Sri Lanka Seylan Bank profits up in March quarter

May 06, 2010 (LBO) – Sri Lanka’s Seylan Bank group has reported profits of 195.5 million rupees in the March 2010 quarter from break-even levels a year earlier with wider interest margins boosting the bottom line.

Group interest income fell 34.6 percent to 4,052 million rupees, but interest expenses fell at a faster 54.6 percent to just 2,291 million rupees allowing net interest income to rise 52.4 percent to 1,760 million rupees.

Sri Lankan banks usually cut deposit rates faster than lending rates and raise lending rates before deposit rates to protect margins.

The bank’s fee income fell 21 percent to 527 million rupees with forex income falling a steep 69 percent to 74.8 million rupees.

Seylan Bank was put under state-mandated management after a run and is now controlled by state-run Sri Lanka Insurance Corporation (15 percent) and Bank of Ceylon (10 percent). The Employees Provident Fund has 3.03 percent.

Browns Investments (Pvt) Ltd had 10 percent of the bank’s voting shares and Lanka Orix Information Technology Limited had 10 percent. T Senthilverl also had 10 percent.

The bank’s new management had contained expenses to 1,567 million rupees, down 7 percent from a year earlier with personal costs falling 4 percent to 709 million rupees.

Seylan has provided 214 million rupees for bad loans. The group had 62.6 billion rupees in performing loans and 28.2 billion rupees in non-performing loans down from 31.1 billion rupees a year earlier.

It had gross loans of 90.9 billion rupees, down from 92.4 billion rupees.

The bank’s fixed deposits had fallen 2.4 percent to 59.4 billion rupees but savings deposits had grown 5.7 percent to 33.6 billion rupees. Total deposits were at 105.8 billion rupees in March, steady from 105.4 billion a year earlier.