‘Seylan Bank earnings spark positive outlook’

Seylan Bank illustrated a remarkable performance during 3Q2023 as Net earnings recorded an uptick of 89.8%YoY to LKR 2.0Bn during 3Q2023 (4.5Bn – 9M2023) broadly in line with First Capital Research’s target, mainly resulted by the improved Net fee and commission based income which increased by 7.4%YoY.

Furthermore, impairment expenditure displayed a notable decrease of 48.0%YoY on the back of decreased interest rates which subsequently offset the adverse effect from the contracted NII by 9.1%YoY. Along with a strong capital structure maintained above required levels, potential growth in the loan book as the businesses expand, coupled with the revival of the economy expected towards 2024, we broadly maintain our earnings target for 2024E at LKR 7.1Bn. Furthermore, with the optimistic outlook on the banking sector we maintain our target price for SEYB.N at LKR 96.0 and SEYB.X at LKR 60.0, respectively.

-First Capital Research