Seylan Bank recorded a profit after tax of Rs.3.68 Bn for the year ended December 31, 2019. Successful and oversubscribed Rights Issue made during the last quarter for Rs 4.30 bn which followed a similarly successful debenture issue earlier in the year endorsed and demonstrated the confidence placed in the Bank by the investors and shareholders.
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 under review. Accordingly, 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. Income on guarantees, cards, trade and remittances were the main contributors for the increase. The Bank strengthened its banking activities in trade finance special guarantees and other financial services causing the fee and commission income to increase compared to last year. The Bank promotes the cross selling of its products across the spectrum by the branches, to increase the fee base income.
The operating Income of Rs 24.354 bn. was 5.01% higher than the previous year and reflects a growth in NII (LKR 0.886 bn), Net Fee and Commission Income (Rs 0.178 bn.) and other income (Rs 0.098 bn).
The impairment charge for the year 2019 was Rs 3.883 bn. which is 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 3 assets has increased by R 3 bn. over the previous year and the same impacted on the impairment charges for Stage 3 (increased by Rs 0.9 bn. approximately) in 2019.
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