Sampath Bank posts Rs. 12.14 b profit after tax | Sunday Observer

Sampath Bank posts Rs. 12.14 b profit after tax

Sampath Bank recorded a Profit before Tax (PBT) of Rs 18.3 bn for the year ended December 31, 2018, up by 10.5% against Rs 16.6 bn earned in 2017 after making necessary adjustments as per the SLFRS 9 - new accounting standard. This Standard required impairment provisioning to be shifted from the “incurred credit loss” method used previously, to the more forward-looking “expected credit loss” method (ECL), which has attracted higher impairment provisions.. This is a significant achievement particularly given the challenging macroeconomic conditions that were seen right throughout the year. Profit after Tax (PAT) too, registered a marginal growth of 0.3% from Rs 12.10 bn in 2017 to Rs 12.14 bn in 2018.

Meanwhile the Sampath Bank Group also posted strong results with Group PBT and PAT for the year ended 31st December 2018 reporting Rs 19.1 Bn and Rs 12.6 Bn respectively, compared to Rs 17.5 Bn and Rs 12.7 Bn reported for the previous year.

Although SLFRS 9 was effective from 1st January 2018, the Institute of Chartered Accountants of Sri Lanka issued a Statement of Alternative Treatment (SoAT), granting the option to continue the application of LKAS- 39 for the preparation of the interim financial statements. As permitted by the above SoAT, the Bank’s quarterly financial statements for the first three quarters have been prepared based on LKAS- 39. However quarterly financial statements for the fourth quarter have been prepared applying SLFRS - 9 and hence the resultant additional provisions have been charged to the fourth quarter.

Net Interest Income (NII), which accounts for more than 70% of Sampath Bank’s total operating income touched Rs 38.1 bn in the current year, compared to Rs 28.4 Bn reported for 2017. This growth of Rs. 9.7 bn (34.2%) was supported by growth in loans and advances coupled with timely re-pricing of the asset and the liability portfolios.

The Bank shed certain large, high cost deposits during the year thanks to Tier I and Tier II capital worth approximately Rs. 33 bn raised during the last quarter of 2017 and in 2018.