Seylan reports Rs. 2.3 b profit after tax for 2013
Friday, 28 February 2014 00:44
Seylan Bank’s Profit after Tax reached a record Rs. 2,315 million compared to the Rs. 2,064 million reported in 2012, an impressive 12% growth in PAT for the year ended 31 December 2013.
Profit after Tax for Q-4 2013 (final quarter) was reported at Rs. 780 million as compared with Rs. 466 million for the same period last year reflecting a growth of 67% over Q-4 last year.
Despite slow credit growth and industry wide pressure on interest margins, Net Interest income increased from Rs. 9,014 million to Rs. 9,830 million for the 12 months ended 31 December 2013. Fee and Commission income increased 25.5% from Rs. 1,695 million to Rs. 2,127 million showing a consolidation of the solid growth in core banking activities achieved by Seylan Bank over the past few years.
During the year under review the bank also focused considerably on cost containment. As a result of many effective cost containment initiatives, total other expenses were reduced by 6% from Rs. 3,299 million in 2012 to Rs. 3,091 million in 2013. Total personnel expenses increased by 13%, due to a salary revision granted to all staff at the beginning of the year.
The bank also successfully implemented a core banking system upgrade in February 2013. This will have significant cost efficiencies through process improvements to the bank in the coming years. The upgrade will also facilitate many additional functionalities, enabling better product and service delivery to its customers.
The bank grew its deposits base by 14% from Rs. 146.7 billion to Rs. 167.3 billion during 2013 and its net advances portfolio by 9.5% from Rs. 124.7 billion to Rs. 136.6 billion during the year under review.
Even more significantly, despite an industry wide trend of deteriorating asset quality, Seylan is one of the few Banks who was able to improve its asset quality through effective recovery and rehabilitating efforts which resulted in a significant reduction in its Gross NPA (net of IIS) from 12.99% in December 2012 to 10.58% as at end December 2013.
In September 2013, Fitch affirmed the Banks rating at A- lka, with a ‘Stable’ outlook.
The bank also successfully concluded a review, update and extension of its current Strategic Plan to 2016. The areas of focus include advance/deposit growth, branch expansion, customer service improvement, staff development, NPA reduction, cost control, new product development, IT infrastructure, shareholder value, etc. The strategic plan also earmarks the opening of 100 libraries in under privilege schools over a period of four years. In the latter half of 2013, 11 such school libraries were opened by the bank.
During 2013, the bank opened four new branches, fully refurbished 16 branches and relocated a further six branches to more customer friendly locations. As at 31 December 2013, the bank network comprised of 151 branches, 158 ATMs and 86 student savings centres.
The bank’s total capital adequacy ratio stands at 15.75% as at 31 December 2013, well above the regulatory requirement.
As a result of this impressive 2013 performance, Earnings per share stood at Rs 6.74 (Group Rs. 6.78), while return (profit before tax) on assets and return on equity stood at to 1.72% and 11.4% respectively. The bank’s net asset value per share as at 31 December 2013 was Rs. 63.08 (Group Rs. 65.69).