Sampath Bank records Rs 5.1 bn post-tax profit for 2011/12

Sampath Bank says its growth momentum continued in 2012, securing a post- tax profit of Rs. 5.1 billion growth, up 51.6 per cent from 2011.

In a statement issued last week, the bank said pre-tax profit rose to Rs. 7.2 billion, a rise of 45.5 per cent over 2011.

The banking group's post - tax profit totalled Rs. 5.3 billion, recording a growth 44.3 per cent.

The lower growth rate at the group level was mainly due to the drop in profits of the stock broking subsidiary, SC Securities Company, arising from the market conditions which prevailed in the Colombo Stock market, the statement said.

Net Interest Income ( NII), the main source of income from the fund based operations and representing over 50 per cent of the to- tal operating income, rose to Rs. 11.6 billion from Rs 8.9 billion in 2011. " This significant growth in NII was largely due to the high growth rates recorded by the bank in key business volumes, namely 21.63 per cent in customer advances, 24.93 per cent in total assets and 24.34 per cent in deposits," it said. Operating expenses of the bank rose to Rs. 9.3 billion from Rs. 8.0 billion earlier, largely due to the incremental cost incurred in connection with the opening of 38 new branches in 2011/ 2012 and the increase in staff cadre, which too was due to the expansion drive. " The bank anticipates that the cost increase rate would be somewhat lower in years to come, in view of the moderation expected in the branch expansion programme," it said. The growth rates in deposits and total assets in 2012 amounted to 24.34 per cent and 24.93 per cent, respectively and compared well with the industry's growth rates of 17.1 per cent and 20.9 per cent during the period. The growth rate in customer advances during 2012 rose to 21.63 per cent.

The bank was able to exceed the permitted credit growth of 18 per cent due to its ability in raising foreign currency funding totalling US $ 62.5 million, it said.

Sampath managed to grow its net loan book by 2.3 per cent during the quarter and 23.6 per cent year on year to Rs 213.7 billion by end of fourth quarter last year. The bank's loan book was primarily driven by its retail book where significant upside was seen in pawning ( contributed near 24 per cent of the total), credit cards and SME lending activities.