Sampath Group posts Rs 4.25 b PBT in 1H 2012
Sampath Bank Group which consists of Sampath Bank and four subsidiary
companies, continued with the growth momentum in the first half 2012, by
posting impressive results in many key areas over the last year’s same
period, amidst increasing interest rates and shifting of funds towards
high cost deposits due to the prevailing market conditions.
The pre-tax profit of Rs.4, 250.1million of the Group for the first H
2012 was a growth of Rs. 1,273.2 million or 42.8 %, over the previous
year’s 1st H pre-tax profit of Rs. 2,976.9 million , with Sampath Bank,
as the main entity of the Group contributing bulk (97.7 %) of the
profit.
Chairman - Dhammika Perera |
MD - Aravinda Perera |
The post - tax profit of the Group amounted to Rs. 2,855.1million ,
recording a growth of Rs. 724.2 million or 34.0 %, over the post-tax
profit of Rs. 2,131.0 million for the last year’s same period.
The bank’s pre-tax profit which rose to Rs. 4,150.6 million in the
1st H 2012, reflected an increase of Rs. 1,345.3 million or 48.0 % over
the pre-tax profit of Rs. 2,805.3 million for the 1st H 2011.
The post –tax profit of the bank recorded a growth of 40.4 % over the
same period of last year, rising from Rs. 1,987.7 million in 2011 to
Rs.2,789.8 million in 2012.
The lower PAT growth rate of 34.0 % 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 4,192.3 million in the 1st H 2011 to Rs 5,398.8
million in the 1st H 2012, recording a significant growth of 28.8 %.
This increase was achieved despite the Net Interest Margin (NIM),
which stood at 4.11 % in the 1st H 2011, marginally dropping to 4.08 %
in the 1st H 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 30.2 %
in customer advances, 27.9 % in total assets and 23.6 % deposits during
the one year period ended 30.06.2012.
Exchange Income one of the the key contributory factors for the high
profit growth in the 1st H2012, rose from Rs.238.3 million in the 1st H
2011 to Rs.2,336.4 million in the 1st H 2012, recording a growth of
Rs.2,098.1 million or 880.6 %.
This was facilitated mainly by the increase in the revaluation gains
on the foreign currency reserves held in the Bank’s FCBU, as a result of
sharp depreciation of rupee against
the US Dollar in 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.203 miliion
or 15.2% in 1H 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
(100 %) in 1 H 2012 was capital gains on share trading, where the bank
realized capital gain of Rs. 411.2 million by selling part of scrip
dividend received from Lanka Bangla Finance Ltd during the 1 H 2011.
Operating expenses of the bank which stood at Rs. 3,747 million in
the 1st H 2011, rose to Rs. 4,458 million in the 1st H 2012, recording
an increase of Rs. 711 million or 19 %.
This growth in operating expenses was largely due to the incremental
cost incurred in connection with the opening of 18 new branches in 2nd
half 2011and the increase of the staff cadre, which too was due to the
expansion drive.
The bank anticipates that the cost increase rate would be somewhat
lower in years to come, in view of the moderation expected in the branch
expansion programme, given the fact that bank’s branch network has now
adequately covered most of the potential locations of the country.
Apart from this, effect of the salary increments during the year and
inflation in the economy also impacted on the increase in operating
expenses over the previous year’s same period.
Though, the Provision Cover recorded a marginal decline and stood at
72.85 % at the end of the 1st H 2012, due to the recoveries made against
the underlining NPLs, the specific Provision Cover still remained at a
higher level, compared to the industry average of 54 % on June 30 2012.
Together with the general provisions, the total Provision Coverage
Ratio of the bank stood at 87.20 % as at June 30 2012
Similarly, NPL Ratio too came down to 2.42% as at June 30 2012 from
2.65 % as at December 31 2011.
However, the regulatory general provision made against performing
advances had to be increased due to significant credit growth recorded
in the 1st half 2012. |