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The net interest income increased from Rs.9,719 million to Rs.11,165 million, a 14.9 percent increase for the 12 months ended December 31, 2014. The fee and commission income increased 6.1 percent from Rs.2,127 million to Rs.2,257 million showing a consolidation of the solid growth achieved by Seylan Bank over the past few years.

The other operating income, comprising net gains from trading, gains on financial instruments, gains on foreign exchange and other income, increased significantly by 174.61 percent from Rs.1,023 million to Rs.2,809 million, mainly due to capital gains realised on government securities.

During the year under review the bank also focused considerably on cost containment. This impressive performance was supported by the containment of growth in expenses of 10.99 percent during 2014. This is reflected in the bank’s declining cost to income ratio of 62.59 percent in 2013 reducing to 57.37 percent in 2014.

The sluggish credit demand evident in the first half of the year was reversed in the latter half with growth momentum picking up in the third and fourth quarters of 2014 and the bank reported a net credit growth of 13.48 percent, with net advances growing from Rs.136,553 million in 2013 to Rs.154,963 million.
During 2014, the bank grew its deposit base from Rs.167,371 million to Rs.185,924 million. The growth was predominantly achieved through the mobilisation of current and saving deposits, which enabled the bank’s low-cost deposit base to be increased from 33 percent in December 2013 to 39 percent as at end-December 2014.

Despite the decline in gold prices and its impact on the pawning base, the bank was able to improve its asset quality with a significant reduction in its gross NPA (net of IIS) from 10.58 percent in December 2013 to a single digit of 7.69 percent as at end-December 2014. The bank has consistently been able to improve its asset quality since 2009 through focused, sustained and effective recovery efforts.

The bank also continued its CSR initiatives focusing on education and accelerated its 100 libraries project for under privilege schools. Thirty nine more school libraries were opened by the bank during 2014 taking the overall number of libraries opened under the project to 51.

The branch relocation and upgrading project too continued in full stream during 2014, with a view to enhance the customers’ service experience. During 2014, the bank upgraded 31 Convenient Banking Centres full branch status. The bank also opened six new branches, fully refurbished another 12 branches and relocated a further six branches to more customer-friendly locations. As at December 31, 2014, the bank network comprised of 157 branches, 177 ATMs and 94 Student Saving Centres.

The bank’s total capital adequacy ratio stands at 14.73 percent at the end of 2014, well above the regulatory requirements. In October 2014, Fitch affirmed the bank’s rating at A-lka with a stable outlook.

As a result of the impressive performance, earnings per share were at Rs.8/92 for 2014, while return (profit before tax) on assets and return on equity stood at to 2.05 percent and 13.45 percent respectively. The bank’s net asset value per share as at December 31, 2014 was Rs.69/60 (group Rs.73/04).