Sampath Bank Group ptp Rs 2, 238.2 m in Q1

Sampath Bank Group which consists of Sampath Bank and four subsidiary companies continued with the growth momentum in the first quarter 2012, by posting impressive results in many key areas over the last year same period. pre-tax profit (PTP) of Rs.2, 238.2 million of the Group for the first quarter 2012 was a growth of Rs. 777.4 million or 53.2 %, over the previous year’s first quarter pre-tax profit of Rs. 1,460.8 million, with Sampath Bank, as the main entity of the Group contributing bulk (96%) of the profit.

Dhammika Perera	Aravinda Perera

The post - tax profit of the Group amounted to Rs. 1,495.0 million, recording a growth of Rs. 502.5 million or 50.6%, over the post-tax profit of Rs. 992.5 million for the last year same period. The bank’s pre-tax profit which rose to Rs. 2,150.8 million in the 1st Q 2012, reflected an increase of Rs. 802.2 million or 59.5% over the pre-tax profit of Rs. 1,348.6 million for the 1st Q 2011. The post –tax profit of the bank recorded a growth of 59.1 % over the same period of last year, rising from Rs. 898.8 million in 2011 to Rs.1,430.0 million in 2012.

The lower PAT growth rate of 50.6% at the group level was mainly due to the drop in profits of the stock brokering subsidiary, SC Securities Company, arising from the current situation in the Colombo Stock Market.

Net interest income (NII), which is the main source of income from the fund based operations and representing over 50% of the total operating income, rose from Rs 2,060.5 million 1st Q 2011 to Rs 2,458.6 million in the first quarter 2012, recording a significant growth of 19.3%.

This increase was achieved despite the net interest margin (NIM), which stood at 4.22% in first quarter 2011 dropping to 3.86% in the first quarter 2012, as a result of cost of funds increasing at a faster rate than the rise in average yield rates of both the customer advances and government securities held.

Hence, this significant growth in NII was largely due to the high growth rates recorded by the bank in key business volumes, namely 33.7% in customer advances, 31.9% in total assets and 25.3% deposits during the one year period ended March31,2012.

Exchange Income the key contributory factor for the high profit growth in the first 2012, rose from Rs.137.9 million in the first quarter 2011 to Rs.1,427.6 million in the first quarter 2012, recording a growth of Rs.1,289.7 million or 935%. This was facilitated mainly by the increase in the revaluation gains on the foreign currency reserves held in the Bank’s FCBU, aided by a sharp depreciation of Rupee against the US Dollar in 2012 ( from Rs. 113.9 as at 31st Dec 2011 to Rs. 128.20 as at 31st March 2012) and the substantial increase in the Dealing Room’s trading Profits.

Other income of the Bank, bulk of which is Commission and Fee-Based income, too recorded a growth of Rs.100.7 million or 14.6% in 1Q 2012 over the same period in 2011 as a result of Increased economic activity in the market and the rapid growth achieved by the Bank in its lending activities. The only source of other income, which recorded a negative growth (85.6%) in first quarter 2012 was capital gain on share trading, which amounted to Rs 11.3 million as against Rs 78.6 million reported in first quarter in 2011.

Operating expenses of the Bank which stood at Rs. 1,838 million in the first quarter 2011, rose to Rs. 2,132 million in the first quarter 2012, recording an increase of Rs. 294 million or 16%. This growth in operating expenses was largely due to the incremental cost incurred in connection with the opening of 35 new branches in 2011and the increase of 697 in the staff cadre, which too was due to the expansion drive.