Sampath Bank records 23% decline in PAT - 3Q, 2019 | Sunday Observer

Sampath Bank records 23% decline in PAT - 3Q, 2019

10 November, 2019

In results released to the Colombo Stock Exchange on Friday, Sampath Bank announced that its Net Interest Income recorded an encouraging growth of 13.4% for the nine months ended September 30, 2019 over the figure reported for the corresponding period in 2018.

For the nine months ended September 30, 2019, the Bank reported an operating profit of Rs. 25.6 bn before impairment charges and taxes, a 5.2% increase over the same period of 2018. Nonetheless, Profit Before Tax (PBT) for the nine months ended September 30, 2019 dropped to Rs 10.4 bn from Rs 12.6 bn recorded in the corresponding period.

This decline of 17.4% is attributed mainly to higher impairment charges (an increase of 22%) and an almost 50% increase in taxes on financial services. Taxes on Financial Services for the nine months rose to Rs. 4.8 bn, including Rs. 1.6 bn on account of the debt repayment levy.

The Bank reported a Profit After Tax (PAT) of Rs. 6.5 bn, reflecting a decline of 23.5% over the corresponding period in the previous year.

The Sampath Group recorded a PBT and PAT of Rs. 10.8 bn and Rs. 6.8 bn respectively.

Interest income for the period under review increased by Rs 6.2 bn. Interest expenses for the period too increased slightly by 5.8%.

Overall, the Bank’s Net Interest Income (NII) increased by 13.4%. The Bank recorded a 223% increase in the net gains from its trading portfolio. Total operating expenses of the Bank stood at Rs. 15.3 bn.

Sampath Bank’s gross NPA ratio increased to 6.03% as at 30th September 2019.

Owing to the increase in non-performing advances, the overall impairment charge of the Bank also increased to Rs 10.3 Bn at the end of 3Q 2019.

The Bank recorded a total asset growth of 4.1% (annualized 5.5%) during the period under review, with the asset book reaching Rs 952 Bn as at 30th September 2019. Gross loans and advances grew by 5.8% (annualized 7.8%) to reach Rs 709 Bn as at September 30, 2019.

Total deposit base except deposits held by other banks increased by Rs 18 bn, to reach Rs. 708 bn as at the reporting date, a growth of 2.6% (annualized 3.5%).

Meanwhile, the CASA ratio which stood at 33.4% as at December 31, 2018 increased by 90 basis points to reach 34.3%.

As at September 30, 2019, the Statutory Liquid Asset Ratio (SLAR) for the Domestic Banking Unit and the Off-Shore Banking Unit were at 22.32% and 28.34% respectively.

However, due to the decline in the Bank’s performance during the period under review and the increase in the average equity base as a result of the rights issue in June 2019, the Return of Average Equity (ROE) (after tax) dropped from 16.02% reported as at December 31, 2018 to 9.67% as at 30th September 2019, while Return on Average Assets (ROA) (before tax) declined to 1.51% from 2.13% as at the end of 2018.