Sanasa Bank records Rs. 94.9mn profit for 2007

Sanasa Development Bank performed well in 2007, recording a pre-tax profit of Rs. 161 million compared to Rs. 155 million last year. Post-tax profit was Rs. 94.9 million as against Rs. 75.6 million in 2006.

Provision of VAT on financial services for 2007 was Rs. 35.3 million as against Rs. 30.5 million in 2006 and the income tax provision for 2007 was Rs. 31.1 million against Rs. 49 million in 2006 resulting in the after tax profit of Rs. 94.9 million, SDBL General Manager/CEO, Nimal J. B. Mamaduwa said.

Mamaduwa said 2007 performance has been very impressive with net interest income has continued to be the key contributor towards the bottom line, accounting for 43% of total income. 50% growth in advances and efficient management of funding costs enabled SDBL to maintain a healthy spread despite the rising trend in interest rates.

Deposits grew by a healthy 36% notwithstanding the adverse impact of the security and economic situation, market conditions and high interest regime.

Encouragingly, the Bank was able to attain this growth mainly due to increased customer confidence and the attractiveness of our products to all customer segments.

"Severe competition and high interest rates compelled us to offer higher rates to important customers. Increased presence, due to opening of new branches, also supported the deposit drive," Mamaduwa said.

Advances grew by an impressive 50% despite the prevailing constraints and uncertainties.

A strategic shift towards micro-finance, small projects and group lending to SANASA Societies helped us reap the desired results. Lending to a carefully selected segment in the corporate sector also contributed to sustainable growth in profitability and volume. The Bank continued to maintain a very healthy portfolio in 2007. Our NPA rate was 3.9% (as against 4.3% in 2006), well below industry standard.

This was due to our having maintained a high standard of evaluation and diligent, ongoing risk management, along with effective post-credit management and follow-up, Mamaduwa said.

During 2007, the bank opened eleven new customer centres (six branches and five extension centres). Three existing extension offices were upgraded to full-fledged branches.