Sampath Bank posts Rs 558 million profit in Q1

Sampath Bank recorded a pre-tax profit of Rs 791.5 mn for the first quarter 2010.

It has registered a growth of Rs 93.3 mn (13.4 percent), over the previous year’s Rs 698.2 mn, aided by several factors the bank said yesterday.

The post tax profit of the Bank of Rs 558.610 mn for the first quarter 2010, recorded an increase of Rs 194.820 mn, (53.6 percent) over the previous year’s corresponding figure of Rs 363.790 mn.

This increase was due to the bank’s tax charge for the period under review, decreasing by Rs 101.494 mn, despite the increase of 13.4 percent in pre-tax profits, which in turn was facilitated mainly by the recovery of Rs 331.9 mn against a Foreign Currency Bond referred to above, not being liable for tax and the effects of certain other tax planning measures implemented.

The Bank’s continued success in professionally managing its core banking operations, paid rich dividends.

The Net Interest Income (NII), which is the net return of the Bank’s entire fund-based operations, made the single largest contribution for the increased profitability, by rising from Rs 1,741.5 mn in 2009 to Rs 2,199.5 mn in 2010, registering an impressive growth of Rs 458.0 mn or 26.3 percent.

Apart from the NII, the other income of the Bank, bulk of which is Commission and Fee-Based income, too recorded a growth of 9.6 percent in 2010, over 2009.

The only source of core-banking income, which recorded a negative growth (by 55.1 percent) in 2010 was exchange income, largely due to the revaluation loss of Rs 26.028 mn, incurred in 2010, as against the revaluation profit of Rs 113.994 mn recorded in 2009.

This in turn was mainly due to the appreciation of LKR against the US Dollar, from Rs 115.60 as at 31.03.2009 to Rs 113.95 as at 31.03.2010. On the group level No share of profit was recognized in 2010 under the Equity Method of Accounting in respect of LankaBangla Financial Ltd, (as against Rs 46.786 mn recognized in 2009), as this company is no longer an Associate Company of the Bank. Nevertheless, it was possible to record a healthy post-tax profit growth of 52.2 percent at group level as well, due to the improved financial performance of the other subsidiary companies of the Bank.

The Specific Provision for Loan Losses for the period under review amounted Rs 702.569 mn, as against Rs 254.718 mn for the corresponding period last year.

This increase of Rs 447.851 mn in specific loan loss provisions, was due to the Bank’s decision to make additional loan loss provisions.

Particulars			1st quarter	1st quarter Growth
					2010	2009

Pre-Tax Profit - Rs.Mn.			791.5	698.2	13.4%
Post-Tax Profit - Rs.Mn.		558.6	363.8	53.6%
Net Interest Margin (NIM)		5.59%	5.07%	0.52%
Return on Assets (ROA) (after tax)	1.42%	1.06%	0.36%
Return on Equity (ROE) (after tax)	18.55%	14.74%	3.81%
Earnings Per Share (EPS) Group-(Rs.)	7.90	5.77	2.13