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Seylan Bank's debenture issue of Rs. 600 million which opened on July 15 was oversubscribed within 11 working days.The bank attributed the success to positive investor sentiments following its robust financial performance achieved uring the first half of the current year. The bank achieved a profit after tax of Rs. 301.09 million, up 219.22 % over the previous year's figure of Rs. 94.32 million for the same period.

A bank spokesman said although the first tranche of the issue for Rs. 300 million took eight working days, the next tranche of Rs. 300 million took only three working days.

The debenture offered investors three investment options, namely interest annually paid at 15%, interest monthly paid at 14% and a floating rate.

The floating rate option offered investors one and half percentage points over the average of the one-year weighted average net yields (after tax) on Treasury Bills for June. "Unlike previous debenture issues in the recent past, this debenture was not a listed issue of debentures.

The issue was a success mainly because there was an equal amount of interest from institutional and as well as individual investors," the spokesman said.The remarkable increase in Seylan Bank's profit was mainly due to the management's focus on recovery of overdues and maintaining a reasonable margin through the utilisation of low cost funds.

This resulted in a steady growth in net interest income which amounted to Rs. 1.47 billion, an increase of 39% over last year.

When analysing the core business, financial statements reflect a turnover of Rs. 4.2 billion, a growth of Rs. 289 million compared to year 2001 despite the slow progress in the country's economy and competition in the industry.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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