Seylan Bank records a strong Performance, despite a challenging environment

The Net Interest Income of the Bank was reported as LKR 40.1 Bn in 2023 compared to LKR 40.5 Bn reported in 2022, a slight 1% drawback due to volatility in interest rates during the year. The Bank’s Net Interest Margin on Average Total Assets stood at 5.76% in 2023 compared to 6.33% in 2022.

Net fee and commission income of the Bank has shown a notable growth of 16 % to LKR 7 Bn from LKR 6 Bn reported in previous year.   The growth in 2023 is mainly attributable to fee income from cards, loans and other financial services.

The Bank’s Total Operating Income decreased by 3% to LKR 49.5 Bn in 2023 compared to LKR 51 Bn in the previous year mainly due to decrease in foreign exchange income.

The Bank recorded an impairment charge of LKR 17Bn during 2023 against LKR 26 Bn reported in corresponding period of 2022 with a reduction of 36%. The Bank made impairment provision to capture the changes in the macro economy, credit risk profile of customers, and the credit quality of the Bank’s loan portfolio in order to ensure adequacy of provisions recognized in the financial statements. During the year 2023, the impairment charge on Loans and Advances amounts to LKR 15.3 Bn (2022 – LKR 21Bn) and impairment charge on Foreign Currency Denominated Bonds amounts to LKR 1.5 Bn (2022 – LKR 4.7Bn).

The Bank’s Personnel Expenses increased from LKR 8 Bn in 2022 to LKR 9.1 Bn in 2023, a 15% growth mainly due to increase in staff benefits and adjustments made as relief allowances to absorb high cost of living and taxes. 

Other Operating expenses and depreciation and amortization expenses too increased by 28% to LKR 9.3 Bn during 2023 compared to LKR 7.3 Bn reported in 2022 mainly due to increase in prices of consumables and services. The Bank will continue to take relevant measures to curtail costs through various cost initiatives.

The Bank’s total operating expenses increased by 21% to LKR 18.5 Bn during the period under review compared to LKR 15.2 Bn recorded in the previous year.

The Bank’s Value Added Tax on Financial Services increased by 31% amounting to LKR 3.45Bn compared to LKR 2.65 Bn recorded in the previous year due to increase in VAT liable income. Additionally,Social Security Contribution Levy (SSCL) was imposed with effect from 01 October 2022 at the rate of 2.5% on the value addition liable for Value Added Tax on Financial Services. The charge for the year increased from LKR 0.13 Bn in 2022 (only for 3 months) to LKR 0.48 Bn.

The Bank’s Income Tax Expense reported a growth of 99.5% to LKR 3.82 Bn in 2023 compared to LKR 1.92 Bn reported in 2022, mainly due to impact form rate change and increase in liable income. The Corporate Tax Rate was revised with effect from 01 July 2022 from 24% to 30 % and provisions recorded accordingly. 

The Bank recorded a Profit before Tax (PBT) of LKR 10.08 Bn for the period under review with a 52% growth over the previous year while recording a Profit after Tax (PAT) of LKR 6.26 Bn for the year with a 33% growth over the previous year, despite challenging market & economic conditions that prevailed during the period.\

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