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| Posted: 02 Mar 2009 17:22 | ||
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Administrator Currently Offline |
Posts: 563 Join Date: Dec 2008 |
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Sri Lanka's Seylan Bank said it made a loss of 709 million rupees in the December 2008 quarter compared with group net profit of 199 million a year ago with a sharp rise in bad loans and a slowdown in deposits. Total capital adequacy ratio at bank level has slipped to 8.32 percent as at December 31, 2008, below the minimum 10 percent level required.
At bank level, total interest income for the December quarter was up just three percent to 5.6 billion rupees, according to a stock exchange filing. Seylan Bank's interest expenses rose one percent to 3.7 billion rupees with net interest income up seven percent to 1.9 billion rupees. The group's net loss for the whole 2008 financial year was 164 million rupees compared with a net profit of 1,021 million in 2007. The bank's interest margin fell to 4.78 percent in 2008 from 4.92 percent in 2007. At bank level, total interest income for the 2008 financial year was up 18 percent to 21 billion rupees, with interest expenses up 26 percent to 13.9 billion rupees and net interest income up six percent to 7.2 billion rupees. Seylan Bank has been the subject of speculative trading in recent weeks in anticipation of a change in ownership. Its main shareholder, Lalith Kotelawala, chairman of the Ceylinco group of Sri Lanka, has said he would sell his stake in the bank to raise funds to pay off depositors in an unlisted Ceylinco group firm, Golden Key Credit Card Company, which collapsed last year. Kotelawala was remanded last week over fraud allegations at Golden Key. Last December, the Central Bank in a move to restore stability to Seylan Bank, dissolved its Board and placed the bank under the management of state-owned Bank of Ceylon. Analysts said Seylan Bank group's non-interest income was down 10 percent in the December 2008 quarter from a year ago. They said there was a steep rise in provisions for bad and doubtful debts, with the bank's net non-performing loans ratio rising to 9.29 percent in 2008 from 8.04 percent the year before (net of interest in suspense and provision, including investment properties). Total provisioning for the December quarter rose 236 percent to 906 million rupees and provision for the full financial year was up 150 percent to 1.4 billion rupees, driven by a sharp increase in specific provisions. Seylan Bank total deposits were down three percent to 110 billion as at December 31, 2008 from the year before, with only time deposits showing positive growth. Total deposits were down by eight percent or 9.2 billion rupees in the December quarter compared with the quarter ending September 30, 2008. |
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