Sri Lanka’s Seylan Bank December quarter profits slashed on write-downs
ECONOMYNEXT – Profits at Sri Lanka’s Seylan Bank Plc in the December 2018 quarter was wiped out by a one-off provision for retirement benefits and loans loss provisions under tighter accounting rules, and economic conditions, interim accounts showed.
The firm said profits fell 96 percent to 50.3 million rupees in the quarter from 1.45 billion rupees a year earlier.
The group reported earnings of 13 cents per share for the quarter. For the year to December, the firm reported earnings of 8.57 rupees per share.
Seylan provided 1.134 billion rupees of additional gratuity during the quarter.
Loan loss provisions rose steeply to 1.5 billion rupees from 64 million rupees a year earlier amid weak economic conditions and tighter accounting rules.
"Construction, tourism, and manufacturing sectors were the major contributors to this deterioration and the bank has implemented a rigorous program of restructuring, rehabilitation, and recovery to address this issue," the firm told shareholders in a review.
In the quarter, group interest income grew 18.1 percent to 13.6 billion rupees and interest expenses grew at a faster 20.2 percent to 8.86 billion rupees and net interest income grew 14.3 percent to 4.47 billion rupees.
Fee income grew 6.8 percent to 1.1 billion rupees.
During the year the bank said loans grew by 46 billion rupees to 327 billion rupees.
Deposits grew 50 billion rupees to 307 billion rupees, with 71.2 percent coming from fixed deposits, which pay higher interest up from 68.8 percent from a year earlier.
The bank’s Tier capital was at 10.20 percent and with Tier II, 13.3 percent which was above minimum regulatory requirements, though gross non-performing loan ratio climbed to 5.98 percent from 4.42 percent.
Group net assets grew 1.1 percent to 36.2 billion rupees and gross assets grew 15 percent to 432 billion rupees during the year. (Colombo/Feb21/2019-SB)