Sampath Bank earnings for 1H2022 eases

Despite the prevailing economic turmoil, Sampath Bank posted a profit after tax (PAT) of Rs. 7.1 billion and profit before tax (PBT) of Rs. 9 billion for the period ended 30th June 2022, reflecting a minor increase of 0.3 per cent and a decrease of 5.5 per cent respectively compared to the figures declared in 1H 2021.

In the meantime, the Group declared a PAT of Rs.7.4 billion and PBT of Rs. 9.6 billion, a 2 per cent and 5.5 per cent respectively over the first half of 2021, the bank said in a statement last week.

It said the bank continued to maintain a solid capital base and stable liquidity profile in the first half of 2022 notwithstanding multiple economic challenges. “The bank remains vigilant in identifying the current economic issues and has continued to implement in a proactive manner the required countermeasures, clearly demonstrating its strength and stability.  In line with that objective and in order to improve the foreign currency liquidity position, the bank continues to focus and promote inward remittances as well as to encourage the inflow of export proceeds. The bank further reinforced its commitment to all its stakeholders by continuing to support all affected segments to sustain their respective businesses in order to ride out the current economic crisis,” the statement said.

Total interest income increased by 41.1 per cent year on year to Rs.59.2 billion in the first half of 2022, compared to Rs. 41.9 billion in the same period of the previous year. This significant increase in interest income is due to the upward trend in interest rates in the first half of 2022. The AWPLR at the end of the reporting period reached 22.62 per cent, which is 1,711 bps higher than the rate reported on 30th June 2021. Furthermore, the current AWPLR surpassed the end 2021 figure by 1,401 bps. At the same time, the interest rate on a one-year treasury bill climbed by 1,861 bps from the Treasury bill rate reported at end of 30^th June 2021 and stood at 23.84 per cent at the end of 30th June 2022.

The bank recorded a significant increase of 69.9 per cent in its net fee and commission income (NFCI) in 1H 2022 compared to the same period of the previous year. NFCI is made up of income from a variety of sources, including loans and advances, credit cards, trade, and electronic channels. In the period under review, significant growth was noted in card-related business volumes and as well as fee and commission income from trade-related activities.

During the first half of 2022, net other operating income increased to Rs.16 billion, an unprecedented 378 per cent increase compared to Rs.3.4 billion recorded in the corresponding period of the previous year. This was mainly due to the 80 per cent depreciation of LKR against US Dollar. Meanwhile, the bank posted a net trading loss of Rs. 2.5 billion, compared to the gain of Rs. 46 million reported during the corresponding period of the previous financial year. Total exchange income for the first six months of 2022 was a phenomenal Rs. 13 billion compared Rs. 3 billion registered in 1H 2021.

The bank continues to recognise elevated risk industries and moved such customers to Stage 2 during the period. In addition, the bank closely monitored the customers’ behaviour and shifted them from Stage 1 to Stage 2 based on their capacity to bear the adverse impacts brought on by economic issues.