Spends Rs 1 b for expansion:

Sampath to draw profits from all branches

Ravi LADDUWAHETTY

Sampath Bank will draw profits from its 200 plus branches from next year and the branch expansions will be therefore restricted. “We have done an analysis of the new branches where some have been given two years to break even while some have even broken even in eight and ten months but by next year, all the branches will report profits,” Sampath Bank Managing Director and CEO Harris Premaratne told an Investors’ Forum cum news conference at the Hilton Colombo last night.

He also said that Sampath had spent Rs 1 billion for the branch expansion last year where ten branches were parallely opened on the same day but the strategy from now onwards would be to open around six branches a year and those will be only in the metro areas.

“This is because we have covered the entire country by now and there is no need for an aggressive branch expansion,” he said.

He said, Sampath will also challenge the market with the best deposits and interest rates and added that the bank had gone out of the way to attract depositors with unusually high interest rates to accommodate clients.

He said that the strategy of the bank, in an environment of reducing interests would be to have the most competitive interest rates and have the growth in terms of volumes.

He also said that the ideal strategy that his bank would implement would be to let the corporates to grow so that the bank could provide the lending at the most competitive rates so that the corporates and the banks could both grow.

He also said that the bank had one of the best Non Performing Ratios among the local banks, claiming that the current 3.19% would be brought to 2%. There has also been substantial credit growth in the bank, but stressed that the environment was extremely competitive.

The progress in the Non Performing loans has been extremely good where it has been reduced from Rs 9 billion to Rs 5 billion, he noted.

One of the drawbacks to the development of the business was the foreign banks in Colombo offering dollar loans to local corporates. “One cannot earn 6% on corporate debt,” he said.

He also said that there was lots of potential in the pawning business especially with the well spread out network of branches.