May 3, 2018 (LBO) – Sri Lanka’s Seylan Bank has posted a profit after tax of 1,053 million rupees in first quarter of 2018.
The Bank’s earning per share (EPS) grew by 21.57 percent to 2.88 rupees with the net asset value per share as at 31st March 2018 was 94.34 rupees (Group Rs.98.63).
Net interest income increased by 17.21 percent as the volume growth outperformed the impact arising from the narrowing of NIMs.
Net fee and commission income witnessed a growth of 14.61 percent to reach 995 million rupees in 1Q 2018 as compared to 868 million rupees for the comparative period.
Initiatives put in place to harness fee generating business across various customer and market segments such as card related income, trade finance related fee income and fees from guarantees, remittances is progressing rapidly as reflected by the increases shown in fee based income.
Other operating income comprising of gains from trading, gains from financial investments, gains on foreign exchange and other income were reported as a net gain of 366 million rupees compared to net gain of 238 million rupees in 1Q 2017.
Impairment charges for loans and other losses for the period reached Rs. 542 Million as compared to a charge of 346 million rupees in Q1 2017. Individual impairment charges of 380 million rupees represent provisions specific credit exposures.
Total Expenses recorded an increase of 10.46 percent from 2,705 million in the 1Q of the previous year to 2,988 million rupees during the period under review.
Expenses growth was witnessed by investments made in employees, IT and infrastructure, upgrading and refurbishment of branches etc.
The bank continued to focus on widening the roll-out of lean initiatives, workflow methods and automation across the bank in its pursuit towards rationalising expenditure on key controllable cost lines and inculcating a culture of working smarter across all the functions by the employees.
Loans and advances portfolio of the Bank recorded a marginal growth of 3.01% to 289,302 Million during the 1Q 2018 amidst rising interest rates. The growth in credit was driven primarily by Term loans and Overdrafts.
The overall deposit base recorded a marginal growth of 1.24 percent to 310,904 million rupees by 1Q 2018 and a shift from low cost CASA to term deposits was noted which is partly due to increase in interest rates. As a result Bank’s CASA ratio (Current and Savings) stood 31.25 percent and total time deposits increased from 68.80 percent by end of year 2017 to 68.75 percent as at 31st March 2018 of the total deposits base.
Seylan Bank remained soundly capitalised, with the key capital adequacy ratios well above the regulatory minimum requirements and recorded 10.37 percent as the total Tier 1 capital ratio and 14.29 percent as the total capital ratio.
The Bank recorded a Return on Average Assets (ROAA) of 1.52 percent and Return on Equity (ROE) of 12.25 percent.
The Bank recognises education as one of the building blocks of the nation and considers it as a priority area for its CSR activities. Under the ‘Seylan Pahasara’ project the Bank opened 8 libraries during the first quarter which add up to total of 161 libraries in rural areas, especially in under privileged schools with the aim to nurture young minds and educate them so that they contribute to the nation’s development.
The Bank is committed to expanding its branch network in order to provide its customers with the best possible service at all times. The Bank network currently comprises 168 Banking Centers and 206 ATMs. In keeping in line with the strategy of expanding customer touch points to enhance accessibility and convenience. Fitch reviewed the Bank’s rating and reaffirmed the Bank’s rating at ‘A-lka’ with a ‘stable ‘outlook.