Seylan Bank records an impressive PAT of LKR 2.29 Bn – Q1 2024
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Seylan Bank records an impressive PAT of LKR 2.29 Bn – Q1 2024

  • Profit before Tax – LKR 3,704 Mn up by 30%
  • Profit after Tax – LKR 2,295 Mn up by 21%
  • Overall Statutory Liquid Assets Ratio (SLAR) of 42%
  • Total Capital Adequacy Ratio of 84%

Seylan Bank recorded a Profit before Tax (PBT) of LKR 3,704 Mn in Q1 2024, against LKR 1,721 Mn in Q1 2023 demonstrating a significant growth of 115%.

For the 3 months ended 31st March 2024, Seylan Bank recorded a Profit after Tax of LKR 2,295 Mn, a remarkable growth of 102% against LKR 1,135 Mn recorded in the corresponding period of 2023, despite a challenging environment.

Statement of Financial Performance

Net interest income decreased from LKR 11,388 Mn to LKR 9,371 Mn, a decrease of 17.71% over the previous year for the 3 months ended 31st March. Net Interest Margin also recorded a reduction from 5.76% in 2023 to 5.24% in Q1 2024. The Bank’s net fee based income recorded a growth of 3.62% from LKR 1,773 Mn to LKR 1,837 Mn during Q1 2024, mainly due to increase in Card Related Income, Commission on Guarantees and income from Trade.

The Bank’s total operating income was at LKR 11,707 Mn, a decrease of 12.51% compared to LKR 13,380 Mn recorded in the corresponding period of 2023, driven mainly by reduction in Net Interest Income.

Other income captions comprising of net gains from trading activities, net gains from de-recognition of financial Assets, and net other operating income, reflected an overall increase of 127.22% compared to the corresponding period of 2023.

Total Operating Expenses recorded an increase of 15.42% from LKR 4,441 Mn to LKR 5,126 Mn for the 3 months ended 31st March 2024. Personnel expenses increased by 21.49% from LKR 2,237 Mn to LKR 2,718 Mn mainly due to increase in the staff benefits based on the recently concluded collective agreement. Other Operating expenses and depreciation and amortization expenses too increased by 9.25% due to increase in prices of consumables and services over the period. The Bank will continue to take relevant measures to curtail costs through various cost reduction initiatives.

The Bank recorded an impairment charge of LKR 1,555 Mn in Q1 2024 against LKR 6,366 Mn reported in Q1 2023 with a reduction of 75.57%, mainly due to enhanced credit quality and strengthening of recovery initiatives. The impairment charge on Loans and Advances amounts to LKR 1,628 Mn (2023 – LKR 5,287 Mn) and impairment charge on Foreign Currency Denominated Bonds LKR 45 Mn (2023 – 1,294 Mn) for the 3-month period ended 31st March. The Bank has ensured the impairment provision is made to capture the changes in the global & local economy, credit risk profile of customers and the credit quality of the Bank’s loan portfolio in order to ensure adequacy of provisions recognized in the financial statements.

Income tax expenses stood at LKR 1,409 Mn which is a 140.67% increase over the comparative period, which stood at LKR 585 Mn, mainly due to increase in profits. Value Added Tax on Financial Services increased for the first three months from LKR 735 Mn to LKR 1,160 Mn in 2024 which is a 57.77% over the corresponding period. Social Security Contribution Levy increased for the first three months from LKR 117 Mn to LKR 161 Mn in 2024 which is a 37.35% over the corresponding period.

Overall, the Bank recorded a Profit before Tax (PBT) of LKR 3,704 Mn in Q1 2024, against LKR 1,721 Mn in Q1 2023 demonstrating a growth of 115.30%. Similarly, Profit after Tax (PAT) was recorded as LKR 2,295 Mn in Q1 2024 with a growth of 102.21% over the corresponding period in 2023.

Additionally the Bank opened 06 “Seylan Pahasara Libraries” during the quarter and the total number has now reached 231 as of 31.03.2024.

Statement of Financial Position

The Bank’s total assets were recorded at LKR 712 Bn as of 31st March 2024. Loans and Advances net of Impairment were recorded at LKR 427 Bn and the contraction was partly due to the impact from local currency appreciation. Deposits reflected a marginal reduction to LKR 590 Bn. Local currency deposits increased by LKR 15.46 Bn, while foreign currency deposits contracted by LKR 16.61 Bn mainly again due to local currency appreciation.

Key financial ratios and indicators

Key financial ratios and indicators of Seylan Bank PLC remained sound as of 31st March 2024. The capital adequacy ratios were well above the regulatory minimum requirements and recorded 12.69% as Common Equity Tier 1 Capital Ratio & Total Tier 1 Capital Ratio and 15.84% as the Total Capital Ratio.

The Statutory Liquid Asset Ratio (SLAR) for the Overall Bank, Bank’s Domestic Banking Unit and the Bank’s Foreign Currency Banking Unit were recorded as at 39.42%, 39.54% and 24.76% respectively as at 31st March 2024. The Bank also maintained the LCR well above the statutory requirement. All Currency LCR Ratio and the Rupee LCR Ratio were maintained at 374.42% and 416.60% respectively.

The Banks’s Asset Quality Ratios of Impaired Loan (Stage 3) Ratio and the Impairment (Stage 3) to Stage 3 Loans Ratio, which is considered as the Stage 3 provision cover ratio stood at 3.89% and 66.75% respectively.

The Return on Equity (ROE) stood at 14.94% (2023 – 10.88%) and Return on Average Assets (profit before tax) stood at 2.07% (2023 – 1.45%) for the period under review, recording an improvement. The Net Interest Margin (NIM) stood at 5.24% (2023 – 5.76%).

The Bank’s Earnings per Share stood at LKR 3.61 in Q1 2024 compared to LKR 1.79 reported in Q1 of the previous year. The Bank’s Net Assets Value per Share stood at LKR 98.11 as at 31st March 2024 (Group LKR 101.21).

 

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