Sampath Bank reports impressive gains

The Sampath Bank Group which consists of Sampath Bank and four subsidiary companies, continued its growth momentum in the year 201l, by posting impressive results in many key areas over the last year. Consolidated pre-tax profit of the group was Rs 5.9 billion in 201l, up 24.8 %, over the previous year's pre-tax profit with the bank alone contributing Rs.4.8 billion.in a statement, the bank said post-tax profit of the group was Rs 4.1 billion, up 18.5% over 2010 The key challenges faced by the bank included the narrowing of Net

Interest Margin from 5% in 2010 to 4.13% in 2011 and the mark to market losses on its trading portfolio held, which amounted to Rs.189 million against a net gain of Rs.333 million in 2010. Benefits of the reduced corporate tax rate from 35% in 2010 to 28% in 2011 were not reflected in full in the post-tax profit growth rate of the bank. "This was due to the effective tax rate for the previous year being low, consequent upon the significant quantum of tax free income realized in 2010," the statement added. Income from foreign exchange trades rose from Rs.497.9 million in 2010 to Rs.837.4 million in 2011, up 68.2%. This was mainly facilitated by the increase in the dealing room profits and the revaluation gains on the foreign currency reserves held in the bank's FCBU, aided by the depreciation of the Rupee against the US Dollar in 2011 from 110.95 to 113.90. On the other hand, it was a revaluation loss of Rs.176.2 million in 2010, resulting from the currency appreciation of Rs 3.52 against the US Dollar in that year ( from Rs. 114.47 to Rs.110.95).