People’s Bank

ICRA Lanka revises the ratings of People’s Bank

Instrument Rated Amount (LKR Mn)Rating Action
Issuer RatingNARevised to [SL]AA (Negative) from [SL]AAA on watch with Negative implications
Basel III Compliant Additional Tier I Capital Bond Programme6,000Revised to [SL]A+ (hyb) (Negative) from [SL]AA (hyb) on watch with Negative implications

Rating action

ICRA Lanka Limited has revised the Issuer Rating of People’s Bank (“PB”/” the Bank”) to [SL]AA (pronounced as S L Double A). ICRA Lanka has also revised the issue rating of Basel III Compliant, Unlisted, Rated, Unsecured, Subordinated, Perpetual, Additional Tier I (AT1) Capital Bond of LKR 6,000 Mn to [SL]A+ (hyb) (pronounced as S L A plus hybrid). The letters ‘hyb’ in parenthesis suffixed to a rating symbol stand for ‘hybrid’, indicating that the rated instrument is a hybrid subordinated instrument with equity-like loss-absorption features, which may translate into higher levels of rating transition and loss severity vis-à-vis conventional debt instruments. The outlook on the ratings are revised to Negative from rating under watch with Negative implications.

Rationale

The revision in People Bank’s ratings takes into consideration the intensified risk in the overall banking sector of Sri Lanka; particularly from the limited foreign-currency funding and elevated foreign-currency refinancing risk on account of the sovereign rating downgrades. The rating revision also considers the impact from the suspension of repayments of foreign-currency debt by the CBSL. However, ICRA Lanka notes that PB is in a relatively better position due to its lower exposure towards dollar-denominated sovereign debt in comparison to its peer banks. PB’s total investments in dollar-denominated sovereign instruments accounted for 9.7% of the total Networth as on March 31, 2022. In addition, ICRA Lanka notes that close to 50% of PB’s loan book is exposed to the state and State-Owned Enterprises (SOEs), thereby increasing PB’s risk profile. The rating revision also factors in the envisaged rise in slippages from Q2CY2022 due to the business disruptions from fuel shortage, power outage and various other macro-challenges; majority of these challenges intensified  from  April 2022 onwards.

The mark-to-market impact from the sharp interest rate hike by 700 bps in April 2022 and further by 100 bps in July 2022 is limited on the bank’s treasury investment portfolio due to majority being recognized at amortised cost. However, ICRA Lanka expects the core margins to be affected due to deposit repricing. ICRA Lanka does not expect much stress in terms of the local currency- liquidity especially given the sizeable amount of liquidity absorbed back into the financial sector post the sharp increase in the systemic rates. Established branch network of PB (743 as in March 31, 2022) will help the Bank to attract much-needed rupee liquidity. ICRA Lanka is however cognisant of the sizeable negative cumulative Asset Liability Mismatch (ALM) for less than 1 year of the Bank.

Sharp devaluation of the rupee which increased risk-weighted assets pertaining to foreign currency loans and investments resulted in a moderation of the Bank’s capital profile. PB’s Tier 1 capital ratio moderated to 11.04% in March 31, 2022 from 12.56% in December 31, 2021 as against the regulatory requirement of 9.50% in March 31, 2022. While ICRA Lanka notes the measures implemented by the Central Bank of Sri Lanka (CBSL) to support the Banking sector which includes the flexibility to draw down the Capital Conservation Buffer (“CCB”) upto 2.5%, expects the same would diminish the capital buffers available for future use especially in the current year wherein the economy is expected to face further challenges from the worsening macro parameters. ICRA Lanka also does not envisage much capital support from the Government of Sri Lanka, given its stretched fiscal outlook.

Outlook: Negative

The negative outlook reflects the envisaged weakening of asset quality indicators from Q2CY2022 on account of the current state of the economy while the capital buffers are also expected to remain stretched. The negative outlook also reflects the tight dollar liquidity faced by PB, along with rest of the peer banks. The outlook may be revised to ‘Stable’ in case of a steady improvement in its capital profile with healthy buffers over the regulatory requirements while also improving and maintaining healthy asset quality indicators and liquidity profiles.

