Tight Quarter

June 8, 2009 (LBO) – Sri Lanka’s Seylan Bank group said profits fell 99.8 percent to 135,279 rupees in the March 2009 quarter, non performing loans grew steeply and net-interest income fell as its balance sheet contracted.

Group net assets were up 1.6 percent to 9,519 million rupees. Gross assets shrank 7.5 percent to 151.7 billion rupees from 164.2 billion rupees.

Sri Lanka’s Central Bank is currently evaluating a bid from Lanka Orix Leasing Company to sell a 33 percent stake in Seylan.

The Central Bank, which is the banking regulator put Seylan under state-run Bank of Ceylon after a run on its deposits triggered by the collapse of an unregulated firm in its controlling Ceylinco group. Interest income fell 0.49 percent to 5,468 million rupees and interest expenses grew 15.42 percent to 4,332 million rupees while net interest income fell 34.7 percent to 1,135 million rupees.

Fee income was flat t 693.4 million rupees against 697.1 million in the first quarter last year, according to provisional accounts released to the Colombo Stock Exchange.

Forex income rose 75.5 percent to 248.4 million rupees.

Interest income from loans and advances fell 0.67 percent to 4,375 million as the performing loa