Sampath Bank in aggressive expansion drive

Sanjeevi Jayasuriya

The Sampath Bank completed an aggressive expansion plan for the last year by widening the reach from 100 to over 200 branches thereby having an extensive presence in the country.

The Bank’s branch expansion and the exceeding of the industry average in terms of credit and deposit growth created a milestone in its 25 years of operation in the country. However, the credit growth and branch expansion were not carried out at the expense of credit quality as the NP ration dropped from seven percent four years ago to a healthy 2.8 percent at present, Sampath Bank newly appointed Managing Director Aravinda Perera told Daily News Business.

“We are at present having our presence in most important towns in the country. This enabled us to book new deposits and loans where most of the new branches are looking to break even in this year,” he said.

The bank will continue to branch expansion process where potential locations are available. The bank expects that the continuous growth will reaffirm its efforts to become the number one commercial bank in the country.

We are progressing towards this goal and it is a long process. The bank will undergo changes and the board of management will see major changes shortly. We have performed better than the competition on profitability and plan to do well in 2012 as well, he said.

‘The banking industry is very competitive and we could envisage increased competition in 2012. The competitiveness is good for the customers and there will be a fierce battle for deposit mobilization as a few more foreign banks including an Indian Bank is looking at business opportunities in Sri Lanka, he said.

The entire banking industry showed positive results and this augurs well in the long run as the country has an emerging economy. The regulatory framework has made banks more stable coupled with financial standards and risk mitigating techniques introduced in the recent past that are in the process of implementation.

This will have positive impact on the long term stability of the system.

“Banks were given considerable tax concessions under the 2010 budget and we are directed to use this saving for development projects where the country could benefit and achieve economic progress. “The country is not overbanked and our savings habits when compared with other Asian countries are below than average. The bottom of the pyramid is not served properly.

It is necessary for the banks to go out to all remote areas of the country. The banks should focus more on internet and mobile banking and innovative products to cater to this market segment. “The mergers among the banks are not happening at present. However, capital adequacy requirement will lead to merges.

It is important not to kill the competition in the process. The draw back for Sri Lankan banks to go overseas is not having substantial capital. With the deposit drive we will be looking at venturing outside,” Perera said.