Key rating drivers

Credit strengths

GoSL owned, systematically important bank, with a large retail franchise in the country: People’s Bank is the second largest Licensed Commercial Bank in the country, with a total asset base of LKR 2.9 Tn as on March 31, 2022.  PB is also one of the four systematically important banks. PB has positioned itself as one of the leading retail banks in the country with a branch-network of 743 branches as on March 31, 2022. The Bank’s systemic importance also stems from its status as a key lender to the GoSL. As in March 31, 2022, close to 50% of the Bank’s loan exposures are towards the GoSL and the state-owned-entities (SOEs). ICRA Lanka continues to monitor the concentration risk resulting from the same as the Bank has sizeable exposures towards SOEs.  

Healthy deposit franchise with strong CASA indicators: PB’s main funding source is its public deposits which contribute close to 75% of the total funding as on March 31, 2022. The Bank represents the second largest deposit base in the country at about LKR 2.2 Tn deposit base. The strong deposit franchise will aid the Bank to attract the required rupee liquidity into the Bank with high deposit rates following the sharp increase in systemic rates. PB’s CASA ratio (Current and Savings deposits) stood at 39.73% in March 31, 2022 compared to 39.37% as on March 31, 2021. The foreign-currency deposit base of the Bank was at 13% of total deposits as on March 31, 2022. ICRA Lanka is cognisant of the challenges posed to the foreign currency Asset Liability Managment (ALM) resulting from the suspension of the repayment of foreign currency debt by the CBSL, challenged counterparty relationship with foreign lenders due to the sovereign rating downgrade and also from the ongoing forex shortage in the country.

Credit Challenges:

Foreign-currency funding profile will remain stretched; local-currency liquidity likely to remain somewhat comfortable; Post the announcement of the foreign currency debt suspension plan by CBSL on April 2022, the international rating agencies downgraded the sovereign rating of Sri Lanka. On account of this, the major banks in the country including PB was significantly impacted on its counterparty dealings and thereby affecting its dollar liquidity. In comparison to its peers, PB is less likely affected by the pre-emptive default on International Sovereign Bonds (ISBs) due to its lower share of investments; however, will have an impact on its capital buffers with the haircuts. PB had invested in ISBs amounting to LKR 13.7 Bn (9.7% of total Networth) as on March 31, 2022. PB did not have any investments in Sri Lanka Development Bonds as on March 31, 2022.

ICRA Lanka does not expect much pressure for the bank in terms of local currency funding and liquidity going forward due to the sharp interest rate increase which attracted sizeable rupee liquidity back to the financial sector. ICRA Lanka is however cognisant of the sizeable negative cumulative Asset Liability Mismatch (ALM) for less than 1 year at around 25% of the total asset base as on March 31, 2022.

Weak capitalisation profile with diminishing regulatory capital buffers; People’s Bank reported a decline in Tier 1 capital ratio to 11.04% as on March 31, 2022 from 12.56% as on December 31, 2021. (Regulatory requirement; 9.5% as on March 31, 2022 ). The capital buffers across the Banking sector diminished in Q1CY2022 due to several reasons. Sharp currency devaluation led to an increase in the risk-weighted assets (RWAs) in the foreign currency loans and investments. In addition to this, the devaluation of the local currency also resulted in an increase in the impairement on foreign currency loans and investments. The capitalisation profile will continue to remain stressed with envisaged spikes in slippages and haircut on ISBs. ICRA Lanka takes note of the measures implemented by the CBSL to support the Banking sector which includes the flexibility to draw down the Capital Conservation Buffer (“CCB”) upto a maximum of 2.5%, however, the same would diminish the capital buffers available for future use especially in the current year wherein the economy is expected to face challenges from worsening macro parameters.

Asset quality indicators likely to deteriorate in the short to medium term; People’s Bank maintains a high impaired loans ratio at 5.11% in March 31, 2022. High exposure towards the stressed construction sector (21% of total gross advances as of December 31, 2021) is amongst the reasons for the same. ICRA Lanka expects the overall asset quality of the bank to further weaken during 2HCY2022 as the extremely challenging operating environment has adversely affected Bank’s key exposure sectors. ICRA Lanka also factors in the relatively low impairment coverage ratio at 46.43% as on March 31, 2022.

