Seylan Bank profits up

Seylan Bank has posted a Rs 510.5 m profit in the six months of 2010 ending June 30, recording a 270 percent increase compared with the Rs 137.8 m in the corresponding period the previous year.

The bank’s pre-tax profit in the six months ending June 30, 2010 was Rs. 809.6 m, up by nearly 292 percent from the Rs 206.4 m in the corresponding period the previous year.

Among the major contributory features was the Bank’s ability to increase its deposit base to Rs. 106,983 m as at June 2010 and growing its advances book during the six months. The bank focused on recovering non-performing advances and achieved satisfactory results which helped the NPA ratio to come down.

Seylan Bank, Chairman Eastman Narangoda said that these positive financial results were yet again indicative of the faith and confidence the general public of Sri Lanka have in the Seylan Bank. “Ever since the Central Bank-appointed new Board of Directors, we have been on an upward growth. Among the key reasons for the bank’s rapid turnaround in both stability and profitability are our wide-reaching strategic plan and aggressive recovery drive. These embraced several areas and, in turn, successfully restored investor confidence”.

The bank has substantially improved its performance indicators. Return-on-average assets have increased to 1.18 percent from 0.65 percent during 2009. Return-on-equity also has improved to 9.41 percent from 6.78 percent in 2009.The interest margin has also seen an increase to 5.51 percent compared to 5.23 percent. Net non-performing advances ratio has dropped to 18.38 percent from 22.33 as at 31 December 2009.

“I’m happy to see the dividends being enjoyed by our thousands of shareholders today. My Board of Directors and I have always been confident that 2010 will be a record making year for the Seylan Bank. We’re both determined, and will, surpass all expectations in terms of overall performance and profitability”, Narangoda said.

Last year, Seylan Bank reported a Rs 543.301 m Profit after Tax for 2009 representing an increase of 250 percent over the previous financial year. During the same period, the Bank’s cost-to-income ratio showed a marked improvement decreasing from 75.79 percent to 67.82 percent, while the total capital adequacy ratio - under severe pressure during the end 2008 crisis - rose from 8.06 percent to 11.74 percent in 2009.

“With the current positive trend, I am confident that the bank will not only regain its previous position but also will see an excellent performance by the end of the year with the active participation of staff and under the able guidance of the the Board Members of varied disciplines”, the Chairman said.

Seylan Bank now meets or exceeds the liquidity targets stipulated by the CBSL. These positive indicators have parallely instilled an upsurge in confidence both among shareholders and depositors both locally and overseas. The share price which returned to pre-crisis levels following the appointment of the new Board of Directors headed by veteran banker Eastman Narangoda, has continued to gain strength as the management implements, at all levels, the wide ranging initiatives set out in the Bank’s aggressive strategic plan.

The non-voting and voting shares of Seylan Bank traded at Rs.16.00 and Rs 37.00 as at the end of 2009. They now trade at around Rs. 45.75 and Rs 81.75 respectively.