Seylan Bank June net up 25% but asset quality weakens

3 August 2017 12:01 am - 0     - {{hitsCtrl.values.hits}}

A A A

Seylan Bank PLC reported earnings of Rs.3.74 a share or Rs.1.32 billion for the June quarter (2Q17), recording an increase of 25 percent year-on-year (YoY) amid weaker growth in loans, compressed margins and higher loan-loss provisions, the interim results of the bank showed. 


The bank, with an asset base of Rs.370 billion, managed to grow its loans by about Rs.7.7 billion during the six months, while the deposits grew by some Rs.6.7 billion, relatively weaker for a bank of its size. 


The bank on a standalone basis has a loan book of little under Rs.250 billion and a deposit base of Rs.280.2 billion.  The bank’s net interest income rose by 15 percent YoY to Rs.3.67 billion but the interest expenses rose much faster than the increase in interest income, exerting pressure on the margins.  As a result, the net interest margin fell by 21 basis points to 3.98 percent.


The low-cost deposits measured by the current and savings account (CASA) ratio also fell by about 100 basis points to 31.6 percent during the six months ended June 30, 2017.

Meanwhile, the bank made higher provisions against some selected clients as the specific provisions rose to Rs.684.8 million from Rs.103.8 million YoY. 


Seylan said these were some impairments made on “legacy NPAs that was made due to the delay experienced in the settlement of dues by the Compensation Tribunal and another payment to be received as a secured creditor with the liquidation of entity concerned”. 


The soar loan portfolio also rose as the gross non-performing loan ratio increased to 5.16 percent from 4.47 percent in December 2016. 


The net fee and commission income rose by 23 percent YoY to Rs.903.1 million for the quarter.  
Meanwhile, for the six months ended on June 30, 2017, the banking group reported earnings of Rs.6.13 per share or Rs.2.14 billion net profit, recording an increase of little under 24 percent YoY. 
The net interest income for the period was Rs.7.29 billion, up 18 percent YoY. 


Both specific and general provisions rose substantially. 


The bank’s Tier I and Tier II capital adequacy ratios stood at 10.42 percent and 12.67 percent, respectively, higher than the regulatory minimums, but a higher growth in assets could weaken the capitalization. 

Chairman Ravi Dias and Director/CEO Kapila Ariyaratne

As of June 30, 2017, the government held little over a 32 percent stake in Seylan Bank PLC through Sri Lanka Insurance Corporation Limited, the Employees’ Provident Fund and Bank of Ceylon. 
Brown & Company PLC and LOLC Investments Limited held 13.97 percent and 9.55 percent stakes, respectively. 

 

 

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 

  Comments - 0

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 

 

Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment




Frontline cops charge negligence by high-ups worsened police cluster

The police have done an invaluable service in the frontlines to combat the CO

US Vice President-Elect Kamala Harris’s Key Sri Lankan Tamil Aide

An overwhelming feeling of relief has descended upon the world-not merely th

The virus may be spreading much faster than official data suggest

The daily case reports from the Epidemiology Unit are the only data we have t

Credentials of official raise controversy

Amila Ishan Kankanamge, the Government appointed non-Executive Director to Mo

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.