Banking and Finance

Seylan Bank records an impressive Profit after Tax (PAT) of LKR 2.76 Bn in Q1 2025

Profit before Income Tax - LKR 4,199 Mn up by 13.36%
Profit after Tax – LKR 2,761 Mn up by 20.29%
Liquidity Coverage Ratio (LCR) - All Currency of 389.25% and Rupee of 349.51%
Return on Equity (ROE) of 15.81%

Total Capital Adequacy Ratio of 17.64%
Impaired Loans (Stage 3) Ratio at 1.98%

Seylan Bank recorded a Profit before Income Tax (PBT) of LKR 4,199 Mn in Q1 2025, against LKR 3,704 Mn in Q1 2024 demonstrating a growth of 13.36%.

For the 3 months ended 31st March 2025, Profit after Tax recorded by Seylan Bank was LKR 2,761 Mn with a growth of 20.29% against LKR 2,295 Mn recorded in the corresponding period of 2024.

Statement of Financial Performance

Net interest income decreased from LKR 9,371 Mn to LKR 8,587 Mn, a decrease of 8.37% over the previous year for the 3 months ended 31st March 2025 mainly due to the reduction in market interest rates and repricing of loans and deposits. The Bank’s Net Interest Margin (NIM) also recorded a reduction from 4.90% in 2024 to 4.45% in Q1 2025. The Bank’s net fee based income recorded a growth of 13.83% from LKR 1,837 Mn to LKR 2,091 Mn during Q1 2025, and the growth in 2025 is mainly attributable to fee income from Loans, Cards, Remittances, Trade and other financial services.

The Bank’s total operating income was recorded as LKR 11,258 Mn, a decrease of 3.83% compared to LKR 11,707 Mn recorded in the corresponding period of 2024, driven mainly by reduction in Net Interest Income.

Other income captions comprising of net gains from trading activities, net gains from de-recognition of financial Assets, and net other operating income, reflected an increase compared to the corresponding period of 2024.

Total Operating Expenses recorded an increase of 4.62% from LKR 5,126 Mn in 2024 to LKR 5,363 Mn in 2025 for the 3 months ended 31st March 2025. Personnel expenses increased by 3.22% from LKR 2,718 Mn to LKR 2,806 Mn mainly due to increase in staff related benefits.

Other Operating expenses and depreciation and amortization expenses too increased by 6.19% due to increase in prices of consumables and services over the period. The Bank will continue to take relevant measures to curtail costs through various cost initiatives.

The Bank recorded an impairment charge of LKR 262 Mn in Q1 2025 against LKR 1,555 Mn reported in Q1 2024 with a reduction of 83.17%. The Bank has ensured impairment provisions are made to capture the changes in the global and local 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 Bank’s Asset Quality Ratios of Impaired Loan (Stage 3) Ratio stood at 1.98% (2024 – 2.10%), while the Stage 3 Provision Cover Ratio stood at a healthy 80.74% as at 31/03/2025.

Income tax expenses stood at LKR 1,438 Mn which is a 2.08% increase over the comparative period, which stood at LKR 1,409 Mn. Value Added Tax on Financial Services increased for the first three months from LKR 1,160 Mn to LKR 1,260 Mn in 2025 which is a 8.58% increase over the corresponding period. Social Security Contribution Levy increased for the first three months from LKR 161 Mn to LKR 175 Mn in 2025 which is a 8.58% increase over the corresponding period.

Overall, Bank recorded a Profit after Tax (PAT) of LKR 2,761 Mn in Q1 2025 with a growth of 20.29% over the corresponding period in 2024.

Statement of Financial Position

The Bank’s total Assets increased from LKR 779 Bn to LKR 785 Bn during Q1 2025, demonstrating a steady growth over the previous quarter. The Bank also made arrangements to canvass new to Bank Loans and Deposits while retaining the existing customer base. Loans and Advances of the Bank were recorded at LKR 469 Bn and Deposits were recorded at LKR 647 Bn. The Bank’s CASA ratio was maintained at 29%.

Key financial ratios and indicators

Key financial ratios and indicators of Seylan Bank PLC remained sound as of 31st March 2025. The capital adequacy ratios were well above the regulatory minimum requirements and recorded 13.67% as Common Equity Tier 1 Capital Ratio & Total Tier 1 Capital Ratio and 17.64% as the Total Capital Ratio.

The Bank maintained the Liquidity Coverage Ratio (LCR) well above the statutory requirement. All Currency LCR Ratio and the Rupee LCR Ratio were maintained at 389.25% and 349.51% respectively.

The Banks’s Asset Quality Ratios of Impaired Loan (Stage 3) Ratio and the Impairment (Stage 3) Provision Cover Ratio stood at 1.98% (2024 – 2.10%) and 80.74% (2024 – 80.90%) respectively.

The Return on Equity (ROE) stood at 15.81% (2024 – 15.35%) and Return on Average Assets (profit before tax) stood at 2.18% (2024 – 2.14%) for the period under review, recording an improvement.

The Bank’s Earnings per Share stood at LKR 4.34 in Q1 2025 compared to LKR 3.61 reported in Q1 of the previous year. The Bank’s Net Assets Value per Share stood at LKR 111.94 as at 31st March 2025 (Group LKR 115.14).

The Bank opened 16 “Seylan Pahasara Libraries” during the Q1 2025 taking the total number to 281 libraries, clearly signifying the Bank’s commitment to foster education and support children across the island.

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