Seylan Bank : Interim Financial Statements as of 30.06.2022

Seylan Bank PLC

Interim Financial Statements

For the 06 Months Ended 30th June 2022

Seylan Bank records a Rs. 1.5 Bn Profit after Tax (PAT) for the first half of 2022

Seylan Bank recorded Profit after Tax of Rs. 1,504 Million for the 6 months ended 30th June 2022 against Rs. 2,105 Million reported in the corresponding period of 2021.

Statement of Financial Performance

Net Interest income increased from Rs. 10,971 Million to Rs 16,851 Million, a growth of 53.60% over the previous year for the 6 months ended 30th June 2022. The Bank's net fee based income increased by 27.36% from Rs. 2,180 Million to Rs. 2,776 Million during 1H, mainly due to increase in Debit & Credit Card Related Income, Commission income on E-Banking, Service charges on Deposits & Commission on Remittances which partly offset by decrease in Guarantees Related Income and Loans & Advances Related income.

Other income captions comprising of net gains from trading activities, net gains from de- recognition of financial Assets, net gains on foreign exchange transactions and other operating income increased by 37.20 % a net gain from Rs. 1,526 Million from correspondent year to a net gain of Rs. 2,093 Million during 1H 2022. The net increase is mainly due to increase in Mark to Market Net Gain on Derivatives Financial Instruments and Impact from Net Revaluation Losses on FCY Assets & Liabilities.

Total Expenses recorded an increase of 7.43 % from 6,750 Million in the 1H of the previous year to Rs. 7,251 Million for the 6 months ended 30th June 2022. Personnel expenses increased by 287 Million mainly due to increase in the staff benefits based on the collective agreement. Other Operating expenses and depreciation and amortisation expenses too increased by 7.35% due to increase in prices of purchases and services as a result of higher inflation and local currency depreciation. However, Bank will continue to take relevant measures to curtail costs with various cost initiatives.

The Bank recognised a total impairment charge of Rs. 11 Billion for Q2 2022 compared to Rs. 4 Billion reported in the corresponding period of last year, representing a 183.49% increase. The Bank increased the impairment provision to capture the impact on emerging global and local economic challenges and the credit risk profile of the customers.

Statement of Financial Positions

The Bank reported a marginal growth of 5.83% in net Loans and advances to Rs. 467,758 Million during the period under review. Its overall deposit base increased from Rs. 488,653 Million in December 2021 to Rs. 531,741 Million in 1H 2022. The Bank's CASA ratio (Current and Savings) stood at 31.92 %. Further the Bank's asset base expanded by Rs. 58,902 Million to Rs. 666,478 Million.

Key financial ratios and Indicators

Overall, with the reported performance during the six months, Bank's Earnings Per Share (EPS) stood at Rs. 2.60. The Bank recorded a Return (profit before tax) on Assets (ROAA) of 0.64 % and Return on Equity (ROE) of 5.83 %. The Bank's Net Asset Value per share as at 30th June 2022 was Rs. 89.26 (Group Rs. 92.46).

Seylan Bank remained soundly capitalized, with the key capital adequacy ratios well above the regulatory minimum requirements and recorded 10.18 % as total Tier 1 capital ratio and 13.54 % as the total capital ratio.

The Bank's Liquidity Ratios are well within the statutory limits. The Statutory Liquid Assets Ratio (SLAR) of Domestic Banking Unit and Foreign Currency Banking Unit were reported as 25.97% and 21.28% respectively and the Bank's Liquidity Coverage Ratio of All Currencies and Rupees were reported as 106.70% and 152.42% respectively.

The Banks's Asset Quality Ratios of Impaired Loan (Stage 3) Ratio and the Impairment (Stage 3) to Stage 3 Loans Ratio stood at 4.36% and 47.65% respectively.

