Seylan Bank PLC reported a significant profit increase for the quarter ending June, driven primarily by a reduction in loan loss provisions. The bank’s net profit soared by nearly 50%, reaching Rs. 2.21 billion, or Rs. 3.48 per share, up from Rs. 1.48 billion, or Rs. 2.32 per share, in the same period last year.
Despite the Central Bank’s recent push to reactivate lending by cutting rates, Seylan Bank maintained a cautious approach, resulting in a slight decrease in its loan book to Rs. 496.1 billion from Rs. 497.2 billion at the start of 2024. The bank’s net interest income grew by 1.5% to Rs. 9.31 billion, reflecting a conservative stance on new loans amid fluctuating interest rates and economic conditions.
The bank’s net interest margin fell to 5.17% from 5.76% at the beginning of the year. Lower loan loss provisions were a key factor in the profit boost, with the bank setting aside Rs. 1.40 billion for potential loan losses in the quarter, a substantial decrease from Rs. 3.19 billion in the same period last year. Net fee and commission income also rose by approximately 9.0% to Rs. 1.90 billion.
The bank’s share price ended down by 0.88%, or 40 cents, at Rs. 45.00 yesterday.