ECONOMYNEXT – Profits at Sri Lanka’s Seylan Bank Plc group grew 47.16 percent to 2.07 billion rupees in the December 2022 quarter, interim accounts showed.
The group reported earnings of 3.60 rupees for the quarter.
In the year 2022 the group reported earnings of 7.92 rupees on total profits of 4.5 billion rupees which fell 1.69 percent.
Interest income grew by a fast 134 percent to 28.8 billion during the quarter and interest expenses grew 184 percent to 16.2 billion rupees resulting a 91 percent increase in Net Interest income of 12.6 billion rupees.
Trading gains increased by 132 percent to 458 million rupees from the same quarter last year.
“The Bank increased the impairment provision to capture the impact on emerging global and local economic challenges and the credit risk profile of the customers and continuously assesses the credit quality of the Bank’s loan portfolio in order to ensure adequate provisions are recognized in the financial statements,” Seylan bank said in its interim report.
“The Bank maintains provisions made as management overlay, based on the assessment of significant increases in credit risk, and by stress-testing the exposures to risk elevated sectors, and facilities which have been continuously under moratorium to address the potential implications of the moratorium schemes introduced to support the recovery of the affected industries and individuals.
“Further the Bank has accounted for an additional Expected Credit Loss (ECL) on Foreign Currency Denominated Bonds in the financial statements considering the impact on Interim policy regarding the servicing of Sri Lanka’s external public debts issued by the Ministry of Finance of Government of Sri Lanka.”
Loans expanded to 444.2 billion rupees in December from 411.9 billion from a year ago.
Provisions for bad loans increased by 84.2 percent to 7.5 billion rupees.
Stage 3 accumulated impairments rose to 33.5 billion rupees from 19.2 billion rupees.
At bank level gross non-performing loans were at 4.98 percent in December from 3.64 percent a year ago.
“If excluded the impact from currency depreciation in 2022, the Loans and Advances would have reflected a marginal de-growth of 2 percent to 457 billion rupees,”
“The Bank curtailed its lending as appropriate especially to non-essential sectors and risk-elevated sectors while prioritizing lending to certain sectors such as exporters in order to support the prioritized sectors as an ongoing initiative.”
Total equity grew 4.16 percent to 56.2 billion rupees.
Tier 1 capital was 10.69 percent, down from 10.72 percent but above the required 7.0 percent. Total capital adequacy was 13.59 percent down from 14.11 percent, above the required 12.5 percent.
Gross assets grew 10.65 percent to 672.8 billion rupees. (Colombo/Feb 26/2023)