Seylan Bank’s 1Q after tax profit up 26% to Rs. 505 m

Friday, 3 May 2013 03:22 -     - {{hitsCtrl.values.hits}}

Seylan Bank, which celebrated its 25th year anniversary in March, recorded yet another impressive quarterly performance with profits before income tax reaching Rs. 728 million for the three months ended 31 March 2013.

Profits after tax reached Rs. 505 million, a 26.7% increase compared to the Rs. 399 million reported in the corresponding period in 2012. The interim financial statements have been prepared in accordance with LKAS/SLFRS.

Despite lower than expected credit demand and industry wide pressure on interest margins, net interest income increased by 5.8% to Rs. 2.16 billion for the three months ended 31 March 2013, resulting from selective growth in quality advances.  

Net fee and commission income increased by 20% from Rs. 384 million to Rs. 461 million during Q1-2013.  This was achieved in spite of an overall reduction in import related activities through the bank diversifying into various other trade and fee income generating services.

The bank grew its deposits base from Rs. 146.7 billion to Rs. 150.1 billion during Q1 and its net advances portfolio from Rs. 124.7 billion to Rs. 125.9 billion during the three months under review, despite fierce competition for deposits and a high interest rate environment.

The bank was also able to improve its asset quality through focused, sustained and effective recovery efforts. This enabled the bank to reduce its Gross NPA by a further Rs. 421 million during Q1-2013.  

Seylan Bank Chairman Nihal Jayamanne PC stated: “The bank has posted yet another strong quarterly performance recording a 26.7% growth in profit after tax in Q1-2013, these results prove that our strategies are continuing to yield the desired results.”

As at 31 March 2013, the Bank network comprised of 147 Branches, 154 ATMs and 81 Student Savings Centres.

Preparing for future growth, the bank raised Rs. 2 billion though a successful debenture issue in February that was over-subscribed on the opening day. The bank intends to invest on identified key areas which are in line with the bank’s future growth strategies including new product development, branch expansion, service quality improvement, staff training and development and IT infrastructure.

The bank’s total capital adequacy ratio stands at 14.08% at the end of Q1-2013. The recent debenture issue (Rs. 2 billion) has not been included in the total capital adequacy computation for Q1-2013, since CBSL approval was obtained in April 2013. Once these funds are included, the bank’s total capital adequacy would exceed 15.5%, one of the highest on the local banking industry.

As a result of the impressive performance, earnings per share improved to Rs. 1.49 from Rs. 1.18 reported in the corresponding quarter last year. While return (profit before tax) on assets and return on equity stood at to 1.54% and 10.57% respectively.

General Manager/CEO Kapila Ariyaratne stated: “Our total commitment to delivering enhanced value to our customers in all their interactions with us has made it possible for us to maintain our growth momentum despite a challenging external environment both locally and globally. We fully intend to continue this positive trend through product innovation and improvement, further expansion and improvement of our branch network and by continuing to provide our valued customers an unparalleled service that goes beyond just banking.”

The bank gained greater visibility during the quarter, thereby resulting in an enhanced brand equity for the bank as well. The bank was also ranked in the top 20 brands in Sri Lanka by the LMD magazine special Brands edition 2013 launched in April, reinforcing its status as one of the strongest brands and financial institutions in the country.