Seylan Bank ups PAT by 77% to Rs. 4.56 b in 1H

Thursday, 1 August 2024 04:09 - - {{hitsCtrl.values.hits}}

Profit before Tax up 76% to Rs. 7.3 b
Liquidity Coverage Ratio (LCR): All currency - 412.63% and rupee - 472.95%
Total Capital Adequacy Ratio at 15.35%; Impaired Loans Ratio at 3.50%

Chairman Buwaneka Aluwihare

CEO Ramesh Jayasekara

Seylan Bank said yesterday it recorded a robust performance with Profit After Tax (PAT) of Rs. 4,558 million for the six months (H1) ending 30 June 2024, reflecting a remarkable 77% growth from the Rs. 2,575 million recorded in the same period in 2023.

The Profit Before Tax (PBT) reached Rs. 7,331 million, showing a 76% increase over the previous year, despite challenging market conditions.

The Bank’s Net Interest Income decreased by 9.18% from Rs. 20,468 million to Rs. 18,590 million, with the Net Interest Margin reducing to 5.17% from 5.76%. Net Fee-based Income grew by 6.29%, primarily due to increases in income from Cards, Remittances, and other lending services. Total Operating Income stood at Rs. 23,279 million, a decrease of 5.41% compared to the same period last year, largely due to a reduction in net interest margins. Other income, comprising net gains from trading and de-recognition of financial assets, rose by 52%.

The Bank’s operating expenses increased by 13.80%, from Rs. 9,128 million to Rs. 10,388 million, driven mainly by an 18.69% rise in personnel expenses due to increased staff benefits. Additionally, the Bank recorded an impairment charge of Rs. 2,956 million, a 69% reduction from the Rs. 9,559 million reported in 1H 2023, attributed to improved credit quality and effective recovery initiatives.

Income tax expenses rose by 75.31% to Rs. 2,773 million, while Value Added Tax on Financial Services and Social Security Contribution Levy increased by 47.43% and 47.07%, respectively, over the previous year.

As of 30 June 2024, Seylan Bank’s total assets were recorded at Rs. 725 billion, with loans and advances net of impairment at Rs. 434 billion. Deposits stood at Rs. 603 billion, with a notable increase in local currency deposits and a reduction in foreign currency deposits due to the local currency appreciation.

The Bank maintained a healthy capital adequacy position, with Common Equity Tier 1 and Total Tier 1 Capital Ratios at 12.40%, and a Total Capital Ratio of 15.35%. The Liquidity Coverage Ratio (LCR) for all currencies was 412.63%, and the Rupee LCR was 472.95%, well above statutory requirements. The Impaired Loan (Stage 3) Ratio was 3.50%, and the Stage 3 Provision Cover Ratio stood at 70%, well above the industry average of 51%, indicating prudent provisioning practices.

Return on Equity (ROE) improved to 14.60%, with Earnings per Share increasing to Rs. 7.17. The Bank’s Net Asset Value per share was Rs. 101.37. Moreover, Seylan Bank successfully completed a Rs. 10 billion Basel III compliant Tier 2 debenture issuance, reflecting strong investor confidence and the Bank’s robust financial health.