Seylan Bank PLC

Income Statement

(In terms of Rule 7.4 of the Colombo Stock Exchange)

		Bank
	For the Six Months Ended
		30th June
	2022	2021	Growth
	(Audited)	(Audited)	%
Interest Income	32,543,123	22,816,224	42.63
Less : Interest Expenses	15,692,002	11,845,508	32.47
Net Interest Income	16,851,121	10,970,716	53.60
Fee and Commission Income	2,881,201	2,251,452	27.97
Less : Fee and Commission Expenses	105,285	71,850	46.53
Net Fee and Commission Income	2,775,916	2,179,602	27.36
Net Gains/(Losses) from Trading	4,137,231	(451,678)	1,015.97
Net Gains from Derecognition of Financial Assets	2,387	443,997	(99.46)
Net Other Operating Income	(2,046,423)	1,533,279	(233.47)
Total Operating Income	21,720,232	14,675,916	48.00
Less : Impairment Charges	11,363,734	4,008,577	183.49
Net Operating Income	10,356,498	10,667,339	(2.91)
Less : Operating Expenses	4,120,328	3,832,944	7.50
Personnel Expenses
Depreciation and Amortization Expenses	684,982	726,698	(5.74)
Other Expenses	2,446,123	2,189,969	11.70
Total Operating Expenses	7,251,433	6,749,611	7.43
Operating Profit before Taxes	3,105,065	3,917,728	(20.74)
Less : Value Added Tax on Financial Services	1,073,692	1,004,958	6.84
Profit before Income Tax	2,031,373	2,912,770	(30.26)
Less : Income Tax Expense	527,796	807,513	(34.64)
Profit for the Period	1,503,577	2,105,257	(28.58)
Basic/Diluted Earnings per Ordinary Share (Rs.)	2.60	3.64	(28.58)

(Amounts in Rupees Thousands) Bank

For the Quarter Ended

30th June

2022	2021	Growth
		%
19,232,929	11,137,984	72.68
9,161,270	5,701,283	60.69
10,071,659	5,436,701	85.25
1,397,225	1,043,090	33.95
58,753	20,814	182.28
1,338,472	1,022,276	30.93
508,535	159,756	218.32
-	258,777	(100.00)
715,124	338,560	111.23
12,633,790	7,216,070	75.08
7,980,087	1,837,461	334.30
4,653,703	5,378,609	(13.48)
2,052,586	1,893,990	8.37
338,925	362,396	(6.48)
1,260,665	1,104,783	14.11
3,652,176	3,361,169	8.66
1,001,527	2,017,440	(50.36)
1,001,527	2,017,440	(12.99)
437,394	502,683
564,133	1,514,757	(62.76)
564,133	1,514,757	(72.42)
114,548	415,288
449,585	1,099,469	(59.11)
0.78	1.90	(59.11)

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Seylan Bank PLC

Statement of Profit or Loss and Other Comprehensive Income

(In terms of Rule 7.4 of the Colombo Stock Exchange)

		Bank
	For the Six Months Ended
		30th June
	2022	2021	Growth
	(Audited)	(Audited)	%
Profit for the Period	1,503,577	2,105,257	(28.58)
Other Comprehensive Income/ (Loss), Net of Tax
Items that are or may be Reclassified to Income
Statement in Subsequent Periods
Net Movement of Cash Flow Hedge Reserve	84,246	15,082	458.59
Net Gains/(Losses) on Investments in Debt	(1,941,228)	(1,109,289)	(75.00)
Instruments measured at Fair Value through Other
Comprehensive Income

(Amounts in Rupees Thousands) Bank

For the Quarter Ended

30th June

2022	2021	Growth
		%
449,585	1,099,469	(59.11)

(1,282)	20,643	(106.21)
(99,784)	(401,701)	75.16

Less : Deferred Tax effect relating to items that are or may be Reclassified to Income Statement

Items that will never be Reclassified to Income Statement in Subsequent Periods

Change in Fair Value on Investments in Equity Instruments measured at Fair Value through Other Comprehensive Income

(465,894) (374,885) (24.28)

(989,661)

(378,829)

(161.24)

(24,053)

(96,406)

75.05

(222,424)

55,461

(501.05)

Less : Deferred Tax effect relating to items that will	-	-	-
never be Reclassified to Income Statement
Other Comprehensive Income/ (Loss) for the Period,
Net of Taxes	(2,380,749)	(1,098,151)	(116.80)
Total Comprehensive Income for the Period	(877,172)	1,007,106	(187.10)

-	-	-
(299,437)	(229,191)	(30.65)
150,148	870,278	(82.75)

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