Sampath Bank reported profit before tax (PBT) of Rs 16.8 bn in FY 2021, up by 50.7% against Rs 11.2 bn recorded in 2020. Profit after tax (PAT) for the year under review also grew by 55.2% to Rs 12.5 bn from Rs 8.0 bn recorded in the previous year.
Sampath Bank’s NIM reported a healthy increase of 31 bps over the previous year despite notable pressure on interest income
The Bank recorded a sizable 35.7% increase in net 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 made as allowance for overlay to reflect potential credit losses due to the Covid -19 related uncertainties.
The Sampath Group too posted significant growth for the current financial year, with Group PBT and PAT of Rs 18.8 bn and Rs 13.9 bn. All four subsidiaries recorded remarkable performance compared to the previous year.
Interest income of the Bank fell by 3% to Rs 85.9 bn in the year under review compared to the previous year. The lower interest rate environment which prevailed for most part of the year and the weak credit demand resulting from the pandemic-induced economic downturn, were the main reasons for this contraction. Notably however, the decline in interest income from loans and advances was partially offset by interest income from other financial instruments.
Interest expenses for FY 2021 declined by 19.1% compared to the previous year on the back of a strong improvement in CASA. The Bank recorded 640 bps growth in its overall CASA portfolio, while recording a decline in relatively costly term deposits. This change in the composition of the deposit portfolio coupled with the lower interest rate regime that prevailed for most part of the year contributed towards lowering interest expenses.
With the decrease in interest expenses making up for the decline in interest income, NII recorded a growth of Rs 7.8 bn and reached Rs 41.7 bn at the end of 2021. Consequently, the Bank›s NIM too reported a healthy increase of 31 bps over the previous year despite notable pressure on interest income.