Sampath Bank Group which comprises Sampath Bank and
four subsidiaries continued its growth momentum in 2011 1st half (1H) by
posting impressive results in all key areas year on year (YoY).
Group 1H 201l pre-tax profit grew 57.9% year on year (YoY) to Rs.
1,092 mn. with Sampath Bank contributing bulk (94.24%) of the profit, as
the Group’s main entity. Group 1H 2011 post-tax profit grew 56% YoY to
Rs. 2,131 mn. Marked improvements in the performance of all four
subsidiaries during the review period facilitated recording this higher
profit growth rate at group level in 2011.
The Bank’s Rs. 2,805 mn. pre-tax profit in 1H 201l reflected a 58.3%
YoY increase. Bank’s post-tax grew 52.7 % YoY to Rs.1, 988 mn.
Mark to market losses in 1H 2011 arising from market price
fluctuations on equity and Treasury Bill investments held by the Bank in
the trading portfolio amounted to Rs. 146.3 mn. as against a net Rs.
195.7 mn. gain from this source in the corresponding period last year.
In addition revaluation losses arising from the appreciating LKR
against the US Dollar amounted to Rs. 93.6 mn. as against a Rs. 43.5
mn. loss last year. The LKR appreciated against the US Dollar by Rs.
4.10 over the period, from Rs 113.60 as at 30.06.2010 to Rs 109.50 as at
30.06.2011.
Though the Bank realized Rs. 411.2 mn. in capital gains by selling
part of the scrip dividend shares received in 1H 2011, this was a Rs.
259.3 mn. shortfall compared to the Rs. 670.5 mn. capital gain realized
in 1H 2010 and this was partially due to the fall in the share market
value on the Dhaka Stock Exchange.
Net Interest Margin (NIM) which dropped from 5.27% in 1H 2010 to
4.11% in 1H 2011 eroded a substantial amount of Net Interest Income
(NII). This resulted in a NII drop of Rs. 73.34 mn. despite the rapid
growth recorded in the Bank’s fund based operations as reflected by the
growth rates of 24.4% and 46.5% achieved in deposits and advances
respectively during the one year period ended 30.06.2011. The NIM drop
in turn was mainly due to the return on interest earning assets falling
at a faster rate than the drop in deposit funds’ cost as a result of
changes that took place in the market’s interest rate structure.
However, the Bank is in the process of taking effective strategies to
improve NIMs in future.