Sampath Bank produced strong results for the nine months ended September 30, 2021, despite the challenges caused by the prolonged impact of the Covid-19 pandemic.
Due to the strategic initiatives and target orienting business plans, the Bank was able to steer through volatile economic conditions created by the pandemic to record a sizable 76.4% improvement in profit after taxes, compared with last year.
The Bank reported a profit after tax (PAT) of Rs 8.98 bn and profit before tax (PBT) of Rs 12.32 bn for the period under review, denoting significant growth of 76.4% each over the corresponding period in 2020.
Sampath Bank’s NIM for the reporting period was 3.46%, an improvement of 16 bps compared to the figure reported at the end of 2020.
The Bank recorded a sizable 30.9% increase in fee and commission income during the period, primarily driven by cards, electronic channels and trade-related operations.
Despite the improvement reported in NPL and Stage 3 loans, additional impairment provisions were charged as management overlay to reflect potential credit losses due to the Covid-19 related uncertainty.
The Sampath Group too posted growth in the first nine months of the current financial year, with Group PBT and PAT growing by 84.6% and 87.9%. The Group recorded a PBT of Rs 13.48 Bn and PAT of Rs 9.79 Bn compared to the PBT of Rs 7.30 Bn and PAT of Rs 5.21 Bn recorded in the corresponding period.
Lower interest rate regime prevailed during the period caused the interest income to decrease compared to the corresponding period in the previous year. Although the pressure on interest income was partly absorbed by increased interest income generated from other investment securities, total interest income for the period decreased by 7% to Rs 63.2 bn compared to Rs 68 bn recorded for the corresponding period in the previous year.
Customer deposits on current and savings (CASA) accounts grew by Rs 81.5 bn. This coupled with lower interest rates that prevailed in the first nine months of 2021, saw the Bank’s interest expenses declined by 20.2% for the period under review.
The drop in interest income was offset by the drop in interest expenses. Therefore, on an overall basis, Net interest income for the first nine months of the year grew to reach Rs. 29.69 bn as at September 30, 2021, up by 14.2% compared to Rs. 25.99 bn reported for the corresponding period in 2020. Consequently, Net interest margin (NIM) improved marginally compared to December 31, 2020.
Net fee and commission income (NFCI) grew by 30.9% from the figure reported in the corresponding period of the previous year. This segment comprises income from various sources such as creditcards, trade, and electronic channels.
The Bank recorded a net trading loss of Rs 98 mn. Meanwhile, Net other operating income for the period stood at Rs 4.29 bn, an increase of 38.3% compared to the corresponding period in the previous year. This growth was mainly attributed to the higher realised exchange income stemming from the 8.2% depreciation of the Sri Lankan Rupee against the US Dollar.