Seylan Bank 1Q PAT up 5.25% to Rs. 2.91 b

• PBT up 8.3% to Rs. 4.5 b as total assets reach Rs. 943 b
• ROE at 14.39% and Impaired Loans (Stage 3) at 1.01%

Chairman Justice Buwaneka Aluwihare, PC

Director/CEO Ramesh Jayasekara

Seylan Bank PLC has reported a Profit After Tax (PAT) of Rs. 2.91 billion in the first quarter of 2026, up 5.25% from a year ago.

The bank said it recorded a Profit Before Income Tax (PBT) of Rs. 4,548 million in 1Q 2026, against Rs. 4,199 million a year ago, reflecting a growth of 8.31%.

Net interest income increased from Rs. 8,587 million to Rs. 9,734 million, an increase of 13.37% over the previous year mainly due to the significant growth in the bank’s assets base over the last 12 months from Rs. 785 billion as of end-1Q 2025 to Rs. 943 billion as at 31 March 2026. The bank’s Net Interest Margin (NIM) also moderated from 4.5% in 2025 to 4.23% during 1Q 2026. 

The bank’s net fee-based income recorded a growth of 24.04%, increasing from Rs. 1,863 million to Rs. 2,311 million, primarily driven by fee income from cards, remittances, trade, and other financial services. 

Other income, comprising of net gains/losses from trading, net gains from derecognition of financial assets, and net other operating income, reflected a reduction mainly due to a decline in mark-to-market gains from Government securities and equity investments with the prevailing market interest rates and price movements. However, exchange income showed an increase due to higher forex trade volumes. 

The bank’s total operating income was recorded as Rs. 12,375 million, an increase of 12.57% compared to Rs. 10,994 million recorded in the corresponding period of 2025, driven mainly by the increases in net interest income, net fee, and commission income. 

Total operating expenses increased by 19.4%, rising from Rs. 5,135 million in 1Q 2025 to Rs. 6,131 million 1Q 2026. Personnel expenses grew by 15.41% from 2,806 million to Rs. 3,238 million, primarily due to annual revisions to staff-related costs. Other operating expenses, including depreciation and amortisation, increased by 24.21%, reflecting higher prices of consumables, card-related expenses, and other related services over the period. The bank continues to implement targeted cost optimisation initiatives to manage expenses efficiently.

The bank recorded an impairment charge of Rs. 100 million in 1Q 2026, lower than Rs. 225 million 1Q 2025, with a reduction of 55.57%. The bank has ensured Impairment provisions are made prudently to reflect changes in the global and local economy, customer credit risk profiles, and the overall credit quality of the bank’s loan portfolio, ensuring adequacy of provisions recognised in the financial statements. 

The bank’s asset quality ratios demonstrated continued strength, with the Impaired Loan (Stage 3) Ratio at 1.01% (2025: 1.03%) and the Stage 3 Provision Cover Ratio at 86.23% as at 31 March 2026, among the highest in the banking industry.

Income tax expenses for 1Q 2026 amounted to Rs. 1,643 million, compared to Rs. 1,438 million reported a year ago. Value Added Tax (VAT) on Financial Services increased from Rs. 1,260 million to Rs. 1,402 million and the Social Security Contribution Levy (SSCL) increased from Rs. 175 million to Rs. 195 million, marking an 11.25 % increase over the corresponding period.

The bank’s total assets increased from Rs. 921 billion to Rs. 943 billion during 1Q 2026, reflecting steady growth over the previous quarter. The bank actively pursued new-to-bank loans and deposits while retaining its existing customer base. Loans and advances grew to Rs. 628 billion and deposits rose to Rs. 743 billion. The bank’s Current Account Savings Account (CASA) ratio was maintained at 28%. 

As of 31 March 2026, the bank said it remained well-capitalised, with capital adequacy ratios comfortably above regulatory minimums. The CET1 and Total Tier 1 Capital Ratios were 11.4%, while the Total Capital Ratio stood at 16.38%, reflecting a strong capital base.

The bank maintained the Liquidity Coverage Ratio (LCR) well above the statutory requirement. All Currency LCR Ratio and the Rupee LCR Ratio were maintained at 192.49% and 188.3%, respectively. 

Return on Equity (ROE) stood at 14.39% (2025: 15.89%) and Return on Average Assets (PBT) stood at 1.98% (2025: 2.31%) for the year under review. 

The bank’s earnings per share stood at Rs. 4.57 in 1Q 2026 compared to Rs. 4.34 reported in the previous year. The bank’s net asset value per share stood at Rs. 128.86 as at 31 March 2026 (Group: Rs. 132.17).

During the quarter, Seylan Bank expanded its flagship CSR initiative by opening two Seylan Pahasara Libraries, bringing the total number of libraries established to 291. This milestone underscores the bank’s continued commitment to fostering education and supporting underprivileged schools across the island by improving access to knowledge and learning resources.

The National Long-Term Rating of Seylan Bank was upgrade by two notches to A+(lka) with a Stable Outlook by Fitch Ratings in 2025.