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Saturday Nov 09, 2024
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Chairman Ravi Dias
CEO Ramesh Jayaesekara
Seylan Bank yesterday said it posted strong performance in FY23 despite the challenging environment.
The Net Interest Income of the Bank was reported as Rs. 40.1 billion in 2023 compared to Rs. 40.5 billion reported in 2022, a slight 1% drawback due to volatility in interest rates during the year. The Bank’s Net Interest Margin on Average Total Assets stood at 5.76% in 2023 compared to 6.33% in 2022.
Net fee and commission income of the Bank has shown a notable growth of 16 % to Rs. 7 billion from Rs. 6 billion reported in previous year. The growth in 2023 is mainly attributable to fee income from cards, loans and other financial services.
The Bank’s Total Operating Income decreased by 3% to Rs. 49.5 billion in 2023 compared to Rs. 51 billion in the previous year mainly due to decrease in foreign exchange income.
The Bank recorded an impairment charge of Rs. 17 billion during 2023 against Rs. 26 billion reported in the corresponding period of 2022 with a reduction of 36%. The Bank made impairment provision to capture the changes in the macro economy, credit risk profile of customers, and the credit quality of the Bank’s loan portfolio in order to ensure adequacy of provisions recognised in the financial statements. During the year 2023, the impairment charge on Loans and Advances amounts to Rs. 15.3 billion (2022 – Rs. 21 billion) and impairment charge on Foreign Currency Denominated Bonds amounts to Rs. 1.5 billion (2022 – Rs. 4.7 billion).
The Bank’s Personnel Expenses increased from Rs. 8 billion in 2022 to Rs. 9.1 billion in 2023, a 15% growth mainly due to increase in staff benefits and adjustments made as relief allowances to absorb high cost of living and taxes.
Other Operating expenses and depreciation and amortisation expenses too increased by 28% to Rs. 9.3 billion during 2023 compared to Rs. 7.3 billion reported in 2022 mainly due to increase in prices of consumables and services. The Bank will continue to take relevant measures to curtail costs through various cost initiatives.
The Bank’s total operating expenses increased by 21% to Rs. 18.5 billion during the period under review compared to Rs. 15.2 billion recorded in the previous year.
The Bank’s Value Added Tax on Financial Services increased by 31% amounting to Rs. 3.45 billion compared to Rs. 2.65 billion recorded in the previous year due to increase in VAT liable income. Additionally, Social Security Contribution Levy (SSCL) was imposed with effect from 1 October 2022 at the rate of 2.5% on the value addition liable for Value Added Tax on Financial Services. The charge for the year increased from Rs. 0.13 billion in 2022 (only for three months) to Rs. 0.48 billion.
The Bank’s Income Tax Expense reported a growth of 99.5% to Rs. 3.82 billion in 2023 compared to Rs. 1.92 billion reported in 2022, mainly due to impact from rate change and increase in liable income. The Corporate Tax Rate was revised with effect from 1 July 2022 from 24% to 30 % and provisions recorded accordingly.
The Bank recorded a Profit before Tax (PBT) of Rs. 10.08 billion for the period under review with a 52% growth over the previous year while recording a Profit after Tax (PAT) of Rs. 6.26 billion for the year with a 33% growth over the previous year, despite challenging market & economic conditions that prevailed during the period.
The Bank’s total assets grew by 6.7% during the year under review to reach Rs. 718 billion as at 31 December 2023 compared to Rs. 673 billion recorded in the previous year demonstrating the sustained growth of the Bank over the years. Cash and Cash Equivalents, Placements with Banks, Financial Assets recognised through Profit or Loss (Measured at Fair Value), Financial Assets measured at Fair Value through Other Comprehensive Income etc. mainly contributed to the growth in total assets.
The Bank’s Asset Quality Ratios of Impaired Loan (Stage 3) Ratio and the Impairment (Stage 3) to Stage 3 Loans Ratio stood at 3.85% and 68.29% in 2023, compared to 4.98% and 54% in 2022, which reflects a significant improvement in both ratios from the previous year. This is mainly due to appropriate provisions made by the Bank, close monitoring of impaired loans and strengthening recovery actions and processes during the year.
The Bank’s total Deposit Base grew by Rs. 44 billion during the year 2023 to Rs. 591 billion compared to total Deposits of Rs. 547 reported in the previous year. The Bank’s LKR Deposits reported a growth of Rs. 38 billion and FCY Deposits reported a growth of Rs. 6 billion. The Bank focused on growing Deposits by canvassing new Bank deposits, while retaining its existing customer deposit base.
The Bank’s CASA base grew from Rs. 163 billion in 2022 to Rs. 177 billion in 2023 as of 31 December, which is a 8% growth from the previous year. CASA ratio stood at 30% in 2023.
Key financial ratios and indicators of Seylan Bank PLC remained strong as of 31 December 2023.
The capital adequacy ratios were well above the regulatory minimum requirements and recorded 12.52% as Common Equity Tier 1 Capital Ratio & Total Tier 1 Capital Ratio and 15.84% as the Total Capital Ratio. The Capital Adequacy Ratios have increased compared to previous year mainly due to increase in Profits & Reserves for the year ended 31 December 2023.
The Bank maintained the SLAR well above the statutory requirement, during the year under review. The Statutory Liquid Asset Ratio (SLAR) for the Overall Bank, Bank’s Domestic Banking Unit and the Bank’s Foreign banking unit were maintained at 38.04%, 38.51% and 23.28 % respectively as at December 2023.
The Bank also maintained the LCR well above the statutory requirement. The All Currency LCR and the Rupee LCR were maintained at 338.42 % and 355.16% respectively.
The Return on Equity (ROE) stood at 10.88% for the year under review compared to 8.85% recorded in 2022. The Return on Average Assets (before tax) was recorded as 1.45% for the year under review compared to 1.04% recorded in 2022. The Bank’s Earnings per Share stood at Rs. 10.17 as at end of 2023 compared to Rs. 7.66 as at the end of the previous year. The Bank’s Net Assets Value per Share stood at Rs. 98.31 as at the end of 2023 (Group Rs. 101.36) compared to Rs. 94.24 reported as at the previous year end (Group 97.27).
