Seylan Bank recorded a Profit before Tax (PBT) of LKR 10,608 Mn for the 9 months ended 30 September 2024, against LKR 7,181 Mn reported in the corresponding period of 2023 demonstrating a growth of 47.72%.
Statement of Financial Performance
Net Interest income decreased from LKR 30,554 Million to LKR 27,262 Million, a reduction of 10.77% compared with the previous year for the 9 months ended 30 September 2024, corresponding to reduction in Net Interest Margin from 5.76% in 2023 to 5.03% in Q3 2024.
The Bank’s net fee based income recorded a growth of 8.10% from LKR 5,392 Million to LKR 5,829 Million during 9 months ended 30 September 2024, mainly due to increase in income from Cards, Remittances and other services relating to lending.
The Bank’s total operating income was at LKR 34,264 Mn, a decrease of 8.32% compared to LKR 37,373 Mn recorded in the corresponding period of 2023, driven mainly by the contraction of net interest margins during 2024.
Total Operating Expenses recorded an increase of 13.20% from LKR 13,846 Million to LKR 15,674 Million for the 9 months ended 30 September 2024.
Personnel expenses increased by 1,068 Million mainly due to increase in the staff benefits based on the collective agreement.
Other Operating expenses (excluding depreciation and amortization expenses) too increased by 12.75% due to increase in prices of consumables and services over the period.
The Bank continues to take relevant measures to curtail costs through cost reduction initiatives.
The Bank recorded an impairment charge of LKR 4,150 Mn during the 9 months ended 30 September 2024 against LKR 13,447 Mn reported in corresponding period of 2023 with a reduction of 69.14%, mainly due to enhanced credit quality and strong recovery initiatives.
The impairment charge on Loans and Advances amounts to LKR 4,189 Mn (2023 - LKR 11,912 Mn) and impairment reversal on other instruments LKR 39 Mn (2023 – 1,535 Mn) for the 9 months ended 30 September 2024.
The Bank has ensured the impairment provision is made to capture the changes in global & local economy, credit risk profile of customers and 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 4,015 Mn which is a 49.51% increase over the comparative period, which stood at LKR 2,685 Mn due to increase in profits.
Value Added Tax on Financial Services increased for the 9 months from LKR 2,544 Mn to LKR 3,365 Mn in 2024 which is a 32.28% over the corresponding period in 2023. Social Security Contribution Levy increased for the nine months from LKR 355 Mn to LKR 467 Mn in 2024 which is a 31.70% increase over the corresponding period in 2023.
Overall, Bank recorded a Profit before Income Tax (PBT) of LKR 10,608 Mn in 9 months ended 30 September 2024, against LKR 7,181 Mn reported in corresponding period in 2023 demonstrating a growth of 47.72%.
Similarly, Profit after Tax (PAT) was recorded as LKR 6,593 Mn in the 9 months ended 30 September 2024 with a growth of 46.65% over the corresponding period in 2023.
Statement of Financial Position
The Bank’s Total Assets were recorded at LKR 734 Bn as of 30 September 2024.
Loans and Advances net of Impairment were recorded at LKR 442 Bn.
Local currency Loans and Advances (Gross) increased by LKR 8 Bn, while foreign currency Loans and Advances (Gross) contracted by LKR 1 Bn partly due to local currency appreciation.
Customer Deposits were recorded at LKR 598 Bn as of 30 September 2024. Local currency deposits increased by LKR 15.47 Bn, while foreign currency deposits contracted by LKR 8.39 Bn again mainly due to the local currency appreciation.
Key financial ratios and indicators
Key financial ratios and indicators of Seylan Bank PLC remained healthy as of 30 September 2024.
The capital adequacy ratios were well above the regulatory minimum requirements and recorded 12.25% as Common Equity Tier 1 Capital Ratio & Total Tier 1 Capital Ratio and 17.05% as the Total Capital Ratio.
All Currency Liquidity Coverage Ratio and the Rupee Liquidity Coverage Ratio were maintained at 442.64% and 509.82% respectively, which is well above the regulatory minimum requirements.
Bank’s Net Stable Funding Ratio as at 30 September 2024 stood at 139.50%.
The Bank’s Asset Quality Ratio of Impaired Loan (Stage 3) Ratio as at 30 September 2024 stood at 3.05% (2023 – 3.85%).Impairment (Stage 3) to Stage 3 Loans Ratio, which is considered the Stage 3 Provision Cover Ratio was recorded at a healthy 72.85% (2023 – 68.29%), well above the industry average of 51% indicating prudent provisioning adopted by the Bank.
The Return on Equity (ROE) stood at 13.87% (2023 – 10.88%) and Return on Average Assets (profit before tax) stood at 1.96% (2023 – 1.45%) for the period under review, recording a significant improvement over last year.
The Bank’s Earnings per Share stood at LKR 10.37 for the 9 months ended 30 September 2024 compared to LKR 7.07 reported in corresponding period of the previous year.
The Bank’s Net Assets Value per Share stood at LKR 104.22 as at 30 September 2024 (Group LKR 107.36).
The Bank opened 29 “Seylan Pahasara Libraries” during the 9 months ended 30 September 2024 taking the total number to 254 libraries, clearly signifying the Bank’s commitment to foster education and support children across the island.