SRI LANKA - SEYLAN BANK BOUNCES BACK REPORTS RS 549 M.N. PROFIT IN 2009

Seylan Bank recorded a Rs 543.30 million profit after tax for 2009 representing an increase of 250 percent over the previous financial year.

The Bank’s profit before tax increased from Rs 155.24 million in 2008 to Rs 892.57 million in 2009 thus recording an unprecedented increase of 475 percent.

This is as a result of operating expenses and provisions for loan losses decreasing by 21.05 percent (Rs 1.729 billion) and 11.51 percent (Rs 284 million) respectively as against a drop in net operating income of 11.77 percent (Rs 1.275 billion) a media release said.

• Seylan gets stable rating
• Fitch Ratings has affirmed Seylan Bank PLC’s (Seylan) National Long-term rating at ‘BBB+(lka)’.
• The outlook is stable. At the same time, the agency affirmed the ‘BBB(lka)’ rating on Seylan’s outstanding subordinated debentures.
• The ratings continue to reflect State support, given the bank’s size and systemic importance.
• The state owns 28 percent of Seylan’s voting equity at present, consequent to an equity infusion of over Rs 1.1 bn in October 2009 (37 percent of a total new-share issue of Rs 3 bn).

Seylan Bank Chairman Eastman Narangoda said this was by far the year’s most significant achievement with the restoration of stability and liquidity of the Bank.

Taking advantage of the buoyant stock market we made a public issue of 54,290,000 ordinary shares at Rs 35 per share in September last year. The desirability of the issue was bolstered by the aggregate 25 percent stake taken in Seylan Bank by the two state institutions Bank of Ceylon and the Sri Lanka Insurance Corporation.

The success of the issue clearly demonstrated the recovery of investor confidence in the Bank, being fully subscribed before the closing date.

During the same period, the Bank’s cost-to-income ratio showed a marked improvement decreasing from 75.79 percent to 67.82 percent, while the total capital adequacy ratio under severe pressure during the end 2008 crisis rose from 8.06 percent to 11.74 percent.

Seylan Bank now meets the liquidity targets stipulated by the CBSL. These positive indicators have brought a corresponding rise in confidence both in the shareholder and depositors.

Market capitalization of Seylan Bank grew 288 percent in the course of the year from Rs 1.2 billion at the end of 2008 to a notable Rs 4.8 billion at the end of 2009.

The Bank now enjoys adequate capital to support the current business volumes as well as its growth plans in the months that lie ahead.

source - wwwdailynews.lk