Seylan Bank PAT grows 21%; exceeds Rs. 1.2 b during 1H 2014

Friday, 1 August 2014 00:40 -     - {{hitsCtrl.values.hits}}

Seylan Bank recorded an impressive performance with profit before income tax reaching Rs. 1,863 million for the six months ended 30 June 2014. Profits after tax reached Rs. 1,213 million, a 21% increase compared to the Rs. 1,002 million reported in the corresponding six-month period in 2013. The quarterly PAT figure of Rs. 698 million was an improvement of 41% compared with Rs. 497 million reported in the corresponding three months of last year. Net interest income increased from Rs. 4.27 billion to Rs. 5.16 billion, a 21% increase for the six months ended 30 June 2014. Net fee and commission income increased by 8% from Rs. 973 million to Rs. 1,056 million with the bank showing a continuation of the solid growth trend recorded in the past few years. During 1H 2014, the bank grew its deposit base from Rs. 167.4 billion to Rs. 172.7 billion. The growth was predominately achieved through the mobilisation of current and savings deposits, which enabled the bank’s low cost deposit base to increase from 33% in December 2013 to over 35% as at end June 2014. However, the bank’s net advance portfolio reduced from Rs. 136.5 billion to Rs. 133.1 billion during the six months under review, due to slower than expected credit growth in the industry and the impact of lower gold prices. Despite the decline in gold prices and its impact on the pawning base, the bank was also able to improve its asset quality through effective recovery and rehabilitating efforts. This enabled the bank to maintain its Gross NPA (net of IIS) at 10.86% as at end June 2014. The bank has also set itself a target of reducing this to a single digit by year-end. The bank successfully concluded a review, update and extension of its Strategic Plan in the latter part of 2013, with an extension of the plan to 2016.  The areas of focus in the strategic plan review included advance/deposit growth, branch expansion, customer service improvement, staff development, NPA reduction, cost control, new product development, IT infrastructure, shareholder value, etc. The bank also continued its CSR initiatives focusing on education and accelerated its 100 libraries project for underprivileged schools; 18 such school libraries were opened by the bank so far during 2014. The branch relocation and upgrading project too continued in full steam during 1H 2014, with a view to enhance the customers’ service experience. In July 2014, a further 19 Convenient Banking Centres with limited operations were upgraded to full branch status. As at 30 June, the bank network comprised 151 branches, 162 ATMs and 92 Student Savings Centres. The bank’s total capital adequacy ratio stands at 15.27% at the end of Q-2 2014, well above the regulatory requirements. As a result of the impressive performance, Earnings per Share was at Rs. 3.51 for Q2 2014, while return (profit before tax) on assets and return on equity stood at 1.70% and 11.06% respectively.  The bank’s net asset value per share as at 30 June was Rs. 64.90 (Group Rs 67.71).