Seylan Bank posts Rs. 1.5 b net profit in 1Q

Seylan Bank has reported a Profit Before Tax of Rs. 1.5 billion in Q1 2022, up by 5% from a year earlier. 

CEO Kapila Ariyaratne

Net Interest Income (NII) of the bank for the three months ended 31 March stood at Rs. 6.8 billion, a growth of 22.51% in the period under review. Interest income increased by 13.97% amounting to Rs. 13.3 billion. Interest expenses stood at Rs. 6.5 billion recording an increase from Rs. 6.1 billion for the corresponding period due to the increase in market rates during the period.

Net Fee and Commission Income recorded a notable growth of 24.20% to Rs. 1.437 billion from Rs. 1.157 billion mainly due to increase in Card Related Income, Trade Finance Related Fees, Other Financial Services Related Income such as commission income and E-banking etc. which offset to a degree by the reduction in fees from Guarantees as well as fees related to Loans and Advances.

The bank recorded a total operating income growth of 21.80% amounting Rs. 9.1 billion during the period under review compared to Rs. 7.5 billion in the correspondent year. The bank’s net gain from trading recorded Rs. 3.6 billion in 1Q 2022 compared to a loss of Rs. 0.6 billion in 1Q 2021, mainly due to an increase in Net Gain on Derivatives Financial Instruments. Other operating income generated a loss of Rs. 2.8 billion compared to a profit of Rs. 1.2 billion in correspondent year.

Total Expenses recorded an increase of 6.22% from Rs. 3.4 billion in the 1Q of the previous year to Rs. 3.6 billion during the period under review. The bank’s personnel expenses increased by 6.64 % to Rs. 2.1 billion in 1Q 2022 compared to Rs. 1.9 billion in 1Q 2021. Establishment expenses increased by 5.66% to Rs. 1.5 billion during the period under review. 

The bank said it continued to focus on widening the roll-out of lean initiatives and automation across the bank and rationalising expenditure on key controllable cost lines and inculcating a culture of working smarter across all the functions by the employees.

The bank recorded impairment provision of Rs. 3.4 billion for the 1Q 2022 compared to Rs. 2.2 billion for the correspondent year as a result of the increase in additional provision accounted for foreign currency denominated instruments with the country downgrading – Debt repayments.

Income tax expenses stood at Rs. 413.2 Million which is a 5.36% increase from the comparative period which stood at Rs. 392.2 Million.

Overall, the bank recorded a Profit Before Tax (PBT) of Rs. 1.5 billion against Rs. 1.4 billion in 1Q 2021 demonstrating a growth of 4.95%. Similarly, Profit After Tax (PAT) was recorded as Rs. 1.1 billion against Rs.  1.0 billion reported in 1Q 2021.

The bank achieved Rs. 643.1 billion of Total Assets as of 31 March 2022, resulting 5.85% growth compared to 31 December 2021. Loans and advances portfolio of the bank recorded a growth of 4.56% to Rs. 462.1 billion during the 1Q 2022 and this reflects the inflation of the book by currency deprecation as well. The growth in credit was driven primarily by Term loans, Overdrafts and Packing Credits.

The overall deposit base recorded a growth of 5.52% to Rs. 515.6 billion by 1Q 2022 Bank’s CASA ratio (Current and Savings) stood at 34.24%.

Seylan Bank said it remained adequately capitalised, with the key capital adequacy ratios above the regulatory minimum requirements and recorded 9.78% as the bank’s Common Equity Tier 1 (CET 1) Capital/ Total Tier 1 Capital Ratio and 12.78% as the Total Capital Ratio as at end March 2022.

Bank maintained its liquidity position above the required minimum ratios, during the quarter under review. The Statutory Liquid Asset Ratio (SLAR) for the Domestic Banking Unit and the Foreign Banking Unit were maintained at 23.32% and 22.65% respectively as at end of first quarter 2022.

The Return on Equity (ROE) stood at 8.18% for the period under review, compared to 9.07% recorded in 2021. The Return on Average Assets (ROAA) recorded as 0.94% in 1Q 2022.

Earnings per Share (EPS) in 2021 stood at Rs. 1.82, a slight increase compared to the Rs. 1.74 recorded in the comparative year, while net assets value per share recorded at Rs. 88.31 (Group Rs. 91.46).