Thursday 16 May 2019

Sri Lanka Seylan Bank March 2019 net up 8.14-pct

ECONOMYNEXT - Profits at Sri Lanka's listed Seylan Bank rose 8.14 percent from a year earlier to 817.4 million rupees in the March 2019 quarter with lower provisioning for bad loans amidst slow credit growth, falling interest margins, expansion costs, and a new debt recovery levy.

Earnings were 2.16 rupees a share in the March quarter, interim financial statement filed with the Colombo Stock Exchange showed.

The stock was trading 2.50 rupees higher on Friday at 59.50 rupees.

Net interest income grew 4.73 percent from a year earlier to 4.5 billion rupees, as interest income rose 18.8 percent to 13.6 billion rupees, and interest expenses grew a faster 27.2 percent to 9.1 billion rupees.

Interest margins narrowed to 4.19 percent, down from 4.24 percent three months earlier.

Net fee and commission income fell 2.9 percent to 965.4 million rupees.

Fair value losses from financial instruments amounted to 622 million rupees, down from a gain of 105 million rupees a year earlier.

Bad loans provisioning fell 40 percent to 589.2 million rupees, "which reflects the improvement in portfolio quality," the bank told shareholders in a statement accompanying the financial results.

Personnel expenses rose 4.38 percent to 1.57 billion rupees and other expenses grew 7.61 percent to 1.37 billion rupees on investments in IT infrastructure, upgrading, and refurbishing branches and staff benefits, the bank said.

The bank had opened two branches in Padukka and Godakawela which add up to 172 banking centres and 210 ATMs as at end March 2019.

A debt repayment levy of 250 million rupees was charged in the quarter which was introduced in the December 2018 quarter.

Seylan Bank's loan book expanded 3.26 percent from end December 2018 to 337.5 billion rupees at end March 2019.

Loans growth was marginal due to rising interest rates, the bank said.

"The growth in credit was driven primarily by term loans, refinance loans and revolving import loans," the bank told shareholders.

Deposits grew 2.65 percent to 367 billion rupees.

Total assets edged up 1.84 percent to 478.3 billion rupees and shareholder funds grew 3.38 percent to 37.4 billion rupees.

Regulatory capital adequacy was at 12.68 percent at end March 2019, down from 13.40 percent from three months earlier, but was above the minimum requirement of 12.50 percent.

Non-performing loans ratio was up to 4.67 percent, from 4.40 percent from three months earlier.

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