Sri Lanka’s Seylan Bank PAT surges 79% to Rs 4.49 billion for nine months
Daily FT: Seylan Bank has announced an impressive Profit After Tax (PAT) of Rs. 4.49 billion for the nine months ended 30 September 2023, representing a 79.47% surge in growth compared to Rs. 2.5 billion in the corresponding period last year, demonstrating resilience in overcoming challenging market and economic conditions.
The Bank reported substantial growth in profitability for the first nine months of 2023. Profit before Tax (PBT) soared 100% to Rs. 7.18 billion versus Rs. 3.58 billion in the same period last year, driven overall by revenue and lower impairment charges.
Core revenue streams such as growth in Net Interest Income, and Net Fee and Commission Income accelerated total operating income for the first nine months of 2023 which grew 6.19% to Rs. 37.37 billion, up from Rs. 35.19 billion in the same period of 2022.
Net interest income at Seylan Bank expanded 9.28% to Rs. 30.55 billion through the first three quarters of 2023, up from Rs. 27.96 billion. Fee-based income rose 19.29% to Rs. 5.39 billion from Rs. 4.52 billion in the comparative 2022 period, led by debit/credit card income, trade commission income, and remittance growth. Additionally, the bank was able to maintain a steady Net Interest Margin of 5.98% during the period under review.
The bank’s total expenses increased by 25.71%, reaching Rs. 13.85 billion for the same period. This rise can be attributed to factors such as adjustments made for staff benefits and rising costs of consumables and services.
Seylan Bank recorded an impairment charge of Rs. 13.45 billion during the nine months ending September 2023, reflecting a 28.61% reduction compared to the corresponding period in 2022. The impairment provision was made to account for changes in the macro economy and the credit risk profile of customers.
The bank’s balance sheet remained healthy, with asset growth to Rs. 693 billion as of 30 September 2023. While loans and advances were recorded at Rs. 412 billion, deposits grew by 3.17%, reaching Rs. 565 billion, reflecting progress in both Rupee and Foreign Currency Deposits.
Key financial ratios and indicators of the bank remained strong as of 30 September 2023. Maintaining a healthy Total Capital Adequacy Ratio of 15.29%, the bank’s ratios were well above the regulatory minimum requirements. The overall Statutory Liquid Asset Ratio (SLAR) was also robust at 39.10%, again ensuring compliance with statutory requirements.
Despite the tough economic conditions, the bank has successfully delivered excellent growth in core revenue streams, growing profits, revenues and deposits. Its strong capital and liquidity position and prudent management has provided a buffer against market volatility.
OSL take:
Sri Lanka’s banking sector has shown its strength and resilience through the years and has also shown an impressive performance in the past few months even amidst challenging economic conditions. It is also indicative of the overall strength, growth and resilience of Sri Lanka’s economy. A strong banking sector is a prerequisite for any country working towards becoming an emerging business destination. With Sri Lanka’s geographical positioning in the Indian Ocean and the many trade agreements as well as trade concessions enjoyed by the country, the strong banking sector would further support Sri Lanka become an emerging business destination in the South Asian region. The banking sector has also expanded business opportunities for foreign businesses/investors. The growing business potential in Sri Lanka’s banking sector is evident in the recent acquisition of one of the country’s private bank – Union Bank – by international business tycoon Binodh Chaudhary. Given the strength of the country’s banking sector, foreign businesses/investors could confidently explore the expanding opportunities in Sri Lanka. Also, foreign businesses could also look at investing in Sri Lanka’s banking sector.
| Article Code : | VBS/AT/20231106/Z_8 |