Seylan Bank posts a remarkable PAT of LKR 10 Bn for 2024

Bank’s Financial Performance

Financial Highlights

• Profit before Income Tax (PBT) of LKR 16.04 Bn with a 59% growth
• Profit after Tax (PAT) of LKR 10.05 Bn with a 61% growth
• Total Assets of LKR 780 Bn, with a 9% growth
• All Currency LCR at 491.37 % and Rupee LCR at 415.75%
• Impaired Loans (Stage 3) Ratio of 2.10% and Stage 3 Provision Cover Ratio of 80.90%
• Total Capital Ratio at 18.59%

Income Statement

The Bank recorded a Profit before Income Tax (PBT) of LKR 16.04 Bn for the period under review with a 59% growth over the previous year, while recording a Profit after Tax (PAT) of LKR 10.05 Bn for the year with a 61% growth over the previous year, demonstrating a robust performance despite challenging macro-economic conditions. The reported PAT of LKR 10 Bn is the highest performance in the Bank’s 36 year history.

Net Interest Income of the Bank was reported as LKR 37 Bn in 2024 compared to LKR 40 Bn reported in 2023 with a decline of 8% corresponding to reduction in Net Interest Margins during 2024, due to reduction in market interest rates throughout the year.

Net fee and commission income of the Bank reported a growth of 7% to LKR 8 Bn compared to LKR 7.4 Bn reported in the previous year. The growth in 2024 was mainly due to increase in income from Cards, Remittances and other services relating to Lending.

The Bank’s net gains from trading reported a gain of LKR 0.46 Bn, a decrease of 44% over the gain of LKR 0.82 Bn reported in previous year due to exchange / interest rate changes.

Net gains / (losses) from de-recognition of financial assets reported a loss of LKR 0.26 Bn in 2024, compared to the gain of LKR 0.15 Bn reported in the previous year. The loss due to the restructuring of SLISBs amounted to LKR 2.71 Bn and was recorded in Q4 2024.

Other Operating Income of the Bank was reported as LKR 1 Bn in 2024, a growth of 5% over the previous year. This increase is mainly from foreign exchange income, which represents both revaluation gain/ (loss) on the Bank’s net open position and realized exchange gain/ (loss) on foreign currency transactions.

The Bank’s Total Operating Income decreased by 11.6% to LKR 44 Bn in 2024 compared to LKR 49 Bn in the previous year mainly due to decrease in net interest income and the loss on restructuring of SLISBs.

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. The impairment charge on Loans and Advances and other credit related commitments amounted to LKR 6.6 Bn (2023 - LKR 15.5 Bn). The impairment reversal due to the SLISBs exchange amounted to LKR 4.9 Bn (2023 – LKR 1.5 Bn charge).

The Bank’s Personnel Expenses increased by 11% to LKR 10 Bn in 2024 mainly due to increase in the staff benefits based on the collective agreement entered in 2024.

Other Operating expenses including depreciation and amortization expenses too increased by 12% to LKR 10.4 Bn during 2024 compared to LKR 9 Bn reported in 2023 mainly due to increase in prices of consumables and services over the period. The Bank continues to take relevant measures to curtail costs through various cost rationalization initiatives

All taxes reported an increase in 2024 compared to the taxes reported in 2023 mainly due to the increase in taxable income. The Bank’s Value Added Tax on Financial Services increased by 37% to LKR 4.72 Bn compared to LKR 3.45 Bn recorded in the previous year. Further, Social Security Contribution Levy (SSCL) increased by 37% to LKR 0.66 Bn compared to LKR 0.48 Bn recorded in the previous year. The Bank’s Income Tax Expense reported a growth of 57% to LKR 5.99 Bn in 2024 compared to LKR 3.82 Bn reported in 2023. The Bank’s effective tax rate was 53% in 2024.

Overall, the Bank reported a PAT of LKR 10 Bn, the highest ever profits in its 36 year history.

Statement of Financial Position

The Bank’s total assets reached to LKR 780 Bn as at 31 December 2024, a 9% growth during the year under review compared to LKR 718 Bn recorded in the previous year demonstrating sustainable growth of the Bank over the years.

The Bank focused on book growth and made efforts to enhance Loans and Advances in challenging economic and market condition that prevailed during the year. The Bank recorded net Loans and Advances at LKR 463 Bn as at 31 December 2024 with a growth of 6% compared to LKR 438 Bn recorded in 2023. The Bank’s gross Loans and Advances increased by LKR 28 Bn to LKR 525 Bn as at 31 December 2024 from LKR 497 Bn recorded as at 31 December 2023. Rupee Loans and Advances increased by LKR 20 Bn and LKR equivalent of Foreign Currency Loans and Advances increased by LKR 8 Bn during the year.

The Banks’s Asset Quality Ratio of Impaired Loan (Stage 3) Ratio stood at 2.10% (2023 – 3.85%). As a result of the Bank’s prudent Provisioning Policy, the bank has reported a Stage 3 Provision Cover ratio of 80.90% (2023 68.29%), well above the banking Industry Provision Cover ratio of 54% as at year end.  

The Bank focused on customer deposit growth and made necessary arrangements to canvass new to Bank Deposits while retaining the existing customer base. The Bank’s total Deposit Base grew by 9.33% (LKR 55 Bn) during the year 2024 to reach LKR 647 Bn compared to total Deposits of LKR 592 Bn reported in the previous year. The Bank’s LKR Deposits reported a growth of LKR 59 Bn and LKR equivalent of FCY Deposits reported a contraction of LKR 4 Bn during the year.

The Bank’s CASA base grew from LKR 177 Bn in 2023 to LKR 187 Bn in 2024, which is a 6% growth from the previous year. CASA ratio stood at 28.94% in 2024 compared to 30.01% of the previous year.

Key financial ratios and indicators of Seylan Bank PLC remained strong as of 31 December 2024.

The capital adequacy ratios were well above the regulatory minimum requirements and recorded 14.25% as Common Equity Tier 1 Capital Ratio & Total Tier 1 Capital Ratio and 18.59% as the Total Capital Ratio. The Capital Adequacy Ratios have improved compared to previous year mainly due to PAT of LKR 10 Bn and the raising of Debenture of LKR 10 Bn during 2024.

The Bank maintained the LCR above the statutory requirement and the All Currency LCR and the Rupee LCR were recorded as 491.37 % and 415.75% respectively.

The Return on Equity (ROE) stood at 15.35% for the year under review compared to 10.88% recorded in 2023. The Return on Average Assets (before tax) was recorded at 2.14% for the year under review compared to 1.45% recorded in 2023. The Bank’s Earnings per Share stood at LKR 15.81 as at end of 2024 compared to LKR 9.84 as at the end of the previous year. The Bank’s Net Assets Value per Share stood at LKR 110.89 as at the end of 2024 (Group LKR 114.22) compared to LKR 98.31 reported as at the previous year end (Group 101.36).

The Bank opened 40 “Seylan Pahasara Libraries” during 2024 taking the total number of libraries to 265, clearly signifying the Bank’s commitment to foster education and support learning of children across the island.

Aligned with the Bank’s Triple Bottom Line approach, our strategic initiatives have begun delivering tangible impacts across multiple dimensions of value creation, not only on financial capital but also on Human, Social, Natural, Manufactured, and Intellectual capital.

Fitch Ratings upgraded the National Long-Term Rating of Seylan Bank by two notches to 'A+(lka)' with a Stable Outlook on 21 January 2025.