Sampath Bank is gearing up to changing its strategy next year to focus on volumes targeting aggressive growth pattern and challenging the deposit and lending rates in the market. “In the coming months and next year our growth pattern will continue aggressively and challenge deposit rates and lending rates in the market,” Sampath Bank Managing Director Harris Premaratne said at an investor forum organized by the bank in Colombo last week. The bank recorded a profit after tax of Rs. 1.9 billion growing at a rate of 52.7% over the same period the previous year.
The bank noted that its growth in advances and deposits are far above industry average and the strategy adopted is to get volumes as the net interest margins are considered to be under threat.
The NPL was down by 3.19% and plan to achieve around 2% next year by attracting state businesses into the bank, he said.
They intend to attract customers with good lending rates and will be targeting corporate business in the big cities while looking at retail outside to establish a stable customer base, Mr. Premaratne said.
The Cost/Net Income Ration of the bank rose to 59.86% for the 1H of 2011 which is expected to undergo a natural drop with new branches raising business volumes in the future.
The Net Interest Margin dropped from 5.27% in the 1H 2010 to 4.11% in the 1H 2011, eroded a substantial amount of Net Interest Income. The loss due to the net interest margins falling this year was Rs.1.2 billion.
During this period the first priority was business growth and the bank looked to increase its deposit base while also being mindful of its interest margin, Sampath Bank Chief Financial Officer Ranjith Samaranayaka said.
The total deposit and total asset bases of the bank grew by 24.4% and 28.9% respectively during the period ending June 30, 2011.
Sampath Bank operates 188 branches with 40 opened in 2010 with plans underway to create about six more next year. |
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