Sampath posts Rs 2.1b profit in 1H

Sampath Bank Group which comprises Sampath Bank and four subsidiary companies, continued its growth momentum in the first half of 2011, by posting impressive results in all key areas over the last year same period.

Pre-tax profit of Rs 2,977 mn of the Group for first half 201l was a growth of Rs 1,092 mn or 57.9 percent, over the previous year’s pre-tax profit of Rs 1,885 mn, with Sampath Bank contributing bulk (94.24 percent) of the profit, as the main entity of the Group.

The post - tax profit of the Group for the 1H 2011 which amounted to Rs 2,131 mn, recorded a growth of Rs 765 mn or 56 percent, over the post-tax profit of Rs 1,366 mn for the same period last year.

Marked improvements in the performance of all four subsidiary companies during the period under review facilitated recording this higher profit growth rate at the group level in 2011.

The Bank’s pre-tax profit of Rs 2,805 mn in the 1H 201l, reflected an increase of Rs 1,033 mn or 58.3 percent over the pre-tax profit of Rs 1,772 mn for the 1H 2010. The post -tax profit of the Bank recorded a growth of 52.7 percent over the same period of last year, rising from Rs 1,302 mn in 2010 to Rs 1,988 mn in 2011.

The above profit growth was achieved despite many challenges posed by market forces and the expansion drive undertaken by Bank. The mark to market losses in the 1H 2011, arising from the market price fluctuations on the equity and Treasury Bill investments held by the Bank in the trading portfolio amounted to Rs 146.3 mn, as against a net gain of Rs 195.7 mn from this source, in the corresponding period last year.

In addition, the revaluation losses arising from the appreciating Rupees against the US Dollar amounted to Rs 93.6 mn, as against a loss of Rs 43.5 mn last year.

The Rupee appreciated against the US Dollar by Rs 4.10 over the period, from Rs 113.60 as at 30.06.2010 to Rs 109.50 as at 30.06.2011.

Though the Bank realized capital gains of Rs 411.2 mn by selling part of the scrip dividend shares received in the 1H 2011, this was a shortfall of Rs 259.3 mn compared to the capital gain of Rs 670.5 mn realized in the 1 H 2010 and this was partially due to the fall in the market value of shares on the Dhaka Stock Exchange.

The expansion drive of the Bank, which entailed opening of 71 branches during the last two years and recruitment of over 752 staff to manage this expansion drive, coupled with the cost of annual wage increases given effect, caused an increase in the Bank’s operating expenses which amounted to Rs 702.08 mn or 23.1 percent.

As a result, the cost and net income ratio of the Bank too rose to 59.86 percent for 1H 2011 from 53.47 percent in the 1 H 2010, which however is expected to undergo a natural drop, with these new branches raising business volumes in future.