Sampath Bank completes yet another successful year

Sampath Bank Ltd, which was founded in 1987, has yet again completed a successful year even under difficult and tying conditions.

Despite the unfavourable macro economic environment in the country, as evidenced by high inflation, very volatile interest and exchange rates, Sampath Bank was able to achieve a very satisfactory growth in all key business volumes, such as total deposits, total advances and total assets and record a post tax profit of Rs. 1.2 billion for the group, which amounted to a growth of 6% over the previous year. The profit growth was moderate largely due to the increase in both specific and general provisions on loan losses, necessitated by the high interest rate scenario in the country, which also pushed the NPL ratio up in the entire banking industry. In addition, as a more prudential measure loan loss provisions were made on areas such as pawning, though such provisions were not mandatory.

Reflecting on the sound business growth and judicious management of funds, Sampath Group’s total income for the year 2007 reached Rs. 18.1 Bn, achieving a growth of 40%, whereas the total interest income rose by 47.8%. The group’s profit growth was also facilitated by the contributions from its subsidiary, Sampath Centre Ltd and the Associate, LankaBangla Finance Ltd.

Total deposits of the bank grew by 23.1 % to Rs 99.4 Bn, while the gross loans and advances reached Rs. 93.4 Bn reflecting a 23% growth.

Fee and Commission income improved by 9.4% and other income increased by 23.9%. However, due to sharp rise in cost of funds resulting from the high interest scenario, Group’s operating income enhanced only by 14% to Rs 7.5 Bn for the year.

In addition, Bank’s cost to income ratio improved to 56.8% from 58% recorded during the previous year. The Group’s Tier I capital adequacy ratio stood at 7.8% and its total (Tier I & II) ratio was at 11.9%.

All financial achievements were possible through a combination of prudent management of risks and strong strategic direction and future foresight.

Apart from achieving high performance on financial terms, the bank has achieved noteworthy standards in other areas as well.
The bank was selected as the 2nd runner up at the Best Corporate Citizen Awards 2007 conducted by the Ceylon Chamber of Commerce. Furthermore, bank was adjudged the winner in the Entrepreneur Development category. As a testimony to its excellence in adhering to best business practices, the bank was placed as the winner in Banking Sector category and was runner-up in Best Capacity Builder category at the National Business Excellence Awards 2007.

By living up to its true meaning of “We Present Your Future” as an innovative bank, it won the Gold award in the financial category at the National Best Quality Software Awards for its product innovation for “Sampath Mobile Cash System”.

Having lived up to its meaning as a truly Sri Lankan brand, the brand “Sampath” was granted the “Super Brand” status, following a strict selecting process by the Super brands council.

Even though year 2007 was a difficult one and 2008 may even be more challenging, the prudent management and capitalization of opportunities have resulted in delivering and creating enhanced value to our stakeholders, Sampath Bank said.