• Latest

Sampath Bank Moves Ahead Steadily to Prove its Ability to Withstand Strong Headwinds

Is the World in a Debt Spiral?

Is the World in a Debt Spiral?

World Economic Forum: Crisis of Democratic Capitalism

World Economic Forum: Crisis of Democratic Capitalism

World Economic Forum: Crisis of Democratic Capitalism

World Economic Forum: Crisis of Democratic Capitalism

ESQR Award Received by People’s Leasing Presented to the President

ESQR Award Received by People’s Leasing Presented to the President

Over 50% of digital payments could be conducted through secure closed-loop transactions by 2030

Over 50% of digital payments could be conducted through secure closed-loop transactions by 2030

Mobile Phones made 59% of total web traffic last year, almost 10% more than in 2021

Mobile Phones made 59% of total web traffic last year, almost 10% more than in 2021

Cybercrime the biggest risk to businesses in 2023, ahead of supply issues and inflation

Cybercrime the biggest risk to businesses in 2023, ahead of supply issues and inflation

Five surprising countries that produce the best weed in the world

Five surprising countries that produce the best weed in the world

Digital banking app downloads surged 54% in 2022 exceeding 26 million

Digital banking app downloads surged 54% in 2022 exceeding 26 million

People’s Leasing closes the Third Quarter of the Financial Year 2022/23 on a commendable note

People’s Leasing closes the Third Quarter of the Financial Year 2022/23 on a commendable note

Over 2.85 billion people to use online food delivery in 2023, revenues to jump by 20% YoY to $910B

Over 2.85 billion people to use online food delivery in 2023, revenues to jump by 20% YoY to $910B

People’s Bank continues to demonstrate its resilience

People’s Bank continues to demonstrate its resilience

Retail
Friday, March 31, 2023
Subscription
Advertise
  • Home
  • Issues
    • 2006
      • January 2006
      • February 2006
    • 2007
      • January 2007
      • February 2007
      • March 2007
      • April 2007
      • May 2007
      • June 2007
      • July 2007
      • August 2007
      • September 2007
      • October 2007
      • November 2007
      • December 2007
    • 2008
      • January 2008
      • February 2008
      • March 2008
      • April 2008
      • May 2008
      • June 2008
      • July 2008
      • August 2008
      • September 2008
      • October 2008
      • November 2008
      • December 2008
    • 2009
      • January 2009
      • February 2009
      • March 2009
      • April 2009
      • May 2009
      • June 2009
      • July 2009
      • August 2009
      • September 2009
      • October 2009
      • November 2009
      • December 2009
    • 2010
      • January 2010
      • February 2010
      • March 2010
      • April 2010
      • May 2010
      • June 2010
      • July 2010
      • August 2010
      • September 2010
      • October 2010
      • November 2010
      • December 2010
    • 2011
      • January 2011
      • February 2011
      • March 2011
      • April 2011
      • May 2011
      • June 2011
      • July 2011
      • August 2011
      • September 2011
      • October 2011
      • November 2011
      • December 2011
    • 2012
      • January 2012
      • February 2012
      • March 2012
      • April 2012
      • May 2012
      • June 2012
      • July 2012
      • August 2012
      • September 2012
      • October 2012
      • November 2012
      • December 2012
    • 2013
      • January 2013
      • February 2013
      • March 2013
      • April 2013
      • May 2013
      • June 2013
      • July 2013
      • August 2013
      • September 2013
      • October 2013
      • November 2013
      • December 2013
    • 2014
      • January 2014
      • February 2014
      • March 2014
      • April 2014
      • May 2014
      • June 2014
      • July 2014
      • August 2014
      • September 2014
      • October 2014
      • November 2014
      • December 2014
    • 2015
      • January 2015
      • February 2015
      • March 2015
      • April 2015
      • May 2015
      • June 2015
      • July 2015
      • August 2015
      • September 2015
      • October 2015
      • November 2015
      • December 2015
    • 2016
      • January 2016
      • February 2016
      • March 2016
      • April 2016
      • May 2016
      • June 2016
      • July 2016
      • August 2016
      • September 2016
      • October 2016
      • November 2016
      • December 2016
    • 2017
      • January 2017
      • February 2017
      • March 2017
      • April 2017
      • May 2017
      • June 2017
      • July 2017
      • August 2017
      • September 2017
      • October 2017
      • November 2017
      • December 2017
    • 2018
      • January 2018
      • February 2018
      • March 2018
      • April 2018
      • May 2018
      • June 2018
      • July 2018
      • August 2018
      • September 2018
      • October 2018
      • November 2018
      • December 2018
    • 2019
      • January 2019
      • February 2019
      • March 2019
      • April 2019
      • May 2019
      • June 2019
      • July 2019
      • August 2019
      • September 2019
      • October 2019
      • November 2019
      • December 2019
    • 2020
      • January 2020
      • February 2020
      • March 2020
      • April 2020
      • May 2020
      • June 2020
      • July 2020
      • August 2020
      • September 2020
      • October 2020
      • November 2020
      • December 2020
    • 2021
      • January 2021
      • February 2021
      • March 2021
      • April 2021
      • May 2021
      • June 2021
      • July 2021
      • August 2021
      • September 2021
      • October 2021
      • November 2021
      • December 2021
    • 2022
      • January 2022
      • February 2022
      • March 2022
      • April 2022
      • May 2022
      • June 2022
      • July 2022
      • August 2022
      • September 2022
      • October 2022
      • November 2022
      • December 2022
    • 2023
      • January 2023
      • February 2023
      • March 2023
      • April 2023
  • About Us
  • Contact
  • Find Us on Magzter
No Result
View All Result
Business Today
No Result
View All Result

