Financial Times

The Seylan Merchant Bank (SMB) Group last week announced strong pre and post tax profits and healthy growth in income for the first half of 2006.

In results released to the Colombo Stock Exchange (CSE), the Group reported a 71 per cent increase in operating profit before associate company's profit and taxation to Rs 47.9 million. Profit after tax was up 54 per cent to Rs 41.5 million.

Net income of the Group increased to Rs 419.8 million in the period under review, a growth of Rs 41.1 million or 11 per cent.

The increase in net income was chiefly due to an 18 per cent increase in other income of the Group which rose to Rs 68.9 million for the first half of 2006 from Rs 58.3 million in the corresponding period of last year. A 10 per cent increase in interest income to Rs 350.9 million also contributed to this growth.

Lease rental receivables of the Group rose to Rs 3.2 billion during the first six months of the year as against Rs 2.8 billion earned as at December 31, 2005. This was a growth of Rs 363.5 million or 12.7 per cent.

Deputy Chairman of SMB Rohan Senanayake attributed the increase in profitability to the increase in income and growth in the leasing portfolio of the Group, which will further strengthen SMB's position in the market.

"With SMB being selected as one of the trading members to operate on the CSE, with a full stock-brokering licence and the company's tie up with K&N Kenanga of Malaysia, SMB can now be considered a fully fledged merchant banking unit. SMB can now provide a one-stop concept in financial services," he added.

Interest and fees receivable of the Group rose significantly to Rs 57.5 million for the period ended June 30th, 2006 from Rs 43.7 million reported at the end of last year, reflecting a growth of Rs 13.8 million or 31.6 per cent.

Net loans, advances and leases rose to Rs 4.1 billion in the same period from Rs 3.6 billion reported at end December last year. This was a growth of Rs 508.3 million or 13.9 per cent.

Total assets of the Group rose to Rs 5.3 billion from Rs 4.9 billion as at end December 2005, reflecting a growth of 306.5 million or 6.2 per cent. Net assets per ordinary share of the Group rose to Rs 9.93 from Rs 9.09 as at December 31st last year.The earnings per share of the Group rose to Rs 1.77 as at June 30, 2006 from Rs 1.54 at end December 2005.