Profitability will remain subdued in CY2022; PB’s credit cost (Impairment/ATA) increased to 2.32% in Q1CY2022 as compared to 0.80% in Q1CY2021. The sharp local currency devaluation, changes to ECL for ISBs and additional impairment related to elevated market risk are amongst the reasons for the increased impairment charges. Net interest margins (“NIM”) was at 3.72% in Q1CY2022 (3.37% in Q1CY2021). PB will have flexibility in-terms of asset repricing however, the sharp increase in systemic interest rates will somewhat affect the core margins of the bank, due to the deposit repricing effect. PB reported a Profit After Tax (PAT) of LKR 5,514 Mn in Q1CY2022; marginally increased from LKR 5,452 Mn in Q1CY2021; however, profitability will remain subdued in CY2022 amidst compressed margins, further increase in impairment charges and increased taxation.

Analytical approach: For arriving at the ratings, ICRA has applied its rating methodologies as indicated below.

Links to applicable criteria: https://www.icralanka.com/rating-methodology-for-banks/

About People’s Bank:

People’s Bank is the second-largest licensed commercial bank in Sri Lanka, owned by the government of Sri Lanka (GoSL). As on March 31, 2022, PB accounted to over LKR 2.9 Tn assets. People’s Bank also operates with over 743 branches, spread across the island.

During Q1CY2022, PB reported a profit after tax (PAT) of LKR 5,514 Mn on a total asset base of LKR 2,938,486 Mn as compared to a PAT of LKR 5,452 Mn in Q1CY2021 on a total asset base of LKR 2,387,338 Mn. For CY2021, PB reported a PAT of LKR 23,720 Mn on a total asset base of LKR 2,647,641 Mn.

Key financial indicators of People’s Bank
LKR MnFY2020FY2021Q1CY2021*Q1CY2022*
Net interest income60,93482,46119,43025,974
Profit after tax14,17523,7205,4525,514
Networth101,984136,077106,816141,331
Loans and advances (net)1,635,5791,835,6971,814,3921,848,171
Total assets2,230,1192,647,6412,387,3382,938,486
Return on average Networth14.39%19.93%20.89%15.90%
Return on Assets (Based on PAT)0.69%0.97%0.94%0.79%
Capital adequacy ratio (BASEL III Tier 1)9.53%12.56%10.07%11.04%
Gearing (times)20.3918.1520.8819.23

*Unaudited financials

Rating history for last three years:
Analysts
Sachini Costa
+94-774781595
sachini.costa@icralanka.com

Niraj Jalan
+91-33-71501146
niraj.jalan@icraindia.com

Disclaimer
ICRA Logo

Subsidiary of ICRA Limited

A Group Company of Moody's Investors Service

CORPORATE OFFICE
Level10, East Tower, World Trade Center, Colombo 01, Sri Lanka
Tel:+94 11 4339907;Fax:+94112333307 Email:info@icralanka.com; Website:www.icralanka.com

© Copyright, 2022 ICRA Lanka Limited. All Rights Reserved. Contents may be used freely with due acknowledgement to ICRA Lanka.

ICRA Lanka ratings should not be treated as recommendations to buy, sell or hold the rated debt instruments. ICRA Lanka ratings are subject to a process of surveillance, which may lead to revision in ratings. An ICRA Lanka rating is a symbolic indicator of ICRA Lanka’s current opinion on the relative capability of the issuer concerned to timely service debts and obligations, with reference to the instrument rated. Please visit our website www.icralanka.com or contact ICRA Lanka’s office for the latest information on the outstanding ICRA Lanka ratings.

All information contained herein has been obtained by ICRA Lanka from sources believed by it to be accurate and reliable, including the rated issuer. ICRA Lanka however has not conducted any audit of the rated issuer or of the information provided by it. While reasonable care has been taken to ensure that the information herein is true, such information is provided ‘as is’ without any warranty of any kind, and ICRA Lanka in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information.

ICRA Lanka does not take any responsibility for accuracy of material/documents prepared or published by other parties based on this document. All ICRA Lanka official rating rationales are prepared in English and external parties may present or publish translated versions of the same. Readers are henceforth advised to refer to the ICRA Lanka’s official rating rationale in the event of any inconsistency found in such documents.

ICRA Lanka or any of its group companies may have provided services other than rating to the issuer rated. All information contained herein must be construed solely as statements of opinion, and ICRA Lanka shall not be liable for any losses incurred by users from any use of this publication or its contents.

