Seylan Bank records impressive growth

Seylan Bank recorded an impressive quarterly performance with Profits before Income Tax reaching Rs. 728 million for the three months ended March 31, 2013. Profits after tax reached 505 million, a 26.7% increase compared to the Rs. 399 million reported in the corresponding period in 2012. The interim Financial Statements have been prepared in accordance with LKAS/SLFRS. Despite lower than expected credit demand and industry wide pressure on interest margins, Net Interest income increased by 5.8% to Rs. 2.16 billion for the three months ended March 31, 2013, resulting from selective growth in quality advances.

General Manager and CEO, Seylan Bank, Kapila Ariyaratne

Net fee and commission income increased by 20% from Rs. 384 million to Rs. 461 million during Q1-2013. This was achieved in spite of an overall reduction in import related activities through the bank diversifying into various other trade and fee income generating services.

The Bank grew its deposits base from Rs. 146.7 billion to Rs. 150.1 billion during Q1 and its Net Advances portfolio from Rs. 124.7 billion to Rs. 125.9 billion during the three months under review, despite fierce competition for deposits and a high interest rate environment.

The bank also improved its asset quality through focused, sustained and effective recovery efforts. This enabled the bank to reduce its Gross NPA by a further Rs. 421 million during Q1-2013.

Preparing for future growth, the Bank raised Rs 2 billion though a successful Debenture issue in February that was over-subscribed on the opening day. The Bank intends to invest on identified key areas which are in line with the Bank's future growth strategies.

The Bank's total Capital Adequacy ratio stood at 14.08% at the end of Q1-2013. The recent debenture issue (Rs 2 billion) has not been included in the total Capital Adequacy computation for Q1-2013, since CBSL approval was obtained in April 2013. Once these funds are included, the Bank's total Capital Adequacy would exceed 15.5%, one of the highest in the local banking industry. Earnings per share improved to Rs. 1.49 from Rs. 1.18 reported in the corresponding quarter last year.