Notes to the Consolidated Financial Statements - Seylan Bank

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308 North Bound > Seylan Bank Annual Report 2011 Notes to the Consolidated Financial Statements 21.1 Analysis of Provision for Loan Losses and Interest in Suspense BANK GROUP 2011 2010 2011 2010 Loan Loss Interest in Loan Loss Interest in Loan Loss Interest in Loan Loss Interest in Provision Suspense Provision Suspense Provision Suspense Provision Suspense Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Bills of Exchange (Note 20) 10,126 – 21,946 – 10,126 – 21,946 – Loans and Advances (Note 21) 4,817,003 4,686,212 6,034,555 4,790,323 4,817,003 4,686,212 6,034,555 4,790,323 Lease Rental Receivable (Note 22) 212,532 43,458 230,978 48,909 212,532 43,458 230,978 48,909 5,039,661 4,729,670 6,287,479 4,839,232 5,039,661 4,729,670 6,287,479 4,839,232 21.2 Analysis of Provision for Loan Losses BANK GROUP 2011 2010 2011 2010 Loan Loss Loan Loss Loan Loss Loan Loss Loan Loss Loan Loss Loan Loss Loan Loss Provision Provision Provision Provision Provision Provision Provision Provision Specific General Specific General Specific General Specific General Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Bills of Exchange 5,180 4,946 12,267 9,679 5,180 4,946 12,267 9,679 Loans and Advances 4,476,321 340,682 5,508,722 525,833 4,476,321 340,682 5,508,722 525,833 Lease Rental Receivable 175,921 36,611 195,835 35,143 175,921 36,611 195,835 35,143 4,657,422 382,239 5,716,824 570,655 4,657,422 382,239 5,716,824 570,655 Loan Loss Provision - Specific 4,657,422 5,716,824 4,657,422 5,716,824 Loan Loss Provision - General 382,239 570,655 382,239 570,655 Total Loan Loss Provision - (Note 21.1) 5,039,661 6,287,479 5,039,661 6,287,479 21.3 Movement in Loan Loss Provision BANK GROUP 2011 2010 2011 2010 Specific General Specific General Specific General Specific General Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Balance Brought Forward 5,716,824 570,655 5,956,832 509,176 5,716,824 570,655 5,956,832 509,176 Additional Provision/ (Reversal) Made 827,401 (188,416) 1,509,512 61,479 827,401 (188,416) 1,509,512 61,479 Fully Provided Loans Written Off (1,038,972) – (681,393) – (1,038,972) – (681,393) – Recoveries Made During the Year (879,138) – (1,024,823) – (879,138) – (1,024,823) – Exchange Rate Variance on Foreign Currency Provisions 31,307 – (43,304) – 31,307 – (43,304) – 4,657,422 382,239 5,716,824 570,655 4,657,422 382,239 5,716,824 570,655
North Bound > Seylan Bank Annual Report 2011 309 21.4 Movement in Interest in Suspense BANK GROUP 2011 2010 2011 2010 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Balance Brought Forward 4,839,232 5,658,891 4,839,232 5,658,891 Interest Suspended During the Year 2,340,734 2,135,062 2,340,734 2,135,062 Interest Recovered During the Year (1,283,856) (1,266,686) (1,283,856) (1,266,686) Reversal of Interest for Write Off/Write Down (1,172,927) (1,681,923) (1,172,927) (1,681,923) Exchange Rate Variance on Foreign Currency Provisions 6,487 (6,112) 6,487 (6,112) 4,729,670 4,839,232 4,729,670 4,839,232 21.5 Basis for Provisioning As given in Note 21.2 General provision is made as per the Central Bank of Sri Lanka Guidelines on performing loans and advances except for credit facilities secured by Cash Deposits, Gold and Government Securities. The cumulative general provision of Seylan Bank as at 31.12.2011 is Rs. 382.24 Mn. (2010 - Rs. 570.65 Mn.) and meets the regulatory requirement. The general provision is 0.34% (2010 - 0.58%) of loans and advances net of interest in suspense as at the Balance Sheet date. 21.5.1 Non-Performing Lending Portfolio Loans, advances and leases are classified as non-performing as given in Note 21.6.1. The criteria used for the classification of lending portfolio of the Bank as non-performing is set out below. This is in accordance with the Direction issued by the Central Bank of Sri Lanka on 8th May 2008, on ‘Classification of Loans and Advances, Income Recognition and Provisioning’. Categorisation of Non-Performing Lending Portfolio Type of Facility Determinant Overdue/Special Mention Substandard Doubtful Loss Overdrafts Credit facilities repayable in monthly instalments Other credit facilities Credit Cards Exceeds the sanctioned limit for a continuous period of Principal and/ or interest due and unpaid Payments are in arrears from the due date Minimum payments are in arrears from the due date 90 days or more but less than 180 days 180 days or more but less than 360 days 360 days or more but less than 540 days 540 days or more 3 instalments or 6 instalments or 12 instalments or 18 instalments or more but less than more but less than more but less than more 6 instalments 12 instalments 18 instalments 90 days or more but less than 180 days 90 days or more but less than 120 days 180 days or more but less than 360 days 120 days or more but less than 180 days 360 days or more but less than 540 days 180 days or more but less than 240 days 540 days or more 240 days or more
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Notes to the Consolidated Financial Statements - Seylan Bank

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