People’s Bank

ICRA Lanka revises the ratings of People’s Bank

Instrument Rated Amount (LKR Mn)Rating Action
Issuer RatingNARevised to [SL]AA (Negative) from [SL]AAA on watch with Negative implications
Basel III Compliant Additional Tier I Capital Bond Programme6,000Revised to [SL]A+ (hyb) (Negative) from [SL]AA (hyb) on watch with Negative implications

Rating action

ICRA Lanka Limited has revised the Issuer Rating of People’s Bank (“PB”/” the Bank”) to [SL]AA (pronounced as S L Double A). ICRA Lanka has also revised the issue rating of Basel III Compliant, Unlisted, Rated, Unsecured, Subordinated, Perpetual, Additional Tier I (AT1) Capital Bond of LKR 6,000 Mn to [SL]A+ (hyb) (pronounced as S L A plus hybrid). The letters ‘hyb’ in parenthesis suffixed to a rating symbol stand for ‘hybrid’, indicating that the rated instrument is a hybrid subordinated instrument with equity-like loss-absorption features, which may translate into higher levels of rating transition and loss severity vis-à-vis conventional debt instruments. The outlook on the ratings are revised to Negative from rating under watch with Negative implications.

Rationale

The revision in People Bank’s ratings takes into consideration the intensified risk in the overall banking sector of Sri Lanka; particularly from the limited foreign-currency funding and elevated foreign-currency refinancing risk on account of the sovereign rating downgrades. The rating revision also considers the impact from the suspension of repayments of foreign-currency debt by the CBSL. However, ICRA Lanka notes that PB is in a relatively better position due to its lower exposure towards dollar-denominated sovereign debt in comparison to its peer banks. PB’s total investments in dollar-denominated sovereign instruments accounted for 9.7% of the total Networth as on March 31, 2022. In addition, ICRA Lanka notes that close to 50% of PB’s loan book is exposed to the state and State-Owned Enterprises (SOEs), thereby increasing PB’s risk profile. The rating revision also factors in the envisaged rise in slippages from Q2CY2022 due to the business disruptions from fuel shortage, power outage and various other macro-challenges; majority of these challenges intensified  from  April 2022 onwards.

The mark-to-market impact from the sharp interest rate hike by 700 bps in April 2022 and further by 100 bps in July 2022 is limited on the bank’s treasury investment portfolio due to majority being recognized at amortised cost. However, ICRA Lanka expects the core margins to be affected due to deposit repricing. ICRA Lanka does not expect much stress in terms of the local currency- liquidity especially given the sizeable amount of liquidity absorbed back into the financial sector post the sharp increase in the systemic rates. Established branch network of PB (743 as in March 31, 2022) will help the Bank to attract much-needed rupee liquidity. ICRA Lanka is however cognisant of the sizeable negative cumulative Asset Liability Mismatch (ALM) for less than 1 year of the Bank.

Sharp devaluation of the rupee which increased risk-weighted assets pertaining to foreign currency loans and investments resulted in a moderation of the Bank’s capital profile. PB’s Tier 1 capital ratio moderated to 11.04% in March 31, 2022 from 12.56% in December 31, 2021 as against the regulatory requirement of 9.50% in March 31, 2022. While ICRA Lanka notes the measures implemented by the Central Bank of Sri Lanka (CBSL) to support the Banking sector which includes the flexibility to draw down the Capital Conservation Buffer (“CCB”) upto 2.5%, expects the same would diminish the capital buffers available for future use especially in the current year wherein the economy is expected to face further challenges from the worsening macro parameters. ICRA Lanka also does not envisage much capital support from the Government of Sri Lanka, given its stretched fiscal outlook.

Outlook: Negative

The negative outlook reflects the envisaged weakening of asset quality indicators from Q2CY2022 on account of the current state of the economy while the capital buffers are also expected to remain stretched. The negative outlook also reflects the tight dollar liquidity faced by PB, along with rest of the peer banks. The outlook may be revised to ‘Stable’ in case of a steady improvement in its capital profile with healthy buffers over the regulatory requirements while also improving and maintaining healthy asset quality indicators and liquidity profiles.

