Sampath Bank strong despite challenging economic environment

Sampath Bank, despite extremely challenging economic conditions which prevailed, registered a profit before tax (PBT) of Rs. 6.5 billion and a profit after tax ( PAT) of Rs. 4.7 billion for the three months ended 31st March 2022, indicating marginal growth of 5.3 per cent and 2.9 per cent respectively from the figures reported in Q1 2021 despite having taken in a substantial impairment provision on loans and investments.

Sampath Bank recorded a total interest income of Rs. 24.9 billion in Q1 2022 compared to Rs. 20.7 billion for the corresponding period in the previous year, reflecting a 20 per cent growth year-on-year, the bank said in a media release.

Despite the interest rates hikes observed in recent months, Sampath Bank was able to benefit from lower cost of funds thanks to the higher concentration of CASA in its deposit portfolio. As a result, the bank recorded a marginal drop of 1.6 per cent in interest expenses during Q1 2022 compared to the first quarter of 2021. The bank's interest expenses for the first three months of 2022 was Rs. 11.3 billion compared to Rs. 11.5 billion reported for the same period in the previous year. Net interest income increased by 47 per cent in the first quarter of 2022 as a result of the aforementioned factors. Net interest Margin was also reported at 4.54 per cent, a healthy growth of 93 bps compared to the figures reported at the end of 2021.

The bank recognised a total impairment charge of Rs. 11.8 billion for Q1 2022 compared to Rs.1.2 billion reported in the corresponding period of last year, representing an 897 per cent increase. The impairment charge for Q1 2022 comprises Rs. 4.9 billion for loans and advances and Rs. 6.7 billion for other financial instruments. Further, an impairment charge of Rs. 209 million was recorded against commitments and contingencies.