Sampath Bank Moves Ahead Steadily to Prove its Ability to Withstand Strong Headwinds

0 0
0
Harsha Amarasekera, Chairman, Sampath Bank and Nanda Fernando, MD, Sampath Bank.

Amidst widespread economic uncertainty during 2022, Sampath Bank maintained a strong capital base and a steady liquidity profile. Proactive efforts to identify challenges and implement appropriate strategies have further reinforced the Bank’s strength and stability. The Bank has also continued to lead by example in demonstrating its commitment to the national growth agenda by promoting inward remittances and encouraging the inflow of export proceeds to the country while assisting all stakeholders to manage the current economic crisis.

The Bank reported a PAT of 7.2 billion and PBT of 9.3 billion rupees for the period ended September 30, 2022, reflecting a decline of 19.8 percent and 24.4 percent, respectively, from the figures reported for the corresponding period in 2021, which is a reflection of the current economic turmoil in the Country. As of September 30, 2022, the Group reported PAT and PBT of 7.7 billion and 10.2 billion rupees, a drop of 21.6 percent and 24.3 percent, respectively, compared to the corresponding period, 2021.

Total interest income increased by 67.7 percent YoY during the nine months ended September 30, 2022, reaching 106 billion rupees from the 63 billion rupees reported in the corresponding period of the previous year. This was primarily due to the hike in interest rates reported in 2022, which saw the AWPLR reaching 25.95 percent as of September 30, 2022, denoting a 1,953 bps increase from September 30, 2021, and 1,734 bps increase compared to the year-end 2021. Driven by the rising market interest rates, the Bank’s interest expense increased by 57.3 percent. Prudent asset and liability management ensured that net interest income increased by 79.4 percent.

During the reporting period, the Bank’s Net Fee and Commission Income (NFCI) increased substantially by 69.5 percent compared to the same period in the prior year. NFCI, which comprises revenue from numerous sources, such as loans and advances, credit cards, trade, and electronic channels, increased significantly, led by the card-related businesses and fee and commission income derived from trade-related activities.

The net other operating income for the nine months ended September 30, 2022 was 18 billion rupees. This 320 percent YoY increase was attributed to a 164.75 rupees drop in the value of the LKR against the USD. In 2022, the Bank reported a net trading loss of three billion rupees against the 98 million rupees loss reported during the previous year. Total foreign exchange income for the reporting period was 14.5 billion rupees, up from the 3.8 billion rupees recorded last year.

The Bank has recognized a total impairment charge of 48.8 billion rupees for the nine months ended September 30, 2022. This is a 396 percent increase from the 9.8 billion rupees charge reported in the previous year. Of this, the impairment charge for loans and advances amounted to 37.7 billion rupees, while 10.3 billion rupees was on account of other financial instruments. In addition, an impairment charge totaling 839 million rupees was booked against other commitments and contingencies.

