Seylan Bank savors net profit of Rs. 1.2 Bn, 126% up over 2009
March 28, 2011 04:19 pm
Seylan Bank recorded a net profit of Rs. 1.2 Bn. for
2010 which is a 126% increase compared to Rs. 543 Mn. for the previous
financial year. Pre-tax profit, at Rs. 1.9 Bn., was up by a staggering 124%
from 2009, the highest ever profit figure earned by the bank since its
inception.
The financial results for the year ending 31 December 2010 is a testament to
the continued progress of Seylan Bank in returning to sustained, profitable
growth.
Seylan Bank also created a new paradigm in financial reporting in Sri Lanka with
its Annual Report for 2010. Titled ‘The Business Case’, this handsome
publication is dedicated to all the Bank’s stakeholders and discusses how
Seylan Bank has renewed stakeholder confidence and made remarkable progress
throughout year 2010.
Among the major factors fuelling the progress of Seylan, was the Bank’s success
in growing its deposit base to Rs. 109.9 Bn. as well as other strategic
measures to improve the efficiency of the bank. At the same time, renewed focus
on recovering non-performing loans and advances brought a welcome reduction in
the NPL ratio, which dropped by approximately 8% as against the previous year.
These measures managed to improve the following key indicators :
- Return on Average Assets increased to 0.87%
in 2010 from 0.38% in 2009.
- Return on Equity similarly improved to
10.88% from 6.20% the previous year.
- Interest rate spread increased to 6.00%
compared to 5.18% a year earlier.
The Bank’s cost-to-income ratio increased slightly from 67.82% to 68.69%, while
the Capital Adequacy Ratio has remained above 12% in both 2009 and 2010 which
is well above the required rate as stipulated by the Central Bank.
The positive results posted each quarter throughout 2010 brought a
corresponding upswing in investor confidence, both locally and overseas. The
Bank’s share price which was stabilized after the appointment of a new Board
headed by veteran banker Mr. Eastman Narangoda in early 2009, continued gaining
strength over the past year as the management implemented the wide-ranging
initiatives set out in the Bank’s aggressive strategic plan. The share price
increased from Rs. 37 to Rs. 97.80 during the course of the year.
Says Chairman of the Seylan Bank Eastman Narangoda, “The Board is extremely
pleased to report that Seylan Bank achieved an after-tax profit of Rs. 1.2 Bn.
for the year. This is an increase of 126% compared to the financial year 2009
despite having made the highest provisions for non-performing loans among Sri
Lanka’s major banks (as per the results for the first 9 months). We share the
pride of all our stakeholders in this year’s gratifying results”.
‘The Business Case’, which was launched at a colourful ceremony on 23 March at
the Cinnamon Grand Hotel, essentially takes the reader through seven principal
sections.
Preface – ‘A Vote of Confidence’ – Having restored financial stability, Seylan
Bank continues to build a business case that is earning sustained support from
stakeholders.
Chapter 01 - ‘Tackling the Challenges’ – As Seylan Bank implemented its new
strategic plan for a return to stable prosperity, there were many hurdles to
overcome.
Chapter 02 – The Challenges Within’ - To meet the benchmarks of a demanding
marketplace, Seylan Bank must review and rebuild many areas of its internal
operations.
Chapter 03 – ‘Pro Bono Publico’ - Seylan Bank measures its performance
according to the needs of the various stakeholders it serves – “for the public
good.”
Chapter 04 – ‘Lessons Learned’ - What the experience of averting a financial
crisis has taught Seylan Bank about building a profitable path to the future
Chapter 05 – ‘Strategy Update’ - Measuring the Bank’s progress in relation to
the steps set out in the Three-Year Strategic Plan 2009-2011.
‘Benchmarks of Success’ - The ultimate measures of Seylan Bank’s return to stability
and growth are the financial and operational results for 2010.
In an endeavour to increase overall efficiency while aligning itself with the
best industry standards and performance indicators, Seylan last week launched a
VRS scheme open to 250 of its 3622 employees. This was also the very first time
in the history of any bank in Sri
Lanka that a VRS scheme was made available
on an exclusively on-line basis, thus also signifying the adoption of new
processes and more advanced technology across its operations.
With the VRS, Seylan will also roll out a series of strategic measures. Among
them are organizational restructuring, investment in advanced technology, and
employee job enrichment and engagement processes by benchmarking international
best practices from within and outside the country.
Added to this will also be further investment on continuous staff training and
development. The Bank will also take strategic measures to improve the Brand
Equity of the Seylan brand as well as its sub-brands to further strengthen the
relationship the Bank has with its key stakeholders. The Bank is currently
rolling out a new product development process as well as investing on more
research to ensure the success of its current portfolio of brands as well as
intended new products and services.
The Bank is currently finalizing an internal marketing program which is
intended towards further revitalising the Bank’s staff to deliver an even
greater standard of customer service and flexibility. The Bank is further
strengthening its international network to deliver greater results on some of
the growth segments identified by the Bank’s recent strategic plan. The network
of branches will also be aggressively expanded to cater to the needs of the
island-wide customer base.
General Manager / Chief Executive Officer of Seylan, Mr. Kapila Ariyaratna
said, “Having identified optimum performance standards upon which to base our
operations, Seylan Bank is now geared to further develop its future business
strategies in a bid to deliver even greater results to all stakeholders. It
also looks to add further shareholder value by aligning itself to the exciting
new opportunities in the rapidly transforming Sri Lankan economy”.
Chairman Narangoda concluded thus, “We thank especially the Government of Sri
Lanka, the Governor of the Central Bank of Sri Lanka (CBSL), Bank Supervision
Department of CBSL and all of our stakeholders, including our devoted employees
and, above all, our loyal depositors, for their continued confidence in Seylan
Bank. I extend special thanks to my fellow Directors for their total commitment
and dedication. It is a testament to your steadfast support that we are able to
present what we feel is a compelling business case for ‘The Bank with a Heart’.
Photo : Seated at the Head Table (L to R) are :
Mr. Raaj De Silva - Chief Financial Officer
Mr. R Nadarajah - Executive Director
Mr. Ajith L Devasurendra - Director
Mr. Ishara C Nanayakkara - Director
Mr. Samantha P S Ranatunga - Director
Mr. Eastman Narangoda - Chairman
Mr. Kapila Ariyaratne - General Manager/ Chief Executive Officer
Mr. Lalith Withana - Director
Mr. Nihal Jayamanne PC - Director
Rear Admiral (Retd) Ananda Peiris - Director
Mr. Piyadasa Kudabalage - Director