Sampath Bank performs well

Records over Rs 1 billion profit in the first nine months of 2008:

Sampath Bank group which consists of the Bank, its subsidiaries and the associate company recorded impressive results for the nine month period ended September 30.

The post tax profit for the first time of the group crossed the Rs. 1 billion mark and stood at Rs. 1,123.1 million, which represented a growth of Rs. 228.9 million or 25.6 percent, over the post tax profit of Rs. 894.1 million recorded for the corresponding period in 2007.

Sampath Bank, the largest entity of the group too recorded a post-tax profit of over Rs. 1 billion and stood at Rs. 1,007.7 million for the period, which amounted to a growth of Rs. 240.5 million or 31.3 percent, over the post tax profit of Rs. 767.2 million for the corresponding period in 2007.

However, corporate taxes of the Group and Bank for the nine month period ended September 30, 2007, given in the comparative columns of the quarterly accounts were restated as Rs. 1,021.4 million and Rs. 1,013.9 million respectively, due to the reversal of Deferred Tax Assets recognised on the Statutory General Provision on loan losses, which were made as per the new provisioning requirement of the Central Bank,” CEO, Harris Premaratne said in Colombo yesterday.

Similarly, the pre-tax profit of the Group for the period under review crossed the Rs. 2 billion mark and reached Rs. 2,111.4 million, registering a growth of Rs. 195.9 million or 10.2 percent, over the previous year.

The pre-tax profit of the Bank for the same period at Rs. 1,986.5 million too recorded a growth of Rs. 205.3 million or 11.5 percent over the corresponding period in 2007.

These resulted were achieved despite turbulent market conditions and the drop in foreign exchange income by Rs. 375.2 m or 64.9 percent and the increase of 42 percent in the charge for financial VAT during the period.

The drop in foreign exchange income was primarily due to the drop in revaluation gains on the FCBU’s retained profits kept in US$, resulting from the appreciation of Sri Lankan Rupee against the US$ from Rs. 113.4 as at September 30, 2007 to Rs. 107.85 as at September 30, 2008.

The increase in financial VAT was mainly due to the change in the method of calculation of this tax, as instructed by the tax authorities.

“It is significant to note, that despite the adverse effect of the above factors, both the group and the bank have recorded an impressive growth in profits, primarily due to the increase in net interest income from the fund based operations of the bank, which recorded a growth of Rs. 1,066.1 million or 28.9 percent, as compared to that of the previous year.”

Despite a moderate growth of 4.2 percent in total deposits and 4.4 percent in total advances during the nine month period under review, which were very much in line with the industry trends during the period, this significant improvement in net interest income was achieved mainly through better management of interest margins in an extremely volatile market.

This was amply demonstrated by the improvement in net interest margin of the bank, which rose to 4.68 percent in the nine month period under review in 2008, from 4.14 percent in 2007.

Lankabangla Finance Ltd, Sampath Bank’s oversees Associate Company continued to perform well.

Managing Director, Anil Amarasuriya said the Bank’s shares that were trading at the Bangladesh stock Market at 10 taka has no risen to 243. “Our leasing and merchant banking sector is very strong,” he said.

(SS)