Key rating drivers

Credit strengths

GoSL owned, systematically important bank, with a large retail franchise in the country: People’s Bank is the second largest Licensed Commercial Bank in the country, with a total asset base of LKR 2.9 Tn as on March 31, 2022.  PB is also one of the four systematically important banks. PB has positioned itself as one of the leading retail banks in the country with a branch-network of 743 branches as on March 31, 2022. The Bank’s systemic importance also stems from its status as a key lender to the GoSL. As in March 31, 2022, close to 50% of the Bank’s loan exposures are towards the GoSL and the state-owned-entities (SOEs). ICRA Lanka continues to monitor the concentration risk resulting from the same as the Bank has sizeable exposures towards SOEs.  

Healthy deposit franchise with strong CASA indicators: PB’s main funding source is its public deposits which contribute close to 75% of the total funding as on March 31, 2022. The Bank represents the second largest deposit base in the country at about LKR 2.2 Tn deposit base. The strong deposit franchise will aid the Bank to attract the required rupee liquidity into the Bank with high deposit rates following the sharp increase in systemic rates. PB’s CASA ratio (Current and Savings deposits) stood at 39.73% in March 31, 2022 compared to 39.37% as on March 31, 2021. The foreign-currency deposit base of the Bank was at 13% of total deposits as on March 31, 2022. ICRA Lanka is cognisant of the challenges posed to the foreign currency Asset Liability Managment (ALM) resulting from the suspension of the repayment of foreign currency debt by the CBSL, challenged counterparty relationship with foreign lenders due to the sovereign rating downgrade and also from the ongoing forex shortage in the country.

Credit Challenges:

Foreign-currency funding profile will remain stretched; local-currency liquidity likely to remain somewhat comfortable; Post the announcement of the foreign currency debt suspension plan by CBSL on April 2022, the international rating agencies downgraded the sovereign rating of Sri Lanka. On account of this, the major banks in the country including PB was significantly impacted on its counterparty dealings and thereby affecting its dollar liquidity. In comparison to its peers, PB is less likely affected by the pre-emptive default on International Sovereign Bonds (ISBs) due to its lower share of investments; however, will have an impact on its capital buffers with the haircuts. PB had invested in ISBs amounting to LKR 13.7 Bn (9.7% of total Networth) as on March 31, 2022. PB did not have any investments in Sri Lanka Development Bonds as on March 31, 2022.

ICRA Lanka does not expect much pressure for the bank in terms of local currency funding and liquidity going forward due to the sharp interest rate increase which attracted sizeable rupee liquidity back to the financial sector. ICRA Lanka is however cognisant of the sizeable negative cumulative Asset Liability Mismatch (ALM) for less than 1 year at around 25% of the total asset base as on March 31, 2022.

Weak capitalisation profile with diminishing regulatory capital buffers; People’s Bank reported a decline in Tier 1 capital ratio to 11.04% as on March 31, 2022 from 12.56% as on December 31, 2021. (Regulatory requirement; 9.5% as on March 31, 2022 ). The capital buffers across the Banking sector diminished in Q1CY2022 due to several reasons. Sharp currency devaluation led to an increase in the risk-weighted assets (RWAs) in the foreign currency loans and investments. In addition to this, the devaluation of the local currency also resulted in an increase in the impairement on foreign currency loans and investments. The capitalisation profile will continue to remain stressed with envisaged spikes in slippages and haircut on ISBs. ICRA Lanka takes note of the measures implemented by the CBSL to support the Banking sector which includes the flexibility to draw down the Capital Conservation Buffer (“CCB”) upto a maximum of 2.5%, however, the same would diminish the capital buffers available for future use especially in the current year wherein the economy is expected to face challenges from worsening macro parameters.

Asset quality indicators likely to deteriorate in the short to medium term; People’s Bank maintains a high impaired loans ratio at 5.11% in March 31, 2022. High exposure towards the stressed construction sector (21% of total gross advances as of December 31, 2021) is amongst the reasons for the same. ICRA Lanka expects the overall asset quality of the bank to further weaken during 2HCY2022 as the extremely challenging operating environment has adversely affected Bank’s key exposure sectors. ICRA Lanka also factors in the relatively low impairment coverage ratio at 46.43% as on March 31, 2022.

