Seylan Bank PTP exceed Rs 3 bn

Seylan Bank recorded an impressive Q3 performance with Profits before VAT and Income Tax reaching Rs. 3,130 Million for the 9 months ended 30 September 2012 - a 120% growth over the corresponding period last year. Profit before VAT and Income Tax (before the exceptional VRS costs) for the 9 months ending September 2011 was Rs. 1,424 Million. Profits after tax for the 9 months increased to Rs. 1,604 Million from Rs. 303 Million recorded last year.

Despite controlled credit expansion, the Bank’s strong performance continued to be driven by growth in its Core Banking operations. Net Interest income increased by 12% to Rs. 6,418 Million for Q3 2012, resulting from selective growth in quality advances and effective management of margins. Despite challenging market conditions the bank was able to maintain its net interest margins at 4.95%, a slight improvement as compared to 4.91% in December 2011.

Non-interest income increased from Rs. 1,698 Million to Rs. 1,816 Million in the 9-months of 2012. This was achieved despite a general slowdown in import related activities, through diversifying into various other trade finance and cash management services.

During the 9-months under review the Bank maintained its focus on controlling its overhead costs. The efforts on improving cost efficiencies have resulted in the improvement of the cost to income ratio to 67%, a reduction of 6 percent from December 2011.

Chairman of Seylan Bank Mohan Pieris PC stated, “We are focused on achieving our Strategic Plan, which we formulated in the latter part of last year. This year’s record performance is a testament that we are well on our way to achieve our targets. We have also taken steps to improve our Capital and Governance structures for future growth that has been planned”.

The Bank grew its deposits base by Rs. 13.8 Billion 15% (annualised) and the Advances portfolio by Rs. 12.7 Billion 14% (annualised) despite a fiercely competitive and rising interest rate environment. According to General Manager/CEO Kapila Ariyaratne, “the bank has set its sights on reducing this to a single digit by end 2013 through adding quality assets, rehabilitating troubled loans and through effective recovery strategies”.