Seylan Bank also going down?

images-seylan-bankThe Net profit for the June 2009 quarter of Seylan Bank fell 39 percent to 188 million rupees from a year ago with both interest income and fee income falling and bad loans rising.

The bank, part of the Ceylinco group, said in a stock exchange filing that interest income fell 2.51 percent to 5.3 billion rupees with interest costs up 3.42 percent to 3.8 billion, resulting in net interest income falling 15 percent to 1.5 billion rupees.

First half net profit was down 58 percent to 188 million rupees compared with the same 2008 period. At bank level interest income grew less than one percent to 5.2 billion rupees in the June quarter while interest costs grew almost six percent to 3.6 billion resulting in net interest income falling by almost 11 percent to 1.5 billion.

Total provisioning for bad loans rose 24 percent to 200 million rupees. Specific provision doubled to 377 million.Total deposits at bank level fell almost eight percent to 100 billion rupees since December 31, 2008 with the total loans portfolio falling 27 percent to 70 billion rupees.

A controlling stake in Seylan Bank was offered for sale after it faced a run last year when another Ceylinco group firm collapsed. But the Central Bank found the offers inadequate and has now asked state institutions to take a 33 percent in the bank with the issue new ordinary voting shares to recapitalize the bank with a fresh injection of capital of three billion rupees.