Seylan Bank PLC recorded a Profit After Tax (PAT) of Rs. 1.1 bn in Q1 2022.
The Bank maintained the Statutory Liquid Asset Ratio (SLAR) for the Domestic Banking Unit and the Foreign Banking Unit at 23.32% and 22.65%. This, along with a strong Net Interest Income (NII) of Rs. 6.8 bn, recording a growth of 22.51%, ensured that Seylan Bank perseveres through macroeconomic challenges.
Seylan Bank recorded a total operating income growth of 21.80% amounting Rs. 9.1 bn compared to Rs. 7.5 bn in the correspondent year. The Bank’s net gain from trading recorded Rs. 3.6 bn in 1Q 2022 mainly due to an increase in Net Gain on Derivatives Financial Instruments.
Net Fee and Commission Income recorded a notable growth of 24.20% to Rs. 1.437 bn from Rs. 1.157 bn mainly due to increase in Card Related Income, Trade Finance Related Fees, and Other Financial Services Related Income such as commission income and E-banking. The Loans and Advances portfolio of the Bank recorded a growth of 4.56% to Rs. 462.1 bn during 1Q 2022 which also reflects the inflation of the book by currency depreciation.
The growth in credit was driven primarily by Term loans, Overdrafts and Packing Credits. Seylan Bank’s overall deposit base recorded a growth of 5.52% to Rs. 515.6 bn in the period under review with the Bank’s CASA ratio (Current and Savings) at 34.24%.
Director and Chief Executive Officer, Seylan Bank, Kapila Ariyaratne said, “Sri Lanka underwent massive upheavals in the quarter under review. As the country seeks to stabilise its position amid an unprecedented crisis, Seylan Bank has done well to maintain its momentum despite the challenges it faced, achieving Rs. 643.1 bn of total assets as of March 31, 2022, resulting in 5.85% growth compared to December 31, 2021.
“We have managed to keep expense growth at a minimal level by focusing on lean initiatives and automation across the Bank and rationalising expenditure on key controllable cost lines. Team Seylan is to be lauded on leading by example during times of crisis and adapting a culture of working smarter across all the functions, leading to increased efficiency,” he said.
The Return on Equity (ROE) stood at 8.18% for the period under review, compared to 9.07% recorded in 2021. The Return on Average Assets (ROAA) recorded 0.94% in 1Q 2022.
Earnings per Share (EPS) in 2021 stood at Rs. 1.82, a slight increase compared to the Rs. 1.74 recorded in the comparative year, while Net Assets Value per Share recorded at Rs. 88.31 (Group Rs. 91.46).
Seylan Bank remained adequately capitalised in Q1 2022, with the key capital adequacy ratios above the regulatory minimum requirements. The Bank’s Common Equity Tier 1 (CET 1) Capital/ Total Tier 1 Capital Ratio was recorded as 9.78% and the Total Capital Ratio as at end March 2022 was 12.78%.
The Bank recorded impairment provision of Rs. 3.4 bn for 1Q 2022 compared to Rs. 2.2 bn for the correspondent year as a result of the increase in additional provision accounted for foreign currency denominated instruments due to the current situation. Income tax expenses stood at Rs. 413.2 mn which is a 5.36% increase from the comparative period which stood at Rs. 392.2 mn.