Sampath Bank’s net profit grows by 22.7% in 1stQ 2014
View(s):Sampath Bank ‘proved its resilience to external factors’ by recording a strong quarterly growth with a profit before tax of Rs 1.66 billion, up 18.8 per cent from the previous year’s first quarter pre-tax profit.
In a media statement, the bank said the first quarter profit after tax stood at Rs. 1.2 billion, which is an increase of 22.7 per cent over the corresponding period in the previous year which amounted to Rs 978 million. The group too recorded a profit before tax figure of Rs. 1,778 million compared to Rs. 1,494 million recorded in the corresponding period in 2013 which is an increase of 19 per cent. Post-tax profits (PAT) of the group also improved by 21.4 per cent. PAT for the 1st quarter 2014 stood at Rs 1,276.5 million as against Rs. 1,051.6 million recorded in 2013.
Net Interest Income (NII), which is the main source of income from the fund based operations, fell from Rs 3,190.35 million in 1st quarter 2013 to Rs
2,788.4 million in 1st quarter 2014 due to slower credit growth experienced throughout the quarter, industry wide pressure on interest margins, declining gold prices in the global market etc.
The Net Fee and Commission income, which represented 17.44 per cent of the total Operating Income increased by Rs 145.3 million to Rs 747.89 million in the 1st Q 2014, over the same period in 2013. This growth was mainly in line with growth of business volumes experienced in the card operations, inward remittances and trade related services.
Operating expenses increased by 19.6 per cent from Rs. 2.32 billion in 1st Q 2013 to Rs. 2.77 billion in 1st Q 2014 due to an increase in staff cost and upgrading the existing branches to give a better service to our customers.
Total impairment reversal was Rs 503.82 million in 1st Q 2014 compared to a charge of Rs 291.41 million in the 1st Q 2013. This was mainly due to the reversal of collective impairment made against the pawning advances in 2013 owing to the slight increase in gold prices in the world market and auctioning of unredeemed pawning articles for which provision had been made earlier.
Discussing the future, the bank said it has demonstrated its ability to grow by focussing on enhancing customer experiences through improved service quality, effectively combining human resources and technological innovation.
“We have proved resilient to external shocks through effective risk management processes and our ability to respond to changes in our operating environment. Our strategy was to support the country’s ambition to be the regional hub for Energy, Aviation, Maritime, Knowledge, Commercial and Tourism. We also continued our support to the agriculture sector, focussing particularly on the value addition to these commodities and also ensured that we maintain a minimum of 10 per cent lending to the agriculture sector as directed by the Central Bank,” the statement said.