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Seylan profits soar by 50% to Rs. 595 m
Wednesday, 9 November 2005 - 2:45 AM SL Time
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Seylan Bank has posted a significant improvement in profit after tax for the nine months ending 30th September 2005 compared with the same period for the previous year.
The Bank`s profit after tax witnessed a major growth of 49.81% for the nine month period ending 30th September 2005 to record a figure of Rs.595.20 million as opposed to the previous year`s figure of Rs.397.31 million. Seylan`s pre-tax profit was Rs.797.7 million for the nine months ended 30th September 2005 as against Rs.432.4 million in the same period of 2004 with a 84.4% growth. The group`s profits attributable to shareholders was Rs.634.82 million, up significantly by 37.85%. The thrust in profitability was largely attributed to a high growth in net profit after tax of 139.74% by the bank in the third quarter in 2005 compared with the third quarter of 2004, thereby achieving a figure of Rs.239.54 million for the quarter.
The growth in the profits of the Bank was largely attributed to a growth of 38.01% in Net Interest Income and moreover substantial recovery of bad debts amounting to Rs.296.7 million. The amount of bad debts recovered of Rs.296.7 million is an increase of Rs.211 million (246%) compared to the previous year`s figure of Rs.85.6 million. This was as a result of a sound credit policy being implemented by the Bank with continuous focus on the recovery drive.
An analysis of the Bank`s results also show a favourable improvement in the cost / income ratio witnessing a sharp decrease to 63.89% during the nine months ending 30th September 2005 from 67.96% observed during the same period in the previous year. Another milestone achieved by the bank when taken alone is that its Return on Average Assets (ROAA) has seen tremendous improvement increasing to 0.83% (annualized) in the nine months ended September 2005 when compared to the figure of 0.61% (annualized) in the first three quarters of year 2004. Consequently, the Bank`s Return on Equity also catapulted to a figure of 16.44% at the end of September 2005, as opposed to a much lower figure of 8.23% last year. Other indicators that substantially favoured the positive results were a 23.7% annualized growth in Deposits and a 21.06% annualized growth in advances achieved by the Bank. The group also achieved an asset growth of 23.88%, annualized, reflecting the growth in Advances and Deposits.
Under the guidance of the Chairman Dr Lalith Kotelawala, Seylan Bank has embarked on a new concept called mobile banking which provides even the farmers, businessmen, and the households in the remotest areas access to banking. The mobile units have their own computers, which are linked to the branch network of Seylan Bank. The mobile vehicles would call over at their respective locations on a regular basis and thereby fill a vacuum created due to the lack of banking facilities previously experienced by the rural community. This business segment is also expected to bring in sizeable returns through an improved and satisfied customer base emerging in the interior areas previously deprived of banking facilities. The fully automated fleet of mobile banking units is yet another innovative idea of Chairman Dr. Kotelawala who strongly believes that access to banking is a right of the people and should be available at the grass root level.
Such widespread banking facilities will encourage savings and provide means for the development of the rural economy.
Seylan Bank also embarked on an ambitious Grameen Deposit mobilization scheme which has afforded investors to choose to invest in this product which fetches a premium rate of return. This deposit also rewards investors handsomely through quarterly draws giving away prizes comprising of household appliances worth Rs.250,000/- and an annual draw giving away a house worth Rs.2.5 million.
In keeping with its Chairman`s vision of alleviating poverty the Bank has extended its assistance to those unemployed to embark on Small & Medium Enterprises by providing them with the necessary project development support. The success of this area of activity has also been very positive in achieving these objectives. The statistics available show that more than 10,000 employment opportunities have been created by the advances extended by the SME section of the Bank.
To be innovative, Seylan has also developed several new products that include the Visa Travel Card and the Prepaid Card. The Visa Travel Card enables those traveling abroad to have access to their valuable foreign exchange through the card instead of carrying travelers cheques, while the Prepaid Card is a means whereby one can ideally store sums of money and draw the desired amounts whenever needed, making it an alternative to carrying cash locally. The payment gateway is yet another enhancement that is afforded to customers wanting to shop on-line using their credit cards giving them access to merchants through the internet. The Bank is currently focusing on selective areas of credit growth. Through such a prudent approach it would be in a stronger position to achieve its goals such as profitability and also contribute to the economy in a way on a bank with a heart, can..
The Board of Directors of Seylan Bank comprise of the following: Dr.Lalith Kotelawala (Chairman / Managing Director), Mr.R.Renganathan (Jt. Deputy Chairman), Mrs.S.P.C.Kotelawala (Jt. Deputy Chairperson), Mr.Ajita Pasqual (Director / General Manager / Chief Executive), Mr.A.D.Jegasothy, Ms.M.Sabaratnam , Mr.S.K.M. Perera , Dr.P.R.Anthonis , Mr.S.C.O De Livera , Mr.J.E.P.A. De Silva , Mr.K.A.S.Jayatissa and Mr.P.T.Sirisena.
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