The Case Study - Seylan Bank

Seylan Bank PLC Annual Report 2009 181Notes to the Consolidated Financial StatementsBANK2009 2008Advances Advances ChangeRs. ‘000 %* Rs. ‘000 %* %Total Gross Loans and Advances including Bills ofExchange, Pro Notes, Lease Rentals Receivableand Group Balance Receivable 92,680,732 114,765,174 (19.24)Interest in Suspense (Note 19.a) (5,658,891) (3,522,694) 60.64Total Loans and Advances including Bills ofExchange, Pro Notes, Lease RentalsReceivable and Group Balance Receivable(Net of Interest in Suspense) 87,021,841 111,242,480 (21.77)Non-Performing Advances (Gross) 31,149,959 33.61 19,428,234 16.93 60.33Non-Performing Advances(Net of Interest in Suspense) 25,491,068 29.29 15,905,540 14.30 60.27Less: Provision for Bad & Doubtful Debts (Note 19.a) (6,466,008) – (6,560,266) – (1.44)Net Non-Performing Advances 19,025,060 21.86 9,345,274 8.40 103.58* As a percentage of total loans and advances as at 31st December.Rs. 19,025.060 Mn. net non-performing advances is covered by tangible securities valued at approximatelyRs. 20,629.911 Mn.19.f.2 Non-Performing Portfolio of Grameen Micro Credit Company LimitedSubsequent to the Balance Sheet date the Bank has restructured its loan portfolio to Grameen Micro CreditCompany Limited (Rs. 2.725 Bn.) and obtained approval from the Monetary Board to convert Rs. 1 Bn. of theoutstanding loans to 15% Cumulative, Redeemable, Convertible Preference Shares of the said company.Further, Bank has converted the balance of Rs. 1.725 Bn. to Secured Debentures at an Interest Rate ofTreasury Bills +10% per annum (maturing 2012 to 2019).2009Rs. ’000Grameen Loans Outstanding as at the Balance Sheet date 2,499,468Interest Receivable 225,532Amount Considered for Restructuring 2,725,00019.f.3 As per the direction issued by the Central Bank of Sri Lanka on 31st December 2004, the Non-PerformingRatio net of Interest in Suspense after inclusion of Investment Properties is as follows:2009 2008% %Non-Performing Ratio before Adjusting Investment Properties 29.29 14.30Non-Performing Ratio after Adjusting Investment Properties 29.71 14.70