Lower loan loss provisions help lift Seylan Bank June profits

1 August 2024 12:18 am Views - 120

Seylan Bank PLC appears to have stayed mostly on the sidelines without joining the lending drive, which the Central Bank so deliberately wants to reactivate by cutting rates, as it did as early as last week.
The bank saw its loan book slipping slightly to Rs.496.1 billion by the end of June, from the Rs.497.2 billion it had coming into 2024.
The bank reported a net interest income of Rs.9.31 billion in the three months through June, up just 1.5 percent from the same period in 2023, as the bank was mostly waiting, looking at the direction of the interest rates and economy before reopening its lending spigots.
There were accusations that the banks were overly cautious towards lending and they delay passing down the easing financing conditions via lower borrowing costs.

Its net interest margin – the difference between what the bank charges from its borrowers and what it pays to its depositors – slightly slipped to 5.17 percent, from 5.76 percent at the start of the year.
In the three months from April through June, the bank reported earnings of Rs.3.48 a share or Rs.2.21 billion, compared to Rs.2.32 a share or Rs.1.48 billion in the same period in 2023.
This translated into nearly a 50 percent increase in profits.
The bank’s share ended 0.88 percent or 40 cents, down at Rs.45.00 yesterday.
The lower provisions were largely behind the profit surge, as the bank set aside only Rs.1.40 billion for possible loan losses in the quarter, compared to Rs.3.19 billion in the same period in 2023.
The net fee and commission incomes were up roughly 9.0 percent to Rs.1.90 billion.