The bank's pre-tax profit which rose to Rs 1,348.6 million in the first quarter 2011, reflected an increase of Rs 557.1 million or 70.4 percent over the pre-tax profit of Rs 791.5 million for the first quarter 2010. The post-tax profit (PTP)of the Bank recorded a growth of 60.9 percent over the same period of last year, rising from Rs 558.6 million in 2010 to Rs 898.8 million in 2011.
Financial results of the Sampath Bank Group, which consists of the bank and four subsidiary companies, were even better. Pre-Tax Profit of Rs 1,460.8 million of the Group for the first quarter 2011 was a growth of Rs 608.3 million or 71.3 percent, over the previous year's pre-tax profit of Rs 852.5 million, with Sampath Bank contributing 92 percent of the profit, as the main entity of the Group. The post-tax profit of the Group amounted to Rs 992.5 million, recording a growth of Rs 380.0 million or 64.2 percent, over the post-tax profit of Rs 604.5 million for the last year. Marked improvements in the performance of all four subsidiary companies during the period under review facilitated recording this higher profit growth rate at the group level in 2011.
Increased economic activity in the market and the rapid growth of 42.2 percent achieved by the Bank in its lending activities during the one year period ended March 31, 2011, paved the way for generating a higher fee-based and commission income, which recorded a significant growth of Rs 216.1 million or 45.6 percent in the first quarter 2011 over the same period in 2010.
Nevertheless, the exchange income recorded a negative growth (1.3 percent) in 2011, largely due to the revaluation loss of Rs 36.9 million, incurred in 2011 on the FCBU's retained profits, as against the revaluation loss of Rs 26.0 million incurred in 2010. This was solely due to the appreciation of Sri Lankan Rupee against the US Dollar, from Rs 113.95 as at March 31, 2010 to Rs 110.40 as at March 31, 2011.
The bank was also very successful in managing the net charge on loan losses in 2011. As a result of the bank's improving credit quality (as indicated by the reducing NPL volumes and NPL Ratios, it was possible to reduce the provisions made on specific loan losses to Rs 153.2 million. in 2011, (even with additional provisions totaling to Rs 100.0 million included therein), as against Rs 702.6 million made in 2010, which too was inclusive of additional provisions totaling to Rs 517.4 million. These additional specific loan loss provisions were made in line with the bank's policy of making such provisions against identified NPLs, ignoring the collateral held, aimed at improving the Provision Cover of the bank. As the bank achieved a Provision Coverage Ratio of 88.9 percent as at December 31, 2010, the need for such additional provisions was naturally low in 2011.
source - www.dailynews.lk
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