Sampath Bank PLC, Sri Lanka’s third largest private lender in terms of assets, saw its June quarter (2Q23) earnings soaring amid a sharp decline in impairment charges, the interim financial accounts released to the Colombo Stock Exchange showed.The banking group reported earnings of Rs.3.95 per share or Rs.4.6 billion for the quarter under review, compared to earnings of Rs.2.15 per share or Rs.2.5 billion reported for the corresponding period of the previous year.
For the first half of 2023 (1H23), the banking group reported earnings of Rs.6.51 per share or Rs.7.6 billion, compared to earnings of Rs.6.28 per share or Rs.7.3 billion reported for the same period, last year.
For 1Q23, the banking group reported a net interest income of Rs.16.6 billion, down 9.7 percent year-on-year (YoY), as the rise in interest expenses surpassed the increase in interest income.
The net interest margin reported for the first half stood at 5.19 percent, down 51 basis points from the end of 2022.
The net fee and commission income for the period was Rs.4.5 billion, up 8 percent YoY.
The total operating income for the period was Rs.20.6 billion, down 26.6 percent YoY.
The impairment charges for the period plunged to just Rs.382.1 million, from Rs.16.4 billion a year ago.
As a result, the net operating income rose 74 percent YoY to Rs.20.2 billion.
The total operating income of the group rose 20.6 percent YoY to Rs.9.2 billion during the quarter under review.
Sampath Bank’s loan book recorded a degrowth of 3.7 percent to Rs.781.2 billion in the first half, compared to the end of 2022.
The bank’s stage 3 loan ratio stood at 5.49 percent as at June 30, 2023, compared to 4.35 percent at the end of 2020, indicating a deterioration in asset quality.
The total assets of the banking group as at June 20, 2023 stood at Rs.1.46 trillion, up 7.3 percent six months ago.
The bank said the additional investment made in Treasury bills during the latter part of the reporting period resulted in the growth in assets.
The bank’s deposit base during the first half improved 3.9 percent to Rs.1.13 trillion.
Sampath Bank’s capital adequacy ratios improved in 2Q23, compared to 1Q23.
As at June 30, 2023, Sampath Bank’s CET 1, Tier 1 and total capital ratios were at 13.89 percent, 13.89 percent and 17.36 percent, compared to 11.92 percent, 11.92 percent and 14.27 percent, respectively at the end of 2022.
These increases can be attributed Rs.10 billion worth of Tier 2 capital infusion in February 2023, profit generated in 2023 and a decline in risk weighted assets, resulting from the rupee appreciation.
Billionaire businessman Dhammika Perera has a 14.95 percent stake in Sampath Bank while the Employees’ Provident Fund has a 9.97 percent stake, as the third largest single shareholder of the bank.
