Sept 07, 2009 (LBO) – Sri Lanka’s Seylan Bank is cutting costs and focusing on recoveries to put the bank back on a stronger financial footing, members of an interim board appointed by the regulator said.
At bank level gross loans were 101.8 billion and bad loans were 32.1 billion rupees.
Seylan reported 187.8 million rupees as profits in the June quarter. After the share issue the bank will have 130 million voting shares and 123.5 million non-voting shares. Seylan Bank is selling 54 million shares to the public at 35 ruppees to raise 1.9 billion rupees to boost its capital.
It faced a run in late 2008, when it was controlled by Sri Lanka’s Ceylinco group, after a member of the business group collapsed with unpaid debts.
According to its share sale document Seylan had paid its executive and non-executive directors 74.675 million rupees as remuneration and bonuses in 2008.
The new management expects total directors’ remuneration to be only 9.7 million rupees this year.
“I have already cut down about 800 million rupees in costs,” says Eastman Narangoda, who took over as chairman on December 30, 2008 following Central Bank intervention in the bank.
At group level, non-int