
|
| VALUE ADDED | |||
| Income earned by providing banking services | 494,578 | 284,832 | 74 |
| Cost of Services | (252,715) | (140,946) | 79 |
| Value added by banking services | 241,863 | 143,886 | 68 |
| Non banking income | 18,571 | 5,531 | 236 |
| Impairment charges for loans and other losses | (87,156) | (43,734) | 99 |
| Value Addition | 173,278 | 105,683 | 64 |
| Value Allocation | |||
| To Employees | |||
| Salaries, Wages and Other Benefits | 28,991 | 24,982 | 16 |
| To Government | |||
| Dividends paid to Government of Sri Lanka | 346 | 1,846 | (81) |
| Income Tax | 13,550 | 9,836 | 38 |
| Surcharge Tax | 6,739 | – | 100 |
| Taxes on financial services | 11,313 | 9,027 | 25 |
| 31,948 | 20,710 | 54 | |
| To Community | |||
| Social responsibility projects | 60 | 80 | (24) |
| To Providers of External Funds | |||
| Interest on other borrowings | 89,293 | 16,944 | 427 |
| Interest on debt issued | 8,358 | 7,314 | 14 |
| 97,651 | 24,259 | 302.54 | |
| To Expansion and Growth | |||
| Retained Profit | 31,626 | 35,744 | (12) |
| Surcharge Tax | (6,739) | – | 100 |
| Depreciation and amortisation | 4,287 | 4,146 | 3 |
| Deferred Taxation | (14,546) | (4,237) | 243 |
| 14,628 | 35,653 | (59) | |
| 173,278 | 105,683 | 64 |
Economic Value Added (EVA) indicates the true economic profit of an organisation. EVA is an estimate of the amount by which earnings exceed or fall short of required minimum return for shareholders at comparable risks.
| 2022 LKR million |
2021 LKR million |
|
| Invested capital | ||
| Average shareholders’ funds | 213,042 | 177,090 |
| Add: Average cumulative impairment provision for loan losses and other losses | 244,864 | 162,906 |
| 457,906 | 339,996 | |
| Return on invested capital | ||
| Profit after taxation | 31,972 | 37,590 |
| Add: Impairment provision for loan losses and other losses | 87,156 | 43,734 |
| Less: Loans written off | (19) | (77) |
| Total return on invested capital | 119,110 | 81,247 |
| Opportunity cost of invested capital* | (104,265) | (19,210) |
| Economic value added | 14,844 | 62,037 |
| 22.77% | 5.65% |
*Calculated based on weighted average 12 months Treasury bill rate 2022 – 22.77% (2021 – 5.65%)