Seylan bank posts record Rs. 10 b PAT in 2024

Chairman Buwaneka Aluwihare

CEO Ramesh Jayasekara

Seylan bank yesterday announced the achievement of a Profit before Income Tax (PBT) of Rs. 16.04 billion for the period under review with a 59% growth over the previous year, while recording a Profit after Tax (PAT) of Rs. 10.05 billion for the year with a 61% growth over the previous year, demonstrating a robust performance despite challenging macro-economic conditions. 

The reported PAT of Rs. 10 billion is the highest performance in the bank’s 36 year history.

Net Interest Income of the bank was reported as Rs. 37 billion in 2024 compared to Rs. 40 billion reported in 2023 with a decline of 8% corresponding to reduction in net interest margins during 2024, due to reduction in market interest rates throughout the year.

Net fee and commission income of the bank reported a growth of 7% to Rs. 8 billion compared to Rs. 7.4 billion reported in the previous year. The growth in 2024 was mainly due to increase in income from cards, remittances and other services relating to Lending.

The bank’s net gains from trading reported a gain of Rs. 0.46 billion, a decrease of 44% over the gain of Rs. 0.82 billion reported in previous year due to exchange / interest rate changes. 

Net gains / (losses) from de-recognition of financial assets reported a loss of Rs. 0.26 billion in 2024, compared to the gain of Rs. 0.15 billion reported in the previous year. The loss due to the restructuring of SLISBs amounted to Rs. 2.71 billion and was recorded in Q4 2024. 

Other Operating Income of the bank was reported as Rs. 1 billion in 2024, a growth of 5% over the previous year. This increase is mainly from foreign exchange income, which represents both revaluation gain/ (loss) on the bank’s net open position and realised exchange gain/ (loss) on foreign currency transactions.

The bank’s Total Operating Income decreased by 11.6% to Rs. 44 billion in 2024 compared to Rs. 49 billion in the previous year mainly due to decrease in net interest income and the loss on restructuring of SLISBs.

The bank made impairment provision to capture the changes in the macro 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 impairment charge on loans and advances and other credit related commitments amounted to Rs. 6.6 billion (2023 - Rs. 15.5 billion). The impairment reversal due to the SLISBs exchange amounted to Rs. 4.9 billion (2023 – Rs. 1.5 billion charge).

The bank’s personnel expenses increased by 11% to Rs. 10 billion in 2024 mainly due to increase in the staff benefits based on the collective agreement entered in 2024. 

Other operating expenses including depreciation and amortisation expenses too increased by 12% to Rs. 10.4 billion during 2024 compared to Rs. 9 billion reported in 2023 mainly due to increase in prices of consumables and services over the period. The bank continues to take relevant measures to curtail costs through various cost rationalisation initiatives

All taxes reported an increase in 2024 compared to the taxes reported in 2023 mainly due to the increase in taxable income. The bank’s value added tax on financial services increased by 37% to Rs. 4.72 billion compared to Rs. 3.45 billion recorded in the previous year. Further, Social Security Contribution Levy (SSCL) increased by 37% to Rs. 0.66 billion compared to Rs. 0.48 billion recorded in the previous year. The bank’s income tax expense reported a growth of 57% to Rs. 5.99 billion in 2024 compared to Rs. 3.82 billion reported in 2023. The bank’s effective tax rate was 53% in 2024.

Overall, the bank reported a PAT of Rs. 10 billion, the highest ever profits in its 36 year history.

Statement of financial position

The bank’s total assets reached to Rs. 780 billion as at 31 December 2024, a 9% growth during the year under review compared to Rs. 718 billion recorded in the previous year demonstrating sustainable growth of the bank over the years. 

The bank focused on book growth and made efforts to enhance loans and advances in challenging economic and market condition that prevailed during the year. The bank recorded net Loans and Advances at Rs. 463 billion as at 31 December 2024 with a growth of 6% compared to Rs. 438 billion recorded in 2023. The bank’s gross loans and advances increased by Rs. 28 billion to Rs. 525 billion as at 31 December 2024 from Rs. 497 billion recorded as at 31 December 2023. Rupee loans and advances increased by Rs. 20 billion and Rs. equivalent of Foreign Currency Loans and Advances increased by Rs. 8 billion during the year. 

The bank’s Asset Quality Ratio of Impaired Loan (Stage 3) Ratio stood at 2.10% (2023 – 3.85%). As a result of the bank’s prudent provisioning policy, the bank has reported a Stage 3 Provision Cover ratio of 80.90% (2023 68.29%), well above the banking Industry Provision Cover ratio of 54% as at year end. 

The bank focused on customer deposit growth and made necessary arrangements to canvass new to bank deposits while retaining the existing customer base. The bank’s total deposit base grew by 9.33% (Rs. 55 billion) during the year 2024 to reach Rs. 647 billion compared to total deposits of Rs. 592 billion reported in the previous year. The bank’s rupee deposits reported a growth of Rs. 59 billion and Rs. equivalent of FCY deposits reported a contraction of Rs. 4 billion during the year. 

The bank’s CASA base grew from Rs. 177 billion in 2023 to Rs. 187 billion in 2024, which is a 6% growth from the previous year. CASA ratio stood at 28.94% in 2024 compared to 30.01% of the previous year.

Key financial ratios and indicators of Seylan bank PLC remained strong as of 31 December 2024.

The capital adequacy ratios were well above the regulatory minimum requirements and recorded 14.25% as Common Equity Tier 1 Capital Ratio and Total Tier 1 Capital Ratio and 18.59% as the Total Capital Ratio. The Capital Adequacy Ratios have improved compared to previous year mainly due to PAT of Rs. 10 billion and the raising of Debenture of Rs. 10 billion during 2024.

The bank maintained the LCR above the statutory requirement and the All Currency LCR and the Rupee LCR were recorded as 491.37 % and 415.75% respectively.

The Return on Equity (ROE) stood at 15.35% for the year under review compared to 10.88% recorded in 2023. The return on average assets (before tax) was recorded at 2.14% for the year under review compared to 1.45% recorded in 2023. The bank’s Earnings per Share stood at Rs. 15.81 as at end of 2024 compared to Rs. 9.84 as at the end of the previous year. The bank’s Net Assets Value per Share stood at Rs. 110.89 as at the end of 2024 (Group Rs. 114.22) compared to Rs. 98.31 reported as at the previous year end (Group 101.36).

Fitch Ratings upgraded the National Long-Term Rating of Seylan bank by two notches to ‘A+(lka)’ with a Stable Outlook on 21 January 2025.