The Sunday Leader

Sampath’s P.A.T. Up 48%

Sampath Bank PLC in the financial year ended December 31, 2009 saw income grow by 13.4% year on year (y.o.y.) to Rs. 25.2 billion and profit for the year by 48.4% y.o.y. to Rs. 2.1 billion.
The Bank’s C.E.O./Executive Director Harris Premaratne speaking to the press on Monday said: “We are showing some of the best ratios in the industry and we are trying to improve it y.o.y. in order to maintain the growth pattern and the momentum.
A few years ago Sampath was on par with Seylan. But during last year we left Seylan Bank and are now behind Hatton National Bank (HNB) and Commercial Bank. We hope to take the bank to a higher level by opening 40 branches each  this year and the next, therewith being on par with HNB and Commercial Bank.
It’s the sustainability of profits that we are looking at. We wish to sustain the profit growth at a higher level.”
He further said that non performing loans (n.p.l.) which shot up to 11% in June were however brought down to under 8% by the year end. “Next year we plan to bring the n.p.l. to a still lower level. The bank’s loans and advances portfolio grew by 3% last year.
This year the bank plans to open-up 10 branches in the north and 15 in the east. Premaratne further said that when they opened up branches in the north recently, one day’s deposits they got were higher than the deposits they got from any other area.
Group C.F.O./Executive Director Ranjith Samaranayake in his speech said that for the first time credit demand entered the negative terrain for the industry last year.
He said that though deposit growth was zero in the first quarter of 2009, by the year end it grew to 17.5% by winning over customer confidence. Sampath opened 19 branches last year, the highest, compared with the branches opened by other banks.
“By the end of the third quarter we were able to reverse the negative trend and record a positive growth, and end the year at a 3.2% credit growth.”
Net interest margins (N.i.m.) increased from 4.89% to 5.30%. But in 2007 Sampath’s n.i.m. were the lowest in the industry.
Exchange income grew by 19.7%, but commission and fee based income had a negative 11% performance due to a slowdown in lending activity. Operating expenses grew by 17.4%. A full provisioning of Rs. 1.069 billion was made on foreign currency bonds.
Sale of Lanka Bangla shares brought in Rs. 1.559 billion. Return on equity at 19.41% was an industry best. Share price value increased by more than 200% to the present, to go past Rs. 240 levels. Market capitalization increased from Rs. 4.7 billion to Rs. 16.5 billion. It comprises 1.34% of market capitalization at present, compared to 0.9% in 2008.
Credit growth is expected to pick up after the elections.
C.O.O./Executive Director Aravinda Perera said that the introduction of two new products would boost credit growth. Lending to Infrastructure, trade, pawning, leasing and housing are expected to spur credit growth.

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