Profitability will remain subdued in CY2022; PB’s credit cost (Impairment/ATA) increased to 2.32% in Q1CY2022 as compared to 0.80% in Q1CY2021. The sharp local currency devaluation, changes to ECL for ISBs and additional impairment related to elevated market risk are amongst the reasons for the increased impairment charges. Net interest margins (“NIM”) was at 3.72% in Q1CY2022 (3.37% in Q1CY2021). PB will have flexibility in-terms of asset repricing however, the sharp increase in systemic interest rates will somewhat affect the core margins of the bank, due to the deposit repricing effect. PB reported a Profit After Tax (PAT) of LKR 5,514 Mn in Q1CY2022; marginally increased from LKR 5,452 Mn in Q1CY2021; however, profitability will remain subdued in CY2022 amidst compressed margins, further increase in impairment charges and increased taxation.

Analytical approach: For arriving at the ratings, ICRA has applied its rating methodologies as indicated below.

Links to applicable criteria: https://www.icralanka.com/rating-methodology-for-banks/

About People’s Bank:

People’s Bank is the second-largest licensed commercial bank in Sri Lanka, owned by the government of Sri Lanka (GoSL). As on March 31, 2022, PB accounted to over LKR 2.9 Tn assets. People’s Bank also operates with over 743 branches, spread across the island.

During Q1CY2022, PB reported a profit after tax (PAT) of LKR 5,514 Mn on a total asset base of LKR 2,938,486 Mn as compared to a PAT of LKR 5,452 Mn in Q1CY2021 on a total asset base of LKR 2,387,338 Mn. For CY2021, PB reported a PAT of LKR 23,720 Mn on a total asset base of LKR 2,647,641 Mn.

Key financial indicators of People’s Bank
LKR MnFY2020FY2021Q1CY2021*Q1CY2022*
Net interest income60,93482,46119,43025,974
Profit after tax14,17523,7205,4525,514
Networth101,984136,077106,816141,331
Loans and advances (net)1,635,5791,835,6971,814,3921,848,171
Total assets2,230,1192,647,6412,387,3382,938,486
Return on average Networth14.39%19.93%20.89%15.90%
Return on Assets (Based on PAT)0.69%0.97%0.94%0.79%
Capital adequacy ratio (BASEL III Tier 1)9.53%12.56%10.07%11.04%
Gearing (times)20.3918.1520.8819.23

*Unaudited financials

Rating history for last three years:
Analysts
Sachini Costa
+94-774781595
sachini.costa@icralanka.com

Niraj Jalan
+91-33-71501146
niraj.jalan@icraindia.com

Disclaimer
ICRA Logo

Subsidiary of ICRA Limited

CORPORATE OFFICE
Level10, East Tower, World Trade Center, Colombo 01, Sri Lanka
Tel:+94 11 4339907;Fax:+94112333307 Email:info@icralanka.com; Website:www.icralanka.com

© Copyright, 2022 ICRA Lanka Limited. All Rights Reserved. Contents may be used freely with due acknowledgement to ICRA Lanka.

ICRA Lanka ratings should not be treated as recommendations to buy, sell or hold the rated debt instruments. ICRA Lanka ratings are subject to a process of surveillance, which may lead to revision in ratings. An ICRA Lanka rating is a symbolic indicator of ICRA Lanka’s current opinion on the relative capability of the issuer concerned to timely service debts and obligations, with reference to the instrument rated. Please visit our website www.icralanka.com or contact ICRA Lanka’s office for the latest information on the outstanding ICRA Lanka ratings.

All information contained herein has been obtained by ICRA Lanka from sources believed by it to be accurate and reliable, including the rated issuer. ICRA Lanka however has not conducted any audit of the rated issuer or of the information provided by it. While reasonable care has been taken to ensure that the information herein is true, such information is provided ‘as is’ without any warranty of any kind, and ICRA Lanka in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information.

ICRA Lanka does not take any responsibility for accuracy of material/documents prepared or published by other parties based on this document. All ICRA Lanka official rating rationales are prepared in English and external parties may present or publish translated versions of the same. Readers are henceforth advised to refer to the ICRA Lanka’s official rating rationale in the event of any inconsistency found in such documents.

ICRA Lanka or any of its group companies may have provided services other than rating to the issuer rated. All information contained herein must be construed solely as statements of opinion, and ICRA Lanka shall not be liable for any losses incurred by users from any use of this publication or its contents.