Seylan Bank posts Rs. 2.7 b net profit in 1Q

Seylan Bank announced yesterday a Profit Before Tax (PBT) of Rs. 4,199 million in Q1 2025, against Rs. 3,704 million in Q1 2024, demonstrating a growth of 13.36%.

For the three months ended 31 March 2025, Profit after Tax (PAT) recorded by Seylan Bank was Rs. 2,761 million, with a growth of 20.29% against Rs. 2,295 million recorded in the corresponding period of 2024.

Net interest income decreased from Rs. 9,371 million to Rs. 8,587 million, a decrease of 8.37% over the previous year for the three months ended 31 March 2025, mainly due to the reduction in market interest rates and repricing of loans and deposits. The bank’s Net Interest Margin (NIM) also recorded a reduction from 4.90% in 2024 to 4.45% in Q1 2025. The bank’s net fee based income recorded a growth of 13.83% from Rs. 1,837 million to Rs. 2,091 million during Q1 2025, and the growth in 2025 is mainly attributable to fee income from loans, cards, remittances, trade and other financial services. 

The bank’s total operating income was recorded as Rs. 11,258 million, a decrease of 3.83% compared to Rs. 11,707 million recorded in the corresponding period of 2024, driven mainly by reduction in Net Interest Income.

Other income captions comprising of net gains from trading activities, net gains from derecognition of financial assets, and net other operating income reflected an increase compared to the corresponding period of 2024. 

Total operating expenses recorded an increase of 4.62% from Rs. 5,126 million in 2024 to Rs. 5,363 million in 2025 for the three months ended 31 March 2025. Personnel expenses increased by 3.22% from Rs. 2,718 million to Rs. 2,806 million, mainly due to increase in staff related benefits. 

Other operating expenses and depreciation and amortisation expenses too increased by 6.19% due to increase in prices of consumables and services over the period. The bank will continue to take relevant measures to curtail costs through various cost initiatives. 

The bank recorded an impairment charge of Rs. 262 million in Q1 2025 against Rs. 1,555 million reported in Q1 2024, with a reduction of 83.17%. The bank has ensured impairment provisions are made to capture the changes in the global and local 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. The bank’s Asset Quality Ratios of Impaired Loan (Stage 3) Ratio stood at 1.98% (2024 – 2.10%), while the Stage 3 Provision Cover Ratio stood at a healthy 80.74% as at 31 March 2025.

Income tax expenses stood at Rs. 1,438 million, which is a 2.08% increase over the comparative period, which stood at Rs. 1,409 million. Value Added Tax on Financial Services increased for the first three months from Rs. 1,160 million to Rs. 1,260 million in 2025, which is an 8.58% increase over the corresponding period. Social Security Contribution Levy increased for the first three months from Rs. 161 million to Rs. 175 million in 2025, which is an 8.58% increase over the corresponding period. 

Overall, the bank recorded a PAT of Rs. 2,761 million in Q1 2025, with a growth of 20.29% over the corresponding period in 2024.

The bank’s total assets increased from Rs. 779 billion to Rs. 785 billion during Q1 2025, demonstrating a steady growth over the previous quarter. The bank also made arrangements to canvass new bank loans and deposits while retaining the existing customer base. Loans and advances of the bank were recorded at Rs. 469 billion and deposits were recorded at Rs. 647 billion. The bank’s CASA ratio was maintained at 29%.

Key financial ratios and indicators of Seylan Bank PLC remained sound as of 31 March 2025. The capital adequacy ratios were well above the regulatory minimum requirements and recorded 13.67% as Common Equity Tier 1 Capital Ratio and Total Tier 1 Capital Ratio, and 17.64% as the Total Capital Ratio. 

The bank maintained the Liquidity Coverage Ratio (LCR) well above the statutory requirement. The All Currency LCR and the Rupee LCR were maintained at 389.25% and 349.51%, respectively. 

The bank’s Asset Quality Ratios of Impaired Loan (Stage 3) Ratio and the Impairment (Stage 3) Provision Cover Ratio stood at 1.98% (2024 – 2.10%) and 80.74% (2024 – 80.90%), respectively.

The Return on Equity (ROE) stood at 15.81% (2024 – 15.35%) and Return on Average Assets (profit before tax) stood at 2.18% (2024 – 2.14%) for the period under review, recording an improvement. 

The bank’s Earnings per Share stood at Rs. 4.34 in Q1 2025 compared to Rs. 3.61 reported in Q1 of the previous year. The bank’s Net Assets Value per Share stood at Rs. 111.94 as at 31 March 2025 (Group Rs. 115.14).