Samba Bank profit shows handsome growth of 45pc
Samba Bank has witnessed an aggressive financial performance despite challenges of low discount rates as its profit increased by 45 percent to cross Rs 102.289 million with profit carried forward stand at Rs 630.692 million by end of June 2015.
According to the financial results announced on Wednesday by the board of directors, the bank's earnings from interest and noninterest income improved significantly which recorded the overall growth in the profits of banking company. The foreign bank's income from interest resources increased to Rs 547 million by end of June 2015 as compared with Rs 440 million of the corresponding period of previous year. Surprisingly, the overall non-markup income surpassed its interest income standing at Rs 796 million by June -end which grew to Rs 485 million from previous year.
The bank improved risk profile on a standalone basis as underpinned by strong capitalization, liquidity and asset quality indicators. Management has developed a long term business plan which envisages stringent liquidity and capitalization buffers. The bank has ample room to grow its risk weighted assets; capital buffer is projected to remain strong. To accommodate the expansion plan, significant investment in IT infrastructure is projected in future including the implementation of a new core banking system in 2016.
The profitability of the bank was impressive but its stands far behind its target to be met by the end of next year as per plan submitted to central bank.
In 2014, Samba Bank's board of directors projected a target of Rs 801 million as profit with revenue earning of Rs 2.319 billion for 2016 through its various interest and non-interest sources along with reduction in operations.
They decided to expand banks network and businesses in next few years with continuous improvement in financial liquidity and services to the customers in line with expected resilience in national economy.
The directors have planned to reduce risk factors in the bank's business growth whereas the expansion will be continued through targeted commercial strategy with a focus to stand strong among the peers of banking industry.
The bank's top brass decided to expand branches network to 40 by 2016 from existing 28 branches while keeping its focus on corporate lending at 10 percent of the overall.
They projected that the bank will grow its balance sheet by 20 percent gradually till 2016. The bank will maintain its overall deposit growth by 26 percent if the discount rates are contained between the range of 10 to 9 percent in next three years.
The board of directors has decided to curtail the liabilities of the bank to Rs 62 billion from Rs 75 billion in next three years whereas it asked the management to enhance the assets volume of the bank to Rs 73 billion from Rs 45 billion.
The board directed the banks management to attain the benchmark of Rs 30 billion gradually from Rs 24 under the head of investment net provision and enhance lending amount of Rs 15 billion to 25.5 billion by 2016.
Recently, JCR-VIS Credit Rating Company Ltd has upgraded the entity ratings of Samba Bank Limited from 'AA-/A-1' (Double A Minus/A-One) to ' AA/A-1' (Double A/A-One). Outlook on the assigned ratings is ' Stable'.