Mr.Nimal J.B.Mamaduwa - General Manager / CEO |
SANASA Development Bank had performed well in the year ending 31st December 2008 registering a pre tax profit of Rs.303 million compared to Rs.161 million last year which is a growth of 88%. Post tax profit was Rs. 97 million as against Rs.52 million the previous year. VAT on financial services for the year 2008 was Rs.77.9 million as against Rs.35.3 million in 2007 and the income tax on profit was Rs.127.9 million as against Rs.72.2. million ( increase of 77% over the year 2007), resulting in the after tax profit of Rs.97 million, said Mr.Nimal J.B.Mamaduwa - General Manager / CEO in a press release.
Our main income contributor is in the disbursement of loans and the ensuing loan interest , This displayed an increase of 63% compared to 2007 with nett interest income notching Rs.773 million from Rs.493 million last year. Advances primarily to the Micro Finance sector also saw an incline of 32%, from Rs.6.4 million to Rs.8.4 million.
With our philosophy evolving primarily on a bottom up approach to development, we have concentrated heavily on building the savings deposit base to commendable levels, an increase of 36%, from Rs.6 billion to Rs.8.2 billion. The bank continued to maintain effective post credit followup and supervision on advances. However the gross NPL ratio (Net of Interest in Suspend) Increased to 6.33% from 4.19% during the corresponding period, whilst nett non performing advances ratio stands at 4.71% as at 31st December 2008. The increase is mainly due to the prevailing adverse economic conditions and due to the bank strictly adhering to the new classification guide lines issued by Central bank of Sri Lanka.
Branch Penetration
Our expansion plans are multifaceted as while we grow our grass root penetration, we are also keen on ensuring that our brand remains visible around the country. The branch network was added to with 13 this year, eight fully fledged branches and five extension offices, mainly concentrated in the outstation agricultural areas, bringing the total number of branches and extension offices to 45.
What is also significant is that we have begun to penetrate into the newly liberated north and east, already having five branches in the east which were opened in 2007.
Our plans for expansion are also around penetration into agricultural areas , focused primarily in the north central and north western provinces, as we feel we have a responsibility towards assisting the Government's drive for Sri Lanka to become self sufficient in agriculture.
Meeting Capital Requirements
For a smaller development bank like ours, meeting the statutory capital adequacy requirements can post one of the biggest constraints. The Central Bank now requires development banks to have a minimum capital requirement of Rs.1.5 billion by end of 2009 and hence in 2008, one of our biggest challenges was to make plans to raise this significant amount of capital to meet the deadline. Unlike the larger commercial banks, our primary target is the rural market and our main shareholder comprises the SANASA Primary Societies which hold 75% of the total shareholder base.
Although we were lagging behind the minimum capital requirement target as at end of December 2008 the bank is confident to reach the required capital before the end of the 3rd quarter 2009.
However the Tier 1 and Tier 2 capital as at 31st December 2008 stands at 10.97 % and 11.43 % respectively which are above the regulatory requirement.
Achievements
We are extremely proud to have received a prestigious accolade from the world renowned financial publication Forbes magazine. In 2008, SANASA Development was selected among the top fifty micro finance institutions in the world and the only Sri Lankan bank to be featured in this impressive line up. 645 micro finance institutions from all over the world were in the long list and SANASA Development Bank is extremely honoured to be featured among the top fifty.
We also made further global news when we were placed third among 1,500 micro finance institutions by the Micro Finance Exchange Institution USA.
We also won a National Business Excellence Award this year presented under the aegis of the National Chamber of Commerce. This award, presented in the specialised Banking and Finance Companies category, judges peers in the particular category based on stringent criteria selecting the best of the best. |
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