To reflect the deterioration of the country’s economic environment, the Bank increased the probability weightage allocated to a worst economic scenario and revisited the EFA model, which led to the recognition of a significantly higher impairment provision during the reporting period. Industries considered under elevated risk were further expanded to capture a broader range of industry-specific stress factors. The potential impact of rising inflation, higher interest charges, and increased taxes on theretail segment were other factors that were considered in recognizing impairment provisions.

The Bank reviewed the adequacy of the impairment provision in respect of customers in tourism and other similarly affected industries, whereby necessary and adequate impairment provisions were recognized under individually significant loan impairment. The Bank also continued to recognize impairment provisions against the customers who exited the moratorium at the end of December 2021 and June 2022 as some customers have requested further concessions given the current economic outlook. In addition, steps were taken to shift customers from Stage 1 to Stage 2 based on their ability to withstand the adverse effects caused by the economic downturn.

A culmination of these efforts has ensured a higher overall provision cover of 9.8 percent at the end of September 30, 2022, deemed adequate to support the Bank in absorbing potential losses arising from severe macroeconomic conditions.

The Bank provided 9,040 million against SLISBs and 935 million rupees against SLDBs as of September 30, 2022. This decision was influenced by two
key factors- the downgrade in Sri Lanka’s sovereign rating in May 2022 to RD from C by Fitch Ratings and the current debt restructuring actions taken by the Government. The Bank’s cumulative impairment provision for SLDBs and SLISBs stood at 21.6 billion rupees at the end of the reporting period. Meanwhile, the Bank significantly reduced the exposure to FCY instruments by converting the matured SLDBs to LKR instruments during the reporting period.

Total operating income for the period increased by 40 billion. However, the impairment charge increased by 39 billion rupees, restricting net operating income growth to 3.7 percent.

Operating expenses during the reporting period amounted to 20.5 billion rupees, a 23.6 percent increase from 16.6 billion rupees recorded during last year. Rising inflation and the LKR depreciation were the main contributors to this increase. Despite the growth in operating expenses, the Bank’s cost-to-income ratio (CIR) dropped significantly by 1,460 bps and stood at 25 percent compared to the 39.6 percent reported in 2021. This drop in CIR was predominantly due to the increase in total operating income surpassing the rise in total operating costs.

Despite the 17.6 percent drop in profit before VAT, the VAT on Financial Services increased by 9.3 percent owing to the upward movement in the VAT rate from 15 to 18 percent with effect from January 1, 2022.

As of September 30, 2022, the Bank maintained all its capital ratios well above the minimum regulatory requirements. Bank’s CET 1, Tier 1, and total capital ratios on September 30, 2022, were 11.31, 11.31, and 13.72 percent, respectively, compared with 13.95, 13.95, and 17.02 percent at the end of 2021. The ratio decline during the reporting period is due to the combined impact of the increase in risk-weighted assets resulting from the LKR depreciation, cash dividends, and payment of surcharge tax.

Sampath Bank’s total assets exceeded 1.3 trillion rupees by the end of September 2022, an increase of 113 billion rupees (annualized growth of 12.6 percent) from the December 31, 2021 position of 1.2 trillion rupees. Increases in cash and cash equivalents and net loans and advances have contributed to the abovementioned growth. One of the primary causes of the balance sheet expansion can be attributed to the devaluation of the local currency during the year.

During the third quarter of 2022, the LKR deposit base grew by 44.4 billion rupees due to deposit mobilization initiatives promoted by the Bank. Nevertheless, growth in the LKR deposit base was restricted to 0.8 percent compared to the year-end of 2021.

TweetShareShare

Search

No Result
View All Result

Recent News

Is the World in a Debt Spiral?

Is the World in a Debt Spiral?

World Economic Forum: Crisis of Democratic Capitalism

World Economic Forum: Crisis of Democratic Capitalism

World Economic Forum: Crisis of Democratic Capitalism

World Economic Forum: Crisis of Democratic Capitalism

Business Today

Business Today Online, the web edition of Sri Lanka’s leading monthly corporate publication. Founded in 1996, the magazine currently has a distribution of over 6,000 copies island-wide.

