Seylan Bank reports impressive 1H 2023 profitability and strong growth

Chairman Ravi Dias

Director and CEO Ramesh Jayasekara

Seylan Bank has demonstrated exceptional resilience and growth in challenging market conditions, recording an impressive Profit before Tax (PBT) of Rs. 4.2 billion, a 104.65% increase for 1H 2023 compared to the same period in 2022. 

In addition, the Bank achieved a commendable Profit After Tax (PAT) of Rs. 2.6 billion, a 71.29% growth over the corresponding period in the previous year, according to a statement from Seylan. 

The Bank’s strong financial performance is highlighted by key indicators that underscore its pledge to excellence and sustainable growth. The Bank maintained a healthy liquidity position with adequate buffers in terms of liquidity and capital for future growth. 

The Overall Statutory Liquid Assets Ratio was 32.30% as of 1H 2023, ensuring the ability to meet and exceed regulatory requirements and support operations effectively. 

Additionally, reflecting its commitment to maintain a robust financial foundation, Seylan Bank continues to be well capitalised, boasting a Total Capital Adequacy Ratio of 15.51% as of 1H 2023. Demonstrating a further prudent approach is the well-maintained Common Equity Tier 1 Capital Ratio at 11.85%.

Notably, Seylan Bank’s Net Interest (NII) Income increased by 21.47%, reaching Rs. 20.5 billion, while Net Interest Margin remained steady at 6%. The Bank’s net fee-based income also experienced robust growth of 26.72%, amounting to Rs. 3.5 billion, driven by increased earnings from Debit and Credit Card Related Income, Commission on Guarantees, and remittances.

Seylan Bank’s total operating income recorded a notable growth of 13.31%, totalling Rs. 24.6 billion for the first half of 2023. This impressive trajectory can be attributed to the Bank’s strategic focus on enhancing Net Interest Income, Net Fee and Commission Income, and other contributing factors.

While the Bank witnessed a reduction in certain income categories due to fluctuations in foreign exchange rates, Seylan Bank remained steadfast to optimising its cost structure. The total Expenses have increased by 25.88%, reflecting measures taken to enhance employee benefits and adjust to changes in the economic landscape. Despite these challenges, the Bank remains steadfast in implementing cost-efficient strategies to maintain operational excellence.

A key highlight of Seylan Bank’s performance is the prudent management of impairment charges, which decreased by 15.88% from the previous year. The Bank’s commitment to maintaining adequate provisions to reflect changes in the global and local economy, customer credit risk profiles, and loan portfolio quality and expanded recoveries structure are part of its meticulous approach.

The Bank’s diligence to responsible business practices is further demonstrated through contributions to government revenues. Income tax expenses increased by 200%, reflecting higher profits and corporate tax rates. Additionally, Seylan Bank has actively engaged in social responsibility initiatives, contributing to Value Added Tax on Financial Services and Social Security Contribution Levy.

Seylan Bank’s solid financial position is reflected in its total assets of Rs. 689 billion as of 30 June 2023. Loans and Advances were recorded at RS. 421 billion, and deposits reflected a marginal growth to Rs. 549 billion. 

The Return on Equity (ROE) stood at 9.22% and Return on Average Assets (Profit before Tax) reported at 1.23% for the period under review. Additionally, the Statutory Liquid Asset Ratio (SLAR) for the Overall Bank, Bank’s Domestic Banking Unit and the Bank’s Foreign Currency Banking Unit were maintained at 32.30%, 32.13% and 25.22% as at 30 June 2023.

Seylan Bank’s stable performance is further highlighted by Earnings per Share of Rs. 4.18 in 1H 2023, compared to Rs. 2.44 reported in the same period of the previous year.

Driven by new leadership, the Bank is poised to forge ahead towards future growth opportunities and enhanced profitability by focusing on recoveries, strengthening digital services, and streamlining back-end processes. Dedicated to achieving precise targets and tangible outcomes the Bank aims to accelerate its digital transformation, unlock cost efficiencies, heighten operational effectiveness, and rapidly extend its market presence.