The bank's net profit for the year increased by 58% to Rs. 3.5 billion over last year where the profit after tax was Rs 2.1 billion. The reason for the higher growth in post tax profit over the pre tax profit of Rs.4.8 billion was the tax fee capital gain from the sale of bonus shares of Lanka Bangla Finance for Rs 655 million.
Net Interest Income (NII) was the single largest contributing factor for profitability where the growth of NII recorded a 9.2% increase over the previous year to Rs 8.5 billion. Moreover Non Performing Loan (NPL) ratio dropped to 3.95% from 7.63% over the last year.
Speaking at a media briefing bank's Chief Financial Officer Ranjith Samaranayake said "our non performing loan ratio has come down drastically. This is evident because our NPL stand at 3.95% where the industry level is 5.3%." Further he added all profit based ratios of Sampath bank such as Return on Assets, Return on Equity and Earnings per share have all recorded significant improvements over the last year.
The Other Income component in the income statement has grown sharply by 44.6 percent to Rs.623 million where as the difference in net profit with the corresponding quarter of the previous year is Rs.661 million. This shows that the major growth to the bottom line of the bank has come from other income.
Apart from that, receipts from other operating activities have increased from Rs.1.5 billion to Rs.4 billion during the year. For the quarter it has increased to a profit of Rs.1.9 billion from a loss of Rs.523 million.
The only negative growth recorded was the exchange income where a loss of Rs. 176.2 million was made due to appreciation of the rupee against the dollar
Harris Premaratne Managing Director Sampath Bank stated the bank went through a rapid expansion of its branch network and now possesses 175 branches all over the island.
"We added 40 branches for the year 2010. This is almost a branch every week. Currently we are the largest private bank in terms of branches in the North & East alone" he said.
And also company officials said they have increased the provision for loan losses amounting to Rs. 1.7 billion and even ignoring the collateral thus covering NPL up to 88.89%. The industry average according the officials is at 59.5%. However the increased recovery activities of the bank helped to off set the effect of the additional provisions on the bottom line.
Concluding the media briefing Samaranayake added "we have shown great profitability to our customers and shareholders. We are within reach to become the largest private bank in Sri Lanka. This is much more special as we are only 24 Years Old."
source - www.dailymirror.lk
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