Recent News

  • Is the World in a Debt Spiral?
  • World Economic Forum: Crisis of Democratic Capitalism
  • World Economic Forum: Crisis of Democratic Capitalism

Find Us

20-2/1 Lauries Place
R A De Mel Mawatha
Colombo 04
Sri Lanka
(+94 11) 259 7991
(+94) 715 134 134
(+94) 715 136 136
info@btoptions.com
btoptions.com

  • Privacy Policy
  • Terms & Conditions

© 2022 Business Today | Site by Lithic Labs

No Result
View All Result
  • Home
  • Issues
    • 2006
      • January 2006
      • February 2006
    • 2007
      • January 2007
      • February 2007
      • March 2007
      • April 2007
      • May 2007
      • June 2007
      • July 2007
      • August 2007
      • September 2007
      • October 2007
      • November 2007
      • December 2007
    • 2008
      • January 2008
      • February 2008
      • March 2008
      • April 2008
      • May 2008
      • June 2008
      • July 2008
      • August 2008
      • September 2008
      • October 2008
      • November 2008
      • December 2008
    • 2009
      • January 2009
      • February 2009
      • March 2009
      • April 2009
      • May 2009
      • June 2009
      • July 2009
      • August 2009
      • September 2009
      • October 2009
      • November 2009
      • December 2009
    • 2010
      • January 2010
      • February 2010
      • March 2010
      • April 2010
      • May 2010
      • June 2010
      • July 2010
      • August 2010
      • September 2010
      • October 2010
      • November 2010
      • December 2010
    • 2011
      • January 2011
      • February 2011
      • March 2011
      • April 2011
      • May 2011
      • June 2011
      • July 2011
      • August 2011
      • September 2011
      • October 2011
      • November 2011
      • December 2011
    • 2012
      • January 2012
      • February 2012
      • March 2012
      • April 2012
      • May 2012
      • June 2012
      • July 2012
      • August 2012
      • September 2012
      • October 2012
      • November 2012
      • December 2012
    • 2013
      • January 2013
      • February 2013
      • March 2013
      • April 2013
      • May 2013
      • June 2013
      • July 2013
      • August 2013
      • September 2013
      • October 2013
      • November 2013
      • December 2013
    • 2014
      • January 2014
      • February 2014
      • March 2014
      • April 2014
      • May 2014
      • June 2014
      • July 2014
      • August 2014
      • September 2014
      • October 2014
      • November 2014
      • December 2014
    • 2015
      • January 2015
      • February 2015
      • March 2015
      • April 2015
      • May 2015
      • June 2015
      • July 2015
      • August 2015
      • September 2015
      • October 2015
      • November 2015
      • December 2015
    • 2016
      • January 2016
      • February 2016
      • March 2016
      • April 2016
      • May 2016
      • June 2016
      • July 2016
      • August 2016
      • September 2016
      • October 2016
      • November 2016
      • December 2016
    • 2017
      • January 2017
      • February 2017
      • March 2017
      • April 2017
      • May 2017
      • June 2017
      • July 2017
      • August 2017
      • September 2017
      • October 2017
      • November 2017
      • December 2017
    • 2018
      • January 2018
      • February 2018
      • March 2018
      • April 2018
      • May 2018
      • June 2018
      • July 2018
      • August 2018
      • September 2018
      • October 2018
      • November 2018
      • December 2018
    • 2019
      • January 2019
      • February 2019
      • March 2019
      • April 2019
      • May 2019
      • June 2019
      • July 2019
      • August 2019
      • September 2019
      • October 2019
      • November 2019
      • December 2019
    • 2020
      • January 2020
      • February 2020
      • March 2020
      • April 2020
      • May 2020
      • June 2020
      • July 2020
      • August 2020
      • September 2020
      • October 2020
      • November 2020
      • December 2020
    • 2021
      • January 2021
      • February 2021
      • March 2021
      • April 2021
      • May 2021
      • June 2021
      • July 2021
      • August 2021
      • September 2021
      • October 2021
      • November 2021
      • December 2021
    • 2022
      • January 2022
      • February 2022
      • March 2022
      • April 2022
      • May 2022
      • June 2022
      • July 2022
      • August 2022
      • September 2022
      • October 2022
      • November 2022
      • December 2022
    • 2023
      • January 2023
      • February 2023
      • March 2023
      • April 2023
  • About Us
  • Contact
  • Find Us on Magzter

© 2022 Business Today | Site by Lithic Labs

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In