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Saturday Nov 02, 2024
Wednesday, 30 October 2024 00:24 - - {{hitsCtrl.values.hits}}
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| Chairman Buwaneka Aluwihare |
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| CEO Ramesh Jayasekara |
Seylan Bank has recorded a Profit after Tax of Rs. 6,593 million for the nine months ended 30 September 2024 with a growth of 46.65% against Rs. 4,496 million reported in the corresponding period of 2023 despite a challenging environment.
The bank recorded a Profit before Tax (PBT) of Rs. 10,608 million for the nine months ended 30 September 2024, against Rs. 7,181 million reported in the corresponding period of 2023 demonstrating a growth of 47.72%.
Statement of Financial Performance
Net Interest income decreased from Rs. 30,554 million to Rs. 27,262 million, a reduction of 10.77% compared with the previous year for the nine months ended 30 September 2024, corresponding to reduction in Net Interest Margin from 5.76% in 2023 to 5.03% in Q3 2024. The bank’s net fee based income recorded a growth of 8.10% from Rs. 5,392 million to Rs. 5,829 million during nine months ended 30 September 2024, mainly due to increase in income from cards, remittances and other services relating to lending.
The bank’s total operating income was at Rs. 34,264 million, a decrease of 8.32% compared to Rs. 37,373 million recorded in the corresponding period of 2023, driven mainly by the contraction of net interest margins during 2024.
Total Operating Expenses recorded an increase of 13.20% from Rs. 13,846 million to Rs. 15,674 million for the nine months ended 30 September 2024. Personnel expenses increased by 1,068 million mainly due to increase in the staff benefits based on the collective agreement. Other Operating expenses (excluding depreciation and amortisation expenses) too increased by 12.75% due to increase in prices of consumables and services over the period. The bank continues to take relevant measures to curtail costs through cost reduction initiatives.
The bank recorded an impairment charge of Rs. 4,150 million during the nine months ended 30 September 2024 against Rs. 13,447 million reported in corresponding period of 2023 with a reduction of 69.14%, mainly due to enhanced credit quality and strong recovery initiatives. The impairment charge on Loans and Advances amounts to Rs. 4,189 million (2023 – Rs. 11,912 million) and impairment reversal on other instruments Rs. 39 million (2023 – 1,535 million) for the nine months ended 30 September 2024. The bank has ensured the impairment provision is made to capture the changes in global and local economy, credit risk profile of customers and credit quality of the bank’s loan portfolio in order to ensure adequacy of provisions recognised in the financial statements.
Income tax expenses stood at Rs. 4,015 million which is a 49.51% increase over the comparative period, which stood at Rs. 2,685 million due to increase in profits. Value Added Tax on Financial Services increased for the nine months from Rs. 2,544 million to Rs. 3,365 million in 2024 which is a 32.28% over the corresponding period in 2023. Social Security Contribution Levy increased for the nine months from Rs. 355 million to Rs. 467 million in 2024 which is a 31.70% increase over the corresponding period in 2023.
Overall, the bank recorded a Profit before Income Tax (PBT) of Rs. 10,608 million in nine months ended 30 September 2024, against Rs. 7,181 million reported in corresponding period in 2023 demonstrating a growth of 47.72%. Similarly, Profit after Tax (PAT) was recorded as Rs. 6,593 million in the nine months ended 30 September 2024 with a growth of 46.65% over the corresponding period in 2023.
Statement of Financial Position
The bank’s Total Assets were recorded at Rs. 734 billion as of 30 September 2024. Loans and Advances net of Impairment were recorded at Rs. 442 billion. Local currency Loans and Advances (Gross) increased by Rs. 8 billion, while foreign currency Loans and Advances (Gross) contracted by Rs. 1 billion partly due to local currency appreciation. Customer Deposits were recorded at Rs. 598 billion as of 30 September 2024. Local currency deposits increased by Rs. 15.47 billion, while foreign currency deposits contracted by Rs. 8.39 billion again mainly due to the local currency appreciation.
Key financial ratios and indicators
Key financial ratios and indicators of Seylan Bank PLC remained healthy as of 30 September 2024. The capital adequacy ratios were well above the regulatory minimum requirements and recorded 12.25% as Common Equity Tier 1 Capital Ratio & Total Tier 1 Capital Ratio and 17.05% as the Total Capital Ratio.
All Currency Liquidity Coverage Ratio and the Rupee Liquidity Coverage Ratio were maintained at 442.64% and 509.82% respectively, which is well above the regulatory minimum requirements. The bank’s Net Stable Funding Ratio as at 30 September 2024 stood at 139.50%.
The bank’s Asset Quality Ratio of Impaired Loan (Stage 3) Ratio as at 30 September 2024 stood at 3.05% (2023 – 3.85%). Impairment (Stage 3) to Stage 3 Loans Ratio, which is considered the Stage 3 Provision Cover Ratio was recorded at a healthy 72.85% (2023 – 68.29%), well above the industry average of 51% indicating prudent provisioning adopted by the bank.
The Return on Equity (ROE) stood at 13.87% (2023 – 10.88%) and Return on Average Assets (profit before tax) stood at 1.96% (2023 – 1.45%) for the period under review, recording a significant improvement over last year.
The bank’s Earnings per Share stood at Rs. 10.37 for the nine months ended 30 September 2024 compared to Rs. 7.07 reported in corresponding period of the previous year. The bank’s Net Assets Value per Share stood at Rs. 104.22 as at 30 September 2024 (Group Rs. 107.36).
The bank opened 29 “Seylan Pahasara Libraries” during the nine months ended 30 September 2024 taking the total number to 254 libraries, clearly signifying the bank’s commitment to foster education and support children across the island.
