Sampath Bank posted a profit before tax (PBT) of Rs 6.2 billion and a profit after tax (PAT) of Rs 3.4 billion for the three months ended 31st March 2024, notwithstanding an exchange loss of Rs 4.3 billion due to the appreciation of the LKR against the USD by Rs 23.70. These figures signify growth rates of 39.1% and 27.8% respectively, in comparison to the financial results reported in the first quarter of 2023. The Sampath Group also reported PBT and PAT figures of Rs 6.9 billion and Rs 3.8 billion respectively, reflecting growth rates of 38.0% and 26.0%.

Key Highlights for the Period Ended 31st March 2024:

A significant increase of 27.8% in the Bank’s PAT, reaching Rs 3.4 billion.

12.7% growth in Net Interest Income (NII).

17.1% decrease in net fee and commission income due to decreased trade-related operations.

An exchange loss of Rs 4.3 billion due to the appreciation of LKR against USD by Rs 23.70.

36.8% decline in impairment charges.

Robust LKR deposit growth of Rs 68 billion.

Tier 1 and Total Capital Adequacy Ratios stood at 15.18% and 18.22% respectively, as of 31st March 2024, comfortably above regulatory minimum requirements.

During the period, Net Interest Income (NII) reached Rs 20.5 billion, marking a growth of 12.7% compared to Rs 18.1 billion recorded in the corresponding period of the previous year. This increase in NII primarily stemmed from a reduction in interest expenses which outpaced the decrease in interest income. The Bank’s prudent asset and liability management strategies played a pivotal role in driving the notable growth of NII, especially amid declining interest rates. Additionally, the Net Interest Margin (NIM) witnessed an increase, rising from 5.16% as of 31st December 2023, to 5.24% as of the reporting date.

In 1Q 2024, the Bank experienced a significant 75.3% decrease in its total non-fund-based income, declining from Rs 2.8 billion reported in the corresponding period of last year to Rs 0.7 billion in the current period. Net fee and commission income recorded a 17.1% decrease compared to 1Q 2023, primarily due to reduced income from trade-related activities. The decline was driven by several factors including lower commission rates for import-related transactions, decreased trade volumes, and the appreciation of LKR against the USD. However, fees generated from credit, electronic channels, cards, and remittance-related activities showed growth compared to the same period last year.

The Bank reported a net trading loss of Rs 4.5 billion in 1Q 2024 whereas there was a gain of Rs 1.7 billion recognised in the previous period. This was primarily due to revaluation losses incurred on forward exchange contracts. The Bank managed to mitigate the impact of this loss through realised exchange gains reported under net other operating income as opposed to the loss of Rs 4.5 billion recorded in 1Q 2023. Consequently, the Bank’s net exchange loss from foreign exchange operations for the period under review amounted to Rs 4.3 billion, compared to the Rs 2.9 billion loss reported in the corresponding period of the previous year.

In the first quarter of 2024, the Bank reported a total impairment charge of Rs 4.4 billion, a 36.8% decrease compared to the charge for the comparative period in the previous year. Of this total, Rs 2.4 billion was attributed to loans and advances (1Q 2023: Rs 6.2 billion), while Rs 0.9 billion related to other financial instruments (1Q 2023: Rs 0.4 billion). In addition, an impairment charge of Rs 1.1 billion was recorded for commitments and contingencies (1Q 2023: Rs 0.4 billion).