A bank's profitability has an effect on its safety and soundness. Earnings may be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, likely making the bank better able to withstand financial shocks. Conversely, losses diminish a bank's ability to do those things.
State Bank of Ceylon fell short of the national average on Bankrate's test of earnings, achieving a score of 4 out of a possible 30.
One widely used way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. State Bank of Ceylon's most recent annualized quarterly return on equity was 1.11 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $14,000 on total equity of $1.3 million. The bank reported an annualized return on average assets, or ROA, of 0.12 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.