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| Wednesday, 1 September 2004 |
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SMB posts 53% post tax profit growth in first half of 2004 A healthier-looking income statement following a decision to write off selected long-term investments and provisioning for such investments during the previous financial year, has enabled the Seylan Merchant Bank (SMB) Group to achieve a 53 per cent growth in profit after tax and minority interest in the first half of 2004. In results released to the Colombo Stock Exchange this week, the Bank and its subsidiaries have reported a post tax profit of Rs. 24.2 million for the six months ended June 30, despite a 23 per cent drop in income over the corresponding period of last year. According to SMB Director/General Manager Rohan Senanayake, this drop in income of the Bank (down 30 per cent to Rs. 82 million) and the Group were due to substantial reductions in 'Other' income of 72 per cent for the Bank and 49 per cent for the Group. The other income segment was boosted last year by capital gains on bonds of Rs. 96 million. However, net interest income has shown healthy growth in the period under review, with the Bank reporting a 62 per cent growth to Rs. 59.5 million and the Group a 26 per cent increase to Rs. 71.3 million. Commenting on these results, Senanayake said: "We expect this trend to continue in the third and fourth quarters of the year. Profitability will increase in the absence of significant provisioning requirements, but income growth will continue to be slow due to lack of growth in other income." The writing off of a substantial portion of the Group's long-term portfolio of share market investments during the previous financial year had resulted in a reduction of Rs. 40 million in provisioning, which would be welcomed by shareholders, he said. A member of Ceylinco Consolidated, Seylan Merchant Bank Limited was incorporated in September 1992. SMB is registered by the Central Bank of Sri Lanka as a Registered Finance Leasing Establishment under the Finance Leasing Act No. 56 of 2000. The Bank's subsidiaries are SMB Real Estate Limited, Seylan Merchant Leasing Limited, and SMB Money Brokers (Pvt) Ltd. |
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