Financial Times

SMB Group profits slight drop in 2005
Profits at the Seylan Merchant Bank (SMB) Group dropped marginally in 2005 due to significant provisions being made during the year, the company said.
Post tax profits eased 2.66 per cent to Rs 54.68 million for the year, while the operating profit before associate company's profit and taxation reduced by 2.41 per cent to Rs 63.36 million.

SMB Deputy Chairman Rohan Senanayake said before provisions the company had a 10.88 per cent growth in profitability but “during the year we had to make a Rs 40.14 million loan loss provision. As a result of this significant provision our profits reduced but we were able to contain the decline to a marginal one.” However, he said, they were satisfied with the performance for the period under review.

The unexpected increase in taxation required the company to significantly increase tax provisions and that in turn adversely affected the Group's bottom line, he added. The group reported, in a media statement, a 22.35 per cent increase in interest income, from Rs 581.07 million as at December 31st, 2004 to Rs 710.91 million for the concluded financial year.

The net income of the Group increased from Rs 699.71 million to Rs 810.82 million at the end of 2005, an increase of 15.87 per cent or Rs 111.10 million. Net interest income also recorded an improvement, rising from Rs 187.88 million to Rs 213.32 million, a percentage increase of 13.54 percent. In other results, the total assets of the Group rose by 20.97 per cent to Rs 4.98 billion as at December 2005, from Rs 4.12 billion as at December 2004.

Shareholders' funds before minority interest also recorded a significant increase from Rs 244.46 million to Rs 405.45 million. This was an increase of Rs 160.98 million or 65.85 per cent.

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