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Seylan Bank has closed the nine months ending 30 September 2019 with a post-tax profit of Rs. 2,554 million, registering a marginal increase of 1% over the corresponding period of last year. Growth in advances, coupled with a rise in interest rates, enabled interest income to grow by 16.77% and interest expenses to increase by 22.28%. As a result, net interest income recorded growth of 7.20% to reach Rs. 13,987 million.
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 reported a net gain of Rs. 1,144 million compared to a net gain of Rs. 1,008 million in 3Q 2018, mainly due to 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 million to Rs. 9,657 million and were fueled by new investments in technology where focus was given to enhancing digital banking services, upgrading and refurbishing branches and head office departments. The bank continued to focus on widening the roll-out of lean initiatives, workflow methods and automation across the bank’s operations in order to keep the cost under control.
The bank’s profit before tax (PBT) was negatively impacted by the debt repayment levy of Rs. 706 million for the nine months ended September 2019 which was not in existence during the corresponding period of 2018.
The bank reported credit growth of 7.75 %, increasing advances from Rs. 327 billion to Rs. 352 billion while the deposit base grew from Rs. 358 billion to Rs. 377 billion during the nine months ended 30 September 2019. The bank’s CASA ratio stood at 28.40 %.
The Gross NPA (Net of IIS) Ratio stood at 6.73 % as at 30 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 30 September 2019 was Rs. 102.09 (Group Rs. 106.30).
The bank received Approval in Principle from the Colombo Stock Exchange to proceed with a Rights Issue with the objective of supporting balance sheet growth and meeting capital adequacy requirements.
As of 30 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 underprivileged schools. Twelve 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 its 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 was also ranked among the Top 30 Companies by Business Today in 2019.
