Seylan Bank recorded a profit after tax of Rs.3.68 bn for the year ended December 31, 2019, a media release from the Bank stated.
Net Interest Income (NII), the main source of income representing more than 75% of the total operating income of the Bank, recorded an increase of Rs. 0.886 bn. (4.99%) during the period. The Bank recorded a NII of Rs. 18.633 bn. in 2019, compared to Rs. 17.747 bn. in 2018. NII growth, despite the narrowing net interest margins, was supported by growth in loans and advances and volatile interest rates.Net Interest Margin (NIM) reduced to 4.20% from 4.53% in 2018. Net fee and commission income was Rs. 4.233 bn., reflecting an increase of 4.41% compared to the previous year.
The operating Income of Rs. 24.354 bn. was 5.01% higher than the previous year and reflects a growth in NII (Rs. 0.886 bn), Net Fee and Commission Income (Rs. 0.178 bn.) and other income (Rs. 0.098 bn). Other income comprises a net loss from trading amounted to Rs. 1.459 bn. over the previous year (reflects a net loss from Derivative Financial Instruments of Rs. 1.864 bn. due to fluctuations in rates and volume), net gains/(losses) from de-recognition of financial assets with a growth of Rs. 0.268 bn. and Other Operating Income with a growth of Rs. 1.289 bn. which is mainly from foreign exchange income derived from both revaluation gain/(loss) on the Bank’s net open position and realised exchange gain/(loss) on foreign currency transactions.
The impairment charge for 2019 was Rs. 3.883 bn., an 11.73% increase over the last year. The impairment charge of loans and advances for the year amounted to Rs. 3.848 bn. compared to, Rs. 3.516 bn. in 2018. Stage three assets have increased by Rs. 3 bn. over the previous year and the same impacted on the impairment charges for Stage three (increased by Rs. 0.9 bn. ) in 2019.
Expected credit loss allowance as at December 31, 2019 stood at Rs. 10.73 bn, an increase of Rs. 0.84 bn. from Rs. 9.89 bn. recorded in 2018. Total operating expenses was Rs. 12.606 bn.
The Bank’s cost to income ratio, including additional gratuity expense, VAT, NBT and DRL stood at 63.12%.