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Sri Lanka Seylan Bank December net up 72-pct
14 Feb, 2012 08:18:41
Feb 14, 2012 (LBO) - Sri Lanka's Seylan Bank December 2011 quarter net profit rose 72 percent to 664 million rupees from a year ago, helped by lower loan loss provisioning.
Interest income rose 12 percent to 4.2 billion rupees while interest expenses rose at a faster 15 percent resulting in net interest income going up by almost 10 percent to just over two billion rupees.

The bank's interest margin fell to 4.90 percent as at December 31, 2011 from 5.69 percent a year before, according to a stock exchange filing.

Seylan Bank group non-interest income in the December 2011 quarter fell 12 percent to 633 million rupees despite a sharp rise in foreign exchange income, which went up 78 percent to 195 million rupees. Other income fell 28 percent to 438 million rupees.

Earnings per share for the December 2011 quarter rose 50 percent to 8.70 rupees.

The interim accounts of Seylan Bank, formerly part of the troubled Ceylinco group, showed loan loss provisions were a 310 million rupee write-back, up 322 percent from the year before, while specific provision fell 61 percent to 167 million rupees.

"Emphasis on recoveries and restructuring of non-performing debt, branch credit and customer service quality has combined to provide a platform for sustainable growth in core activities," Seylan Bank chief executive Kapila Ariyaratne said.

“The Non-Performing Advances which stood at 25.7 billion rupees, were reduced to 20.9 billion rupees as at end-2011, a reduction of 4.8 billion rupees."

For the 2011 financial year, Seylan Bank group net profit fell 17 percent to just over a billion rupees.

“Profit after tax for the entire year surpassed a billion rupees. This was even after the extraordinary cost of 698.7 million rupees incurred for a Voluntary Retirement Scheme," chairman of Seylan Bank Eastman Narangoda said.

"The 2011 reported post-tax profit is below last year’s profit of 1,229 million rupees However, if the VRS cost is factored out, 2011 results would have significantly exceeded last year’s performance.”

Interest income fell almost four percent to 16.1 billion rupees while interest expenses fell at a similar rate to 8.3 billion rupees, resulting in net interest income falling three percent to 7.8 billion rupees.

Total performing loans and advances fell 27 percent 97 billion rupees as at December 31, 2011 from a year ago while total deposits rose almost 10 percent to 121 billion rupees

“The results prove beyond doubt that the re-structuring of the organisation structure, improvement of operational and risk management processes and the significant improvement in HR practices and processes are beginning to yield the desired results," said Ariyaratne.

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