The Sampath group recorded half-year growth in profitability with a pre-tax profit of Rs.4.7 billion, an increase of 32 percent over the previous year’s first half pre-tax profit of Rs.3.6 billion. 

The profit after-tax for the half year ended June 30, 2015 stood at Rs.3.2 billion, which is an increase of 13.8 percent over the corresponding period in 2014.  
The bank, the main entity of the group, too recorded a profit before tax of Rs.4.4 billion, compared to Rs.3.4 billion recorded in the corresponding period of 2014, which is an increase of 30.3 percent. 

The bank’s post–tax profit for the six months ended June 30, 2015 also rose by 11.8 percent, from Rs.2.7 billion in 2014 to Rs.2.9 billion 
in 2015. 

A lower growth rate in post-tax profits, both at the group and bank levels than that in pre-tax profits, arose  due to reversal of certain tax over provisions of previous years, upon  finalization of  the respective tax returns in the 1H14.  



Net interest income 
The net interest income (NII) increased from Rs.7.8 billion in the 1H 14 to Rs.8.5 billion in the 1H15, registering a moderate growth of Rs.729 million (9.4 percent). 

This growth in NII was achieved despite the interest margin shrinking from 4.07 percent in the 1H14 to 3.8 percent in the 1H15, as a result of the growth in the fund-based operations of the bank.  
However, timely re-pricing measures taken by the ALCO, the bank’s success in minimizing the NPLs and improvement in the CASA ratio, helped to maintain the net interest margins (NIM) at current levels.   



Net fee and commission income 
The bank’s net fee and commission income for the 1H15 stood at Rs.2.8 billion, which was a growth of 26 percent. Increase in business volume from operations such as credit card and debit cards, trade-related services and other banking services contributed to this growth.



Other operating income 
Other operating income too recorded an impressive growth of 156 percent and stood at Rs.1.3 billion in the 1H15 compared to Rs.0.5 billion recorded in the corresponding period of 2014. 

The major contributory factors for this increase were realized exchange income and income from currency notes operations. 



Operating expenses
The operating expenses of the bank increased from Rs.5.6 billion in the 1H14 to Rs.6.6 billion during the period under review, reflecting a growth of 17 percent. 

This was due to general price increases, business promotional campaigns, credit card-related expenses and salary increments given to the staff members during the period under review. 



Impairment loss on loans and receivable
Reduction in provisions against the gold loans (pawning) in 2015 was the main reason for the reduction in collective impairment charge by Rs.578 million during the period under review, compared to the corresponding period in 2014. The bank’s total pawning advances as at June 30, 2015 was only 5.1 percent of the total advances.   



Business growth 
Total deposits recorded a growth of 6.3 percent from Rs.342 billion as at December 31, 2014 to Rs.364 billion as at June 30, 2015. 

Despite the drop in pawning advances by Rs.7.3 billion during the period, the bank’s total gross advances increased by Rs.29 billion or 9 percent,  from Rs.311 billion as at December 31, 2014 to Rs.340 billion,  at the end of 1H15. 

Total assets stood at Rs.461 billion as at June 30, 2015, reflecting a growth of 6.7 percent against the total assets as at December 31, 2014.  



Performance ratios 
ROE (after tax) for the six months ended June 30, 2015 stood at 19 percent reflecting a marginal growth compared to the corresponding period’s 18.77 percent.  

ROA (after tax) for the six months ended June 30, 2015 stood at 1.34 percent. Earnings per share too reported an increase in the 1H15 and remained at Rs.17.38, compared to Rs.15.56 for the corresponding period of 2014. 

Similarly, the NPL ratio (net of interest in suspense) also showed an improvement from 1.93 percent as at 31.12.2014 to 1.71 percent as at 30.06.2015
Capital adequacy ratios 

Although the Tier I and Total capital adequacy ratios have marginally reduced by 0.36 percent and 0.75 percent, respectively compared to December 31, 2014, mainly due to the credit growth mentioned above and the cash dividend paid in April 2015, the bank managed to maintain its capital adequacy ratios, Tier I (8.47 percent) and Total (12.87 percent), well above the minimum regulatory requirements of 5 percent and 10 percent, respectively at the end of 1H15.  The bank continued to adopt a policy of leveraging its capital to an optimum level but will ensure to maintain a capital buffer adequate enough to support its future business expansion and risk profile.