Seylan surpasses Rs. 1 b PAT despite VRS cost of Rs. 700 m

Seylan Bank Plc reported its best ever Q4 results, reflecting a growth of 82% over last year to report a post-tax-profit of Rs. 699.73 million (2010 - Rs. 383.91 million) for the quarter. Seylan Bank Chairman, Eastman Narangoda stated, “Profit-after-tax for the entire year surpassed Rs. 1 billion. This was even after the extraordinary cost of Rs. 698.7 million incurred for a Voluntary Retirement Scheme. The 2011 reported post-tax-profit of Rs. 1,003 million is below last year’s profit figure of Rs. 1,229 million. However, if the VRS cost (Rs. 698.7 million) is factored out, 2011 results would have significantly exceeded last year’s performance”.

During the year, significant growth was evident in the performing Loan book, which grew by 27.6% to reach Rs. 97.5 billion. Deposits too recorded a growth of 9.5% to reach Rs. 121 billion as at end of the year. Total assets stood at Rs. 166 billion, recording a growth of 11% over 2010. A notable feature was the robust growth in the Bank’s core business activities in the second half of the year with the momentum increasing significantly in the last quarter.

In 2011, Seylan Bank successfully raised Rs. 4.7 billion through a fully subscribed Rights Issue. The Bank’s equity ended the year at Rs. 17.5 billion, significantly higher than Rs. 12.1 billion recorded last year. This enabled the Bank’s Capital Adequacy Ratio (Tier II) to reach 14.53% (2010 - 12.07%) for 2011, one of the highest in the industry.

During Q3, Fitch Rating upgraded the Bank’s rating to “A-”, which was yet another milestone reached in 2011.

In terms of network, Seylan Bank further expanded its reach in 2011 by opening four new branches and seven convenient centres. It also relocated 10 branches / convenient centres to service customers better.

As at end 2011, Seylan Bank boasted of 133 branches and convenient centres spread across the country. In addition, 08 new ATMs were added to the ATM network, increasing the total to 134.

General Manager/Chief Executive Officer of Seylan Bank Kapila Ariyaratne stated, “The results prove beyond doubt that the re-structuring of the organisation structure, improvement of operational and risk management processes and the significant improvement in HR practices and processes are beginning to yield the desired results.

Emphasis on recoveries/restructuring of non performing debt, branch credit and customer service quality has combined to provide a platform for sustainable growth in core activities.”