Financial health
Seylan Bank PLC as one the key commercial banks in Sri Lanka should maintain a sound a
sound and stable financial health. To analyze the financial health this report will look into the
key regulatory ratios of Seylan bank in comparison to the minimum regulatory requirement.
The capital adequacy of Seylan bank is analyzed through the following ratios. The common
equity tier 1 capital ratio is 10.69 % whilst the minimum requirement is 7%. The total capital
ratio of Seylan bank is 13. 59 % exceeding the minimum requirement by 1.09 %. The leverage
ratio which measures the bank’s ability to meet its financial obligations was 7.25 % and the
minimum requirement was 3%.
(YOUR COMMENT)
Regulatory liquidity is measured by statutory liquidity coverage ratio which surpassed the
minimum quota by 75 %. (Minimum requirement is 100%) The statutory liquid assets ratio was
25.51 % and banks were required to maintain at least 20 %.
(YOUR COMMENT)
Price Earnings Ratio for Voting was 3.87 % Non - Voting shares it was 1.99 %. Dividend Cover
ratio amounted to 4.08 % for the year 2022.
(YOUR COMMENT)
Operating cost to income ratio declined from 4.68 % to 35.24 %. Impairment charges for year
2021 was 10Bn and it increased to 26Bn in 2022. The profit after tax had grown by 3 % standing
at 4.7Bn. The ROA and ROE ratio was 0.74 % and 8.85 % respectively.
(YOUR COMMENT)
To assess the risk profile of the bank Seylan bank has adopted a standardized approach for credit
risk which amounted to 66.13% and the basic indicator approach for operational risk which was
15%. In Seylan Bank annual report it can be observed that the gross non-performing asset is
10.02 % even though the limit is 7.93 %.
(YOUR COMMENT)
(Seylan Bank PLC, 2023)
References
Seylan Bank PLC. (2023, February). Annual Report 2022.
https://www.seylan.lk/uploads/Annual-Report-2022.pdf