Seylan Bank 2022 Net Interest Income soars to 72% with robust revenues reconfirming stable growth

(LANKAPUVATH | COLOMBO) – Seylan Bank reported a robust Profit before Tax (PBT) of LKR 6.6 Bn, a 10% growth for the year ended 31st December 2022 while recording a Profit after Tax (PAT) of LKR 4.7 Bn delivering a stable performance. The results were further buoyed by an impressive 72% rise in Net Interest Income (NII) for the year under review, compared to 21% in the previous year,

Mindful of the current uncertainties, the Bank reinforces its resilience and stability with continued profitability trend in 2022, while supporting the nation’s economic resurgence.

Seylan Bank’s NII was fueled by surges in both Interest Income and Interest Expenses reflecting a growth of 84% and 96% respectively in 2022, compared to a de-growth of 8% and 27% the previous year. The rise in the NII was mainly driven by increase in market rates, and faster repricing of loan book than the deposit base. The Net Interest Margin stood at 6.33% in 2022 compared to 4.05% recorded in 2021.

In a year which was challenged by many commuting issues, the Bank continued to leverage innovation and technology to play a pioneering role in digital payment and adoption of bespoke solutions. FY 2022 witnessed a growth of over 70% in the eCommerce market space, fueled by the Seylan Merchant Portal achieving a significant growth in turnover. Digital engagement has also increased with e-statement penetration on Current Accounts rising to 44% and credit cards to 79% during 2022 and this initiative further supported the Bank’s positive continuation towards minimizing its carbon foot print. Furthermore, Seylan Bank uplifted the Mobile Banking App to provide great convenience with access via biometrics and face detection technology. Seylan Bank has also set up 96 Cheque Deposit Machines across the island enabling access to many current account holders with 24×7 access.

The Bank’s total assets recorded a growth of 11% reaching LKR 673 Bn compared to LKR 608 Bn recorded in the previous year. The growth in assets was attributed to prudent increased investments in Government Securities, balances with Central Bank and foreign banks etc. and partly due to currency depreciation.

The Bank’s overall Deposit Base increased by 12% to LKR 547Bn, sustained by strong customer activity. The current customer base of 2.5 million is testament to the Bank’s focus on customer satisfaction, loyalty and digital innovation. In the year under review, the bank continued to see strong customer activity despite economic uncertainty.

The Bank’s Total Operating Income grew 62% to LKR 51 Bn in 2022 when compared to LKR 31 Bn in 2021, driven mainly by growth in Net Interest Income, Net Fee Income and Foreign Exchange Income. Net Other Operating Income of the Bank amounting to LKR 4.5 Bn for 2022 reported an increase over the previous year by 55%. This growth is mainly from net foreign exchange gains.

A notable growth of 39%, LKR 6 Bn was posted in Net Fee and Commission Income, showing significant growth compared to last year, mainly attributable to fee income from cards, trade and remittances and other financial services.

The Bank’s Net Gains/Losses from Trading reported a loss of LKR 0. 447 Bn. The mark-to-market loss of trading derivative financial instruments have risen during the year under review compared to the previous year due to interest rate volatility and currency depreciation.

The management’s proactive leadership in all-round year cost savings and trimming progressed further in the final quarter strengthening bottomline profits. As a result, the Bank’s Cost to Income ratio excluding tax recorded a significant drop and stood at 29.81% at the end of 2022 compared to 41.53% in the previous financial year mainly due to increase in revenue.

Seylan Bank remained soundly capitalized, with key capital adequacy ratios above the regulatory minimum requirements, recording 10.69% as Common Equity Tier 1 Capital Ratio and 13.59% as the Total Capital Ratio.

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