Sampath Bank records Rs. 1.2 billion profits for 2007

Sampath Bank was able to achieve a satisfactory growth in all key business volumes, such as total deposits, total advances and total assets and record a post tax profit of Rs. 1.2 billion for the group, which amounted to a growth of 6 per cent over the previous year.

The profit growth was moderate largely due to the increase in both specific and general provisions on loan losses, necessitated by the high interest rate scenario in the country, which also pushed the NPL ratio up in the entire banking industry.

In addition, as a more prudential measure loan loss provisions were made on areas such as pawning, though such provisions were not mandatory.

Reflecting on the sound business growth and judicious management of funds, Sampath Group's total income for 2007 reached Rs. 18.1 bn, achieving a growth of 40 per cent, whereas the total interest income rose by 47.8 per cent. The group's profit growth was also facilitated by the contributions from its subsidiary, Sampath Centre Ltd and the Associate, LankaBangla Finance Ltd.

Total deposits of the Bank grew by 23.1 per cent to Rs. 99.4 bn, while the gross loans and advances reached Rs. 93.4 bn reflecting a 23% growth. Fee and Commission income improved by 9.4 per cent and other income increased by 23.9 per cent.

However, due to sharp rise in cost of funds resulting from the high interest scenario, the Group's operating income enhanced only by 14% to Rs. 7.5 bn for the year. In addition, the Bank,s cost to income ratio improved to 56.8% from 58% recorded during the previous year. The group's Tier I capital adequacy ratio stood at 7.8% and its total (Tier I and II) ratio was at 11.9%.

All these financial achievements were possible through a combination of prudent management of risks and strong strategic direction and future foresight, the Bank told its Shareholders on Monday.

Apart from achieving high performance on financial terms, the bank has achieved noteworthy standards in other areas as well.

The bank was selected as the second runner up at the Best Corporate Citizen Awards 2007 conducted by the Ceylon Chamber of Commerce. Furthermore, the bank was adjudged the winner in the Entrepreneur Development category, the bank was placed as the winner in Banking Sector category and was runner-up in Best Capacity Builder category at the National Business Excellence Awards.

It won the Gold award in the financial category at the National Best Quality Software Awards for its product innovation for "Sampath Mobile Cash System."