Business Times

Seylan to shed 250 jobs in April

Seylan Bank (Seylan) is gearing for a Voluntary Retirement Scheme (VRS) aimed at shedding 250 jobs, according to officials. “By April end we plan to go for a VRS,” Eastman Narangoda, its chairman told the Business Times. He said that they are in the process of obtaining Ministry of Labour sanction for this process. He added that the nitty-gritty of this move is still not finalized but it will be targeted for 250 excess staff.

He said the bank managed to recover more than Rs. 10 billion out of the Rs. 32 billion loans last year. “This year too we’re planning to reach Rs. 10 billion,” Mr Narangoda said. He said this aggressive recovery policy, supported by selective lending is expected to further improve Seylan’s asset quality.

With this situation, some analysts projected the bank’s Gross Non Performing Assets (NPL) to reach 10% by the end of next year. “Seylan’s recovery efforts are aggressive, which can lead to its NPL recovery ratio to improve,” an analyst said.

He said Seylan’s Capital Adequacy Ratio (which measures a bank's capital to its risk) now stands at 13.5%, while the Liquid Asset Ratio (which is the proportion of total assets readily convertible into cash that a bank must maintain in order to repay deposits on demand) is at 26%. He said Seylan’s private placement in The Finance Co (TFC) with Rs. 200 million was done as the bank saw that this company has future potential. “We will continue to invest in firms which we see as potentially viable businesses,” he said.

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