Seylan Bank records profit after tax of Rs. 2.6Bn in 3Q 2019

Oct 31, 2019 (LBO) – Seylan Bank closed the nine months ending 30th September 2019 with a post-tax profit of Rs. 2,554 Mn, a marginal increase of 1% over the corresponding period last year.

Growth in advances coupled with the rise in interest rates enabled interest income to grow by 16.77% and interest expenses increased by 22.28%. As a result, Net interest income recorded a growth of 7.20% to reach Rs. 13,987 Mn.

Net fees and commission income recorded a slight growth of 4.54 % for the period under review. This was mainly attributed to card related income and guarantee related income during the period under review.

Other income captions comprising net losses from trading activities, net fair value gains of financial instruments, net gains on foreign exchange transactions and other operating income were reported as a net gain of Rs. 1,144 Mn compared to net gain of Rs. 1,008 Mn in 3Q 2018 mainly as a result of upward movement in exchange income, despite a decrease in Mark to Market gains on Derivatives Financial Instruments.

Total expenses increased by 8.68% from Rs. 8,885 Mn to Rs. 9,657 Mn and were fueled by new investments in technology where the focus is given to enhance the digital banking services and upgrading and refurbishment of branches / head office departments. The Bank continued to focus on widening the roll-out of lean initiatives, workflow methods and automation across the bank operations in order to keep the cost under control.

The Bank’s profit before taxes (PBT) was negatively impacted by the debt repayment levy of Rs. 706 Mn for the nine months ended September 2019 which was not in existence in the corresponding period of 2018.

The Bank reported a credit growth of 7.75 % increasing the advances from Rs. 327 Bn to Rs. 352 Bn while the deposit base grew from Rs. 358 Bn to Rs. 377 Bn during the nine months ended 30th September 2019. The Bank’s CASA ratio stood at 28.40 %.

The Gross NPA (Net of IIS) Ratio stood at 6.73 % as at 30th September 2019. The Bank’s Earning per Share (EPS) improved from Rs. 6.71 to Rs. 6.76. The Bank recorded a Return (Profit before Tax) on Average Assets (ROAA) of 0.93 % and Return on Equity (ROE) of 9.30%. The Bank’s Net Assets Value per share as at 30th September 2019 was Rs. 102.09 (Group Rs. 106.30).

The Bank received in principle approval from Colombo Stock Exchange to proceed with a Rights Issue with the objective of supporting balance sheet growth and meeting the capital adequacy requirements.

As at 30th September 2019, the Bank network comprised 173 Banking centers, 214 ATMs, 26 Cheque Deposit Kiosk (CDKs) and 40 Cash Deposit Machines (CDMs) giving seamless accessibility to its customers across the country.

The Bank continued its CSR initiatives focusing on education and accelerated its libraries project for under privileged schools. 12 school libraries were opened during the nine months taking the overall number of libraries opened under the project to 195.

In September 2019, Fitch reviewed the Bank’s rating and reaffirmed the Bank’s rating at ‘A-lka’ with a ‘stable’ outlook. Seylan Bank’s 2018 Annual Report won several awards at the ARC Awards held this year. Seylan is also ranked among the Top 30 Companies under Business Today in 2019.