Seylan Bank PLC reported a robust 20.29% year-on-year (y-o-y) increase in profit-after-tax (PAT) to Rs. 2.76 billion for the first quarter of 2025, defying industry headwinds from declining interest rates.
The lender’s profit-before-tax (PBT) rose 13.36% to Rs. 4.20 billion, driven by improved fee income and a sharp 83% drop in impairment charges compared to the same period last year.
Despite a 8.37% contraction in net interest income, falling to Rs. 8.59 billion due to lower market rates, the bank offset the decline with a 13.83% surge in fee-based income, reaching Rs. 2.09 billion from loans, cards, and trade services.
Operating expenses grew 4.62% to Rs. 5.36 billion, attributed to higher staff benefits and inflationary pressures, though management emphasised ongoing cost-optimisation efforts.
Seylan Bank’s total assets expanded to Rs. 785 billion, with gross loans at Rs. 469 billion and deposits at Rs. 647 billion, maintaining a CASA ratio of 29%. The bank’s capital adequacy ratios remained healthy, with a total capital ratio of 17.64%, well above regulatory requirements, and a liquidity coverage ratio (LCR) of 389.25% in all currencies, reflecting strong liquidity management.
Asset quality improved, with the impaired loan ratio declining to 1.98% (from 2.10% in 2024) and an 80.74% provision coverage ratio, signalling prudent risk controls. Return on equity (ROE) climbed to 15.81%, while earnings per share (EPS) rose to Rs. 4.34, up from Rs. 3.61 in Q1 2024.
The bank’s performance follows Fitch Ratings’ two-notch upgrade of its national long-term rating to ‘A+(lka)’ in January, citing improved financial resilience. Seylan Bank also expanded its corporate social footprint, adding 16 “Pahasara” libraries in Q1, bringing its total to 281 nationwide.
Seylan Bank Chairperson Buwaneka Aluwihare and CEO Ramesh Jayasekara credited the results to disciplined execution and diversified revenue streams, even as sector-wide net interest margins (NIM) compressed to 4.45% from 4.90% last year.
With stable capital buffers and a focus on fee-based growth, Seylan Bank aims to sustain momentum amid evolving macroeconomic conditions.