Sampath Bank records Rs. 1b profit in 2006

Sampath Bank has recorded an impressive growth in 2006. Pre-tax profits of the Bank grew by 75 per cent over 2005 to Rs 2.268 million, despite a 160 per cent increase in corporate tax and a 98 per cent increase in VAT.

The Bank posted Rs. 1,028 million, profit after tax, its annual report revealed.

The Bank’s profit after tax is an increase of 25 per cent over 2005.

The Bank has now joined the billionaires’ club. Income increase was mainly due to the volume increase in lending. Interest expenses increased by 51 per cent due to sharp growth in the deposit base and upward movement of interest rates, Bank Chairman Edgar Gunatunga said.

The assets of the Bank grew by 29 per cent or by Rs. 24.7 bn. Similarly, customer deposits increased by Rs. 15.4 billion or by 24 per cent. It is noteworthy to report that shareholders’ funds increased from Rs. 5.6 billion. in 2005 to Rs. 6.6 billion. in 2006.

The improvement of cost to income ration from 60 per cent in 2005 to 58 per cent in 2006 is a clear evidence of the improvement of operational efficiency of the Bank.

Hence, it was a more focused approach that helped Sampath achieve the milestone of Rs. 1 bn. during the year and saw profitability close at Rs. 1.03 billion. as at December 31, 2006, an increase of Rs. 207 mn. over last year and growth of 25%.

“We are positioned as the seventh largest commercial bank in Sri Lanka commanding a 6% market share of banking system assets, a share we aim to increase in the next few years.

Depositors grew by 24 per cent, while advances too showed considerable growth momentum to increase our portfolio by 26 per cent reflecting the Bank’s good profitability, improving asset quality, enhanced provision coverage and resulting in good solvency.

Fitch Ratings Lanka secured a AA-(lka) rating for Sampath, Gunatunga told shareholders.