Seylan 3Q profits edge down over gilt-edged losses

26 October 2015 03:26 am - 0 - {{hitsCtrl.values.hits}}

A A A

The losses made on investments in government securities and related financial assets narrowed the group net profits of Seylan Bank PLC’s September quarter (3Q15) by 4.6 percent year-on-year (yoy) to just over Rs.1 billion, the interim results released to the Colombo Stock Exchange showed.
The Earnings per Share (EPS) was down to Rs.2.9 from Rs.3.04.
Due to the slight upward trend seen in the interest rates during 3Q15, the banking group made both mark to market loss and realized loss from its investments in treasury bills and bonds, resulting in a net trading loss of Rs.204 million against the Rs.606.1 million gain made during the corresponding quarter last year.
The net gain from the financial investments too took a steep decline to just Rs.66.2 million from Rs.640 million made in the corresponding quarter last year due to same reasons.
Meanwhile, the bank made gains from foreign exchange conversions which rose by 113 percent yoy to Rs.267 million. Further the net fee and commission income rose by 14 percent Rs.676 million.
However, Seylan Bank has been making steady progress in its bottom-line as it recorded over Rs.1 billion after tax profits for two consecutive quarters while increasing its asset quality.

The bank had to make lower provisions for specific customers as its individual impairments declined by 74 percent yoy to Rs.173.5 million because of a large non-performing loan recovery.
The collective impairment made a provision reversal of Rs.221.6 million to result in a total impairment reversal of Rs.41 million for the quarter against the Rs.982 million provisions made during the corresponding quarter of last year.
The bank further increased its asset quality to record a gross non-performing loan ratio of 6.12 percent from 7.69 percent in December end. However, this is still below the industry average which hovers around 4.5 percent.
This is despite the bank expanding its gross loans and advances portfolio by 10.2 percent or Rs.16.5 billion for the nine months to Rs.178.5 billion.
Leasing portfolio accounted for almost quarter of this growth but the credit card portfolio declined by Rs.300 million during the nine months.
The bank on a standalone basis had a total asset base of Rs.277.2 billion, an increase of 11.21 percent during the nine months.
The bank operates with 159 branches and 3,012 employees and the bank’s return on its assets edged up to Rs.2.08 from Rs.2.05 nine months ago.
Meanwhile, the core-banking operations took a dent as its net interest income edged down by 1.27 percent yoy Rs.3.02 billion. This is because the net interest margin declined to 4.54 percent from 4.92 percent at the end of December 2014.
Under the lower interest rate environment, the banking sector had to offer slightly higher interest rates to lure more customer deposits during this period while having to re-price the loan book downwards.
The bank increased its deposit base by 7.3 percent or Rs.13.5 billion to Rs.199.5 billion. Seylan bank operates with a healthy low cost Current And Savings Accounts (CASA) base just under 40 percent.
The operating expenses rose slightly by 7 percent yoy to Rs.2.15 billion of which the personnel expenses rose by 18 percent yoy to Rs.1.08 billion.
Meanwhile, for the nine months ended September 30, 2015 the Seylan Banking group increased its net profits by 20 percent yoy to Rs.2.7 billion (EPS – Rs.7.87).
The Return on Equity rose to 15.03 percent from 13.45 percent during the first nine months.
The bank operates with adequate liquidity as both regulatory Tier I and Tier II capital adequacy ratios stood at 12.44 percent and 13.13 percent respectively, well above the minimum requirement of 5 percent and 10 percent respectively.
As of September 30, 2015 Sri Lanka Insurance Corporation Limited held 15 percent stake while Brown and Company PLC and Employees Provident Fund held 13.87 percent and 9.86 percent each in the bank being the second and the third largest shareholders, respectively.
In March this year, NDB Bank PLC bought 8.5 percent stake in Seylan Bank PLC which many believed strategic. As of September 30, 2015, NDB Bank PLC had an 8.72 percent stake being the fifth largest shareholder.

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

Comments - 0

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.

Seylan 3Q profits edge down over gilt-edged losses

Comments - 0

Add comment

RECOMMENDED

‘Spike in blast fishing’ poses renewed threats to Sri Lanka’s marine ecosystems

UDA owned land in Thalawathugoda; UDA Minister Prasanna Ranatunga under the spotlight for forceful occupation of reserved land

Loss-making SMIB faces political pressure in recovering loans

Baltimore Bridge Collapse: MV Dali, SL authorities anchored in mystery?

Has Sri Lanka become a potential hub for the illegal wildlife trade?

Spotlight on Moragahakanda Development Project Moragolla villagers lose livelihoods and down to one meal a day

Ambitious Sri Lankan jobseekers ‘trafficked into Ukraine war zones’

Most Viewed in News

Sri Lanka now has highest visa costs in Asia: Tourism stakeholders

Ranil’s evolving strategy to win 2024 presidential poll

Attempt to send 17 year-old-boy to London on forged documents foiled

AstraZeneca admits for first time its COVID vaccine can cause rare side effect

Oil and gas exploration halted by prolonged legal dispute

Gota fires back at Cardinal, rebuts allegations

MIRROR CRICKET

World Cup finalist named in USA T20 World Cup 2024 squad

Co-hosts West Indies announce squad for T20 World Cup

LPL 2024 Player Auction on May 21

ICC announce Match Officials for ICC Men’s T20 World Cup 2024

TODAY'S HEADLINES

Protesting medical students tear-gassed

Fisherman arrested for amassing Rs.90Mn assets beyond his means

Sri Lanka drops 15 positions in World Press Freedom Index: Ranks 150

Young Lawyers flay Tiran for calling eliminating criminals not a sin

World Cup finalist named in USA T20 World Cup 2024 squad

Co-hosts West Indies announce squad for T20 World Cup

LPL 2024 Player Auction on May 21

ICC announce Match Officials for ICC Men’s T20 World Cup 2024