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Seylan Merchant Bank (SMB) has reported significantly better financial results in the first quarter of 2002 over the corresponding period of last year.

The first quarter results of the bank submitted to shareholders last week reveal that the bank's gross income grew 41 percent to Rs 96.7 million, while pre-tax profit grew 103 percent to Rs 570,000, from a loss of Rs 21 million in the first quarter of 2001.

A notable feature of this performance was the growth in net interest income from a shortfall of Rs 4.2 million in the first quarter of 2001 to a surplus of Rs 5.3 million in the first quarter of 2002. SMB attributes this to an overall interest cost reduction due to a drop in interest rates.

SMB's Director/General Manager, Rohan Senanayake said: "SMB was in a loss making position from 1997 onwards due to the decline in stock market activities. We made profits in the first quarter of 2000, but were hit hard in the fourth quarter with the substantial increase in interest rates." The trend continued into 2001, at the end of which the bank declared a loss of Rs 55.7 million.

In order to return to profitability, SMB launched its Fortune 2001 a campaign focused on stimulating the mobilisation of investments and disbursement of funds as well as to broaden the bank's investor base by catering to both small investors in Colombo and the provinces. "The bank had an excellent response from the public to this campaign. Our client base for leasing operations grew by an estimated 70 percent last year," Mr. Senanayake said. "The effects of the momentum generated by the campaign can be seen in the results for the first quarter of 2002."

In contrast to the bank, SMB's specialised leasing subsidiary, Seylan Merchant Leasing Limited (SMLL) recorded a creditable performance in 2001, its first full year of operation. This trend has continued in the first quarter of 2002, with SMLL reporting a profit of Rs 3 million for the period. "The prospects of SMLL look quite encouraging, especially if the interest rates remain constant for the rest of the year," Mr. Senanayake said.

SMB commenced operation in October 1992 as a public limited liability company. A member of Ceylinco Consolidated, Seylan Merchant offers a broad spectrum of merchant banking facilities. The banks products include 'Jet Lease' a vehicle leasing facility, business loans and personal banking facilities such as 'SMB Quick Cash', 'SMB Classic Personal Loans' and 'SMB Fly High' an easy payment scheme to purchase air tickets. Its other subsidiaries include SMB Money Brokers (Pvt) Ltd., SMBex (Pvt) Ltd., and SMB Real Estate Ltd. 

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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