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Friday, August 6, 2010

Sampath Group profit tops Rs 1.3 b: Impressive first half results

Sampath Bank Group, which consists of the Bank and four subsidiary companies, continued to maintain its growth momentum in the first half of 2010, by recording all-round impressive results over the corresponding period in 2009.

Pre-tax profit of Rs 1,884.781 million of the Group for the first half of 2010 recorded a growth of Rs 304.5 million or 19.3 percent, over the previous year’s pre-tax profit of Rs 1,580.260 million, with Sampath Bank, contributing bulk (94.0 percent) of the profit as the main entity of the Group.

The Bank’s pre-tax profit which rose to Rs 1,772.165 million, as per the audited accounts as at 30.06.2010, reflected an increase of Rs 239.2 million or 15.6 percent over the pre-tax profit of Rs 1,532.965 million for the corresponding period in 2009.

The higher profit growth rate at group level is attributed to improved performance of the four subsidiary companies. The post -tax profit of the Group rose to Rs 1,365.647 million, registering a growth of 516.3 million or 60.8 percent, over the post-tax profit of Rs 849.330 million for the corresponding period last year.

Similarly, Sampath Bank too recorded a post-tax profit growth of 56.9 percent over the corresponding period last year, rising from Rs 829.765 million in 2009 to Rs 1,301.645 million in 2010.

Post-tax profit growth rates of both the Group and Bank, substantially exceeded the pre-tax profit growth rates, mainly due to tax free income accrued during the period, which included a capital gain of Rs 670.48 million, realized through the sale of bonus-shares received from the Lanka Bangla Finance Ltd, reversal of a loan loss provision of Rs 331.90 million and mark to market gains totalling to Rs 195.732 million.

Consequently, the Bank’s tax charge for the period under review, decreased by Rs 232.68 million, despite the increase of 15.6 percent in pre-tax profits.

Net Interest Income (NII), which is the net return of the Bank’s entire fund-based operations, made the single largest contribution for the increased profitability, by rising from Rs 3,619.1 million in 2009 to Rs 4,265.7 million in 2010,

registering an impressive growth of Rs 646.6 million or 17.9 percent. Other income of the Bank, bulk of which is Commission and Fee-Based income, too recorded a growth of Rs 124.532 million in 2010, over 2009.

The Specific Provision for Loan Losses of the Bank for the period under review amounted to Rs 1,386.0 million, as against Rs 368.2 million for the corresponding period last year.

The resultant increase of Rs.1,017.7 million in specific loan loss provisions was mainly due to the Bank’s decision to make additional loan loss provisions as a prudential measure against certain identified NPLs, over and above the prevailing time-based provisioning requirements, ignoring the collateral held.

Total deposit base and the total assets of the Bank grew by 10.85 percent and 9.0 percent respectively in the first half of 2010, at a faster pace than the industry growth rates of 4.30 percent and 6.27 percent respectively.