Sampath Bank group recorded a net profit of Rs. 2.85 billion for the first half of 2012, up 34 percent from a year earlier, with pre-tax profits growing 42.8 percent to Rs. 4.25 billion with the banking unit contributing 97.7 percent to the profits.
"The bank’s pre-tax profit which rose to Rs. 4,150.6 Mn in the 1st H 2012, reflected an increase of Rs. 1,345.3 Mn or 48.0% over the pre-tax profit of Rs. 2,805.3 Mn for the 1st H 2011. The post –tax profit of the Bank recorded a growth of 40.4 % over the same period of last year, rising from Rs. 1,987.7 Mn in 2011 to Rs.2,789.8 Mn in 2012. The lower PAT growth rate of 34.0% at the group level was mainly due to the drop in profits of the Stock Brokering subsidiary, SC Securities Company, arising from the current situation in the Colombo Stock market," Sampath Bank group said in a statement.
"NII, which is the main source of income from the fund based operations and representing over 50% of the total operating income, rose from Rs 4,192.3 Mn in the 1st H 2011 to Rs 5,398.8Mn in the 1st H 2012, recording a significant growth of 28.8%. This increase was achieved despite the Net Interest Margin (NIM), which stood at 4.11% in the 1st H 2011, marginally dropping to 4.08% in the 1st H 2012, as a result of cost of funds increasing at a faster rate than the rise in average yield rates of both the customer advances and government securities held. Hence, this significant growth in NII was largely due to the high growth rates recorded by the bank in key business volumes, namely 30.2% in customer advances, 27.9% in total assets and 23.6% deposits during the one year period ended 30.06.2012.
"The above income, one of the the key contributory factors for the high profit growth in the 1st H2012, rose from Rs.238.3Mn in the 1st H 2011 to Rs.2,336.4 Mn in the 1st H 2012, recording a growth of Rs.2,098.1 Mn or 880.6%. This was facilitated mainly by the increase in the revaluation gains on the foreign currency reserves held in the Bank’s FCBU, as a result of sharp depreciation of Rupee against the US Dollar in 2012 ( from Rs. 113.9 as at 31st Dec 2011 to Rs. 133.90 as at 30th June 2012) and the substantial increase in the Dealing Room’s trading Profits.
"Operating expenses of the Bank which stood at Rs. 3,747 Mn in the 1st H 2011, rose to Rs. 4,458 Mn in the 1st H 2012, recording an increase of Rs. 711 Mn or 19%.
"Though, the Provision Cover recorded a marginal decline and stood at 72.85 % at the end of the 1st H 2012, due to the recoveries made against the underlining NPLs, the specific Provision Cover still remained at a higher level, compared to the industry average of 54 % on 30.06.2012. Together with the general provisions, the total Provision Coverage Ratio of the bank stood at 87.20 % as at 30.06.2012.
"Similarly, NPL Ratio too came down to 2.42% as at 30.06.2012 from 2.65% as at 31.12.2011. However, the regulatory general provision made against performing advances had to be increased due to significant credit growth recorded in the 1st half 2012.
"The provision against mark to market losses on the trading portfolio of shares and Treasury Bills also increased by Rs 214.0 Mn due to unfavorable market conditions in the 1st H 2012, as against a net gain of Rs 129.6 Mn in the 1st H 2011, which includes a reversal of an impairment provision of Rs. 275.9 Mn made against the share investment in Union Bank. This was mainly due to drop in the share prices of the companies listed in the CSE nowadays.
"The growth rates in deposits and total assets during the 1st H 2012 amounted to 12.1% and 14.5 % respectively and compared well with the industry’s growth rates of 9.3% and 13.7%, during the period. In addition, the growth rate in customer advances during the 1st H 2012 amounted to 14.1%, as against the industry average of 13.0% during the period.
"The NPL volumes net of IIS which stood at Rs 4,890.5 Mn as at 30.06.2011 were reduced to Rs 4,825.7 Mn by Rs. 64.85 Mn or 1.34% as at 30.06 .2012. Though the NPL volumes rose by Rs.145.9. Mn in the 1st H 2012, the NPL Ratio of the Bank dropped to 2.42% as at 30.06.2012, from 2.65% as at 31.12.2011, which also compared well with the industry average of 3.8% as at 30 June 2012," the banking group said.
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