Sampath Bank posts Rs. 11 bn PAT for 1H 2024 with 45% increase
Sampath Bank registered a profit before tax (PBT) of Rs 18.5 billion and a profit after tax (PAT) of Rs 11.1 billion for 1H 2024 reflecting growth rates of 40% and 45% respectively compared to the corresponding period of the previous year.
The Sampath Group also reported PBT and PAT figures of Rs 19.7 billion and Rs 11.9 billion respectively, reflecting growth rates of 47% and 55%. During the first half of 2024, the Bank reported a total interest income of Rs 95 billion, a 5.7% decline from the same period of the previous year, primarily attributable to a decreasing AWPLR.
The continuous decline in market interest rates resulted in the interest expense for the period decreasing from Rs. 67 billion in 1H 2023 to Rs. 54 billion in 1H 2024.
This substantial decrease in interest expense, outpacing the decline in interest income, resulted in a notable 20.3% increase in Net Interest Income (NII), reaching Rs. 41 Bn for 1H 2024.
The Bank’s strategic management of assets and liabilities significantly contributed to the impressive growth in Net Interest Income (NII), particularly in the context of declining interest rates. The Net Interest Margin (NIM) experienced a slight increase, rising from 5.16% as of December 31, 2023, to 5.18% as of the reporting date.
In 1H 2024, the Bank’s Net fee and commission income amounted to Rs 8.7 billion, reflecting a 11% decline compared to the previous period, primarily due to reduced income from trade-related activities.
The decrease in trade-related income is mainly attributed to reduced commission rates on import transactions and the impact of LKR appreciation. In 1H 2024, the Bank reported a net trading loss of Rs. 2.4 billion, compared to a gain of Rs. 1.7 billion in the previous period.
Conversely, Net other operating income for the period stood at Rs 151 Mn, a significant improvement compared to the loss of Rs 5.1 billion in the previous period.
This improvement was largely driven by a decrease in exchange losses as the LKR appreciated at a lower rate of 5.5% during the reporting period, compared to a 15.8% appreciation in 1H 2023.
The Bank recorded a total impairment charge of Rs 6.2 billion for the first half of 2024, 14.6% less than the charge for the 1H 2023. Of this total, Rs 3.7 billion was attributed to loans and advances (1H 2023: Rs 8.7 billion), while Rs 1billion was related to other financial instruments (1H 2023: a reversal of Rs 1.4 2 billion). Additionally, an impairment charge of Rs 1.5 billion was recorded against credit-related commitments and contingencies (1H 2023: a reversal of Rs 66 million). During the reporting period, the Bank experienced a 58% decrease in the impairment charge on loans and advances.
The Bank recorded a net impairment charge of Rs 1 Bn against other financial instruments during the period, primarily due to the recognition of an additional charge against Sri Lanka International Sovereign Bonds (SLISB) in 1Q 2024.
During the reporting period, operating expenses increased by 11.2% compared to the corresponding period in 2023. The rise in personnel costs by 22.5% was primarily due to annual salary increments. The Bank’s total effective tax rate decreased to 53.8% in the first half of 2024, down from 55.9% reported in the corresponding period in 2023. As of 30th June 2024, the Return on Average Shareholders’ Equity (after tax) increased to 14.9%, up from 12.7% as of 31st December 2023.
During the reporting period, Sampath Bank maintained all its capital and liquidity ratios comfortably above regulatory minimum requirements. As of June 30, 2024, the Bank’s asset base expanded by 6.4%, representing an annualized growth of 12.9%, reaching Rs 1.64 Tn.
Total liabilities increased by 6.7% (annualized growth of 13.5%), primarily due to the expansion of the Bank’s total deposit portfolio by Rs 89 billion, from Rs 1,264.5 billion at the end of 2023 to Rs 1,353.2 Bn as of June 302024.
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