Thirty-six percent growth in deposits, 32 percent growth in advances:

SANASA Development Bank surpasses Rs. 300 m pre tax profit in 2008

SANASA Development Bank had performed well in the year ending December 31, 2008 registering a pre tax profit of Rs. 303 million compared to Rs. 161 million last year, a growth of 88 percent.

Post tax profit was Rs. 97 million as against Rs. 52 million the previous year.

VAT on financial services for 2008 was Rs. 77.9 million as against Rs. 35.3 million in 2007 and the income tax profit was Rs. 127.9 million as against Rs. 72.2 million (an increase of 77 percent over the year 2007), resulting in the after tax profit of Rs. 97 million, said General Manager / CEO Nimal J.B. Mamaduwa, in a media release.

Our main income contributor is in the disbursement of loans and the ensuing loan interest. This is an increase of 63 percent compared to 2007 with net interest income notching Rs. 773 million from Rs. 493 million last year.

Advances primarily to the Micro Finance sector also saw and incline of 32 percent, from Rs. 6.4 million to Rs. 8.4 million.

With our philosophy evolving primarily on a bottom up approach to development, we have concentrated heavily on building the savings deposit base to commendable levels, an increase of 36 percent, from Rs. 6 billion to Rs. 8.2 billion.

The bank continued to maintain effective post credit follow-up and supervision on advances. However, the gross NPL ratio increased to 6.33 percent from 4.19 percent during the corresponding period, whilst net non performing advances ratio stood at 4.71 percent as at December 31, 2008.

The increase is mainly due to the prevailing adverse economic conditions and due to the bank strictly adhering to the new classification guide-lines issued by the Central bank of Sri Lanka.

Our expansion plans are multi-faceted as while we grow our grassroot penetration, we are also keen on ensuring that our brand remains visible around the country.

The branch network was added with 13 this year, eight full fledged branches and five extension offices, mainly concentrated in the outstation agricultural areas, bringing the total number of branches and extension offices to 45.

What is also significant is that we have begun to penetrate into the newly liberated north and east, already having five branches in the east which were opened in 2007.

Our plans for expansion are also around penetration into agricultural areas, focused primarily in the north central and north western provinces, as we feel we have a responsibility towards assisting the Government’s drive for Sri Lanka to become self-sufficient in agriculture. For a smaller development bank likes ours, meeting the statutory capital adequacy requirements can pose one of the biggest constraints.