Sampath Bank recorded a profit before tax (PBT) of Rs 6.1 billion in 1Q 2021 compared to Rs 3 bn in 1Q 2020, denoting a growth of 101%, while Profit after tax (PAT) increased by 83% to Rs 4.6 bn from Rs 2.5 bn recorded in the first quarter of 2020. Resilient performance of all business lines along with the improved credit quality helped bolster Sampath Bank’s performance in the first quarter of 2021.
The Sampath Group also registered significant growth in 1Q, 2021, as evinced by the improvement in both PAT and PBT in the first quarter of the year. The Group reported Rs 5.1 bn PAT and a Rs 6.7 bn PBT, a growth of 90.7% and 103.5%, compared to the figures reported for the corresponding period in the previous year.
Net interest income (NII) declined by 7.7% during the period under review to Rs 9.2 bn from Rs 9.9 bn recorded in the corresponding period in 2020. The drop in the NII is attributed to the prevailing low interest rate environment. However, the Bank continues to proactively monitor all variables that are likely to impact the NII to ensure a sustainable return.
Overall, interest income for the period under review decreased by Rs 3.8 bn to Rs 20.7 bn compared to Rs 24.5 bn recorded for the corresponding period in 2020, a decline of 15.4%. During the first quarter of 2021, the Bank registered Rs 11.5 bn in interest expenses which was a 20.7% decline against the corresponding period in 2020. The Bank’s NFBI comprises credit, trade as well as card and electronic channelrelated fees and commissions.
Driven by higher business volumes in these areas, NFBI for the quarter under review grew to Rs 2.6 Bn, a 15.8% increase compared to Rs 2.2 bn recorded in 1Q, 2020.
Net other operating income grew by 16.9% during the period under review, led by an increase in realized exchange income which is attributed to a 7.3% depreciation of the Sri Lankan Rupee against the US Dollar. Benefitting from the Rupee depreciation, net other operating income for the first three months of 2021 increased to Rs 2.7 Bn, compared to Rs 2.3 bn reported during the corresponding period in 2020. On the other hand,due to the aforementioned currency depreciation, the Bank incurred a net trading loss of Rs 335 mn due to mark-to-market losses on forward exchange contracts. Accordingly, the Bank’s net exchange income from foreign exchange transactions amounted to Rs 2.3 bn for the period under review.
The Bank’s total operating expenses, which amounted to Rs 5.1 bn in 1Q 2020, increased by 6.9% to Rs 5.5 bn in 1Q 2021. Higher personnel expenses mainly contributed towards this increase. However, thanks to stringent cost containment strategies, other expenses decreased by 6.4% in 1Q2021 compared to the corresponding period in 2020.