Seylan Bank made a steady start in 2018 posting a Profit after Tax of Rs. 1,053 Million in Q1 despite less than ideal market conditions.
Net interest income increased by 17.21% as volume growth outperformed the impact arising from narrowing of NIMs.
Net fee and commission income grew by 14.61% reaching Rs. 995 Million in 1Q 2018 as compared to Rs. 868 million for the comparative period. Initiatives to harness fee generating business across various customer and market segments such as card related and trade finance related fee incomes and fees from guarantees, remittances is progressing rapidly as reflected by increases shown in fee based income. Other operating income comprising gains from trading, financial investments, foreign exchange and other income were reported as a net gain of Rs. 366 Million compared to net gain of Rs. 238 million in 1Q 2017.
Impairment charges for loans and other losses for the period reached Rs. 542 Million as compared to a charge of Rs. 346 million in Q1 2017. Individual impairment charges of Rs.380 Million represent provisions specific credit exposures. Total Expenses increased by 10.46% from 2,705 million in the 1Q of the previous year to Rs. 2,988 million during the period under review. Expenses growth arose from investments made in employees, IT and infrastructure, branch upgrading and refurbishment etc. The bank continued focusing on widening the roll-out of lean initiatives, workflow methods and automation across the bank in its pursuit towards rationalising expenditure on key controllable cost lines and inculcating a culture of working smarter across all functions by employees.
Loans and advances portfolio of the Bank recorded a marginal growth of 3.01% to 289,302 Million during the 1Q 2018 amidst rising interest rates. Credit growth was driven primarily by Term loans and Overdrafts.
The overall deposit base recorded a marginal growth of 1.24% to 310,904 Million by 1Q 2018 and a shift from low cost CASA to term deposits was noted partly due to increase in interest rates. As a result, the Bank’s CASA ratio (Current and Savings) stood 31.25% and total time deposits increased from 68.80% by end 2017 to 68.75% as at 31st March 2018 of the total deposits base.
Due to the noteworthy financial performance during first quarter, Bank’s Earning per share (EPS) grew by 21.57% to Rs.2.88. The Bank recorded a Return on Average Assets (ROAA) of 1.52% and Return on Equity (ROE) of 12.25%. The Bank’s Net Asset Value per share as at 31st March 2018 was Rs.94.34 (Group Rs.98.63)
Seylan Bank remained soundly capitalised, with the key capital adequacy ratios well above regulatory minimum requirements and recorded 10.37% as the total Tier 1 capital ratio and 14.29% as the total capital ratio.
The Bank recognises education as a nation building block and prioritises it in CSR activities. Under the ‘Seylan Pahasara’ project the Bank opened 8 libraries during the first quarter totaling 161 libraries in rural areas, especially in under privileged schools to nurture and educate young minds enabling them to contribute to national development.