Business

Sampath Bank to expand its lending activities as economy rebounds

Published

5 years ago

2021/09/23

Samath Bank’s adequate capital buffer may enable it to sail through the tough times and help in boosting the credit growth in the near term when the economic activity recovers to a greater extent, First Capital Research said yesterday.

Elaborating on Sampath Bank’s capital buffer in a report titled, ‘Robust show despite nagging macro pressures’, First Capital said, ” Sampath Bank’s earnings increased by 83% YoY in the 2Q2021 to LKR 2.4bn while the surge was attributed to the rise in total operating income by 38.4% to LKR 14.7 bn despite the increase in impairment by 50.1%YoY to LKR 4.3 bn.”

“Total operating income was led by the improvement in NII, Net Fee and Commission and Net Other Operating Income. Considering the strong performance in 1Q and 2Q of 2021, we maintain the earnings forecast of Sampath for 2021 at LKR 13.7bn (+62%YoY) and 2022 at LKR 16.5bn (21%YoY). With the strong capital buffer, we expect Sampath’s lending portfolio to grow with the gradual resumption of economic activities while margins to enhance amidst the potential rise in interest rates.”

The report further said: “However, taking into consideration the higher risk-free rate applicable for valuations, with the potential rise in interest rates, we have downgraded Sampath’s fair value for 2021 to LKR 62.0 (from previous LKR 68.0) and 2022 to LKR 73.0 (from previous LKR 80.0).”

“Sampath’s’s net interest income for 2Q2021 was LKR 10.9bn reflecting an increase of 34.1%YoY, led by the decrease recorded in interest expenses as a result of timely re-pricing of liability products despite a decline in interest income by 0.5%YoY owing to low interest rate regime. Net fee and commission income comprises of income from various sources such as credit cards, trade, and electronic channels while the growth in this segment was driven mainly by higher engagements in card-related activities.”

“Net other operating income grew by 173.8%YoY backed by the increase in realized exchange income stemming from the 1.1% depreciation of the LKR against the USD reported during 2Q2021. We estimate NII and Net fee and commission income to grow by 12%YoY and 10%YoY to LKR 41.3bn and to LKR 9.9bn for 2021 respectively.”

“Impairment rose by 50.1%YoY for 2Q2021 as a result of prudent provisioning for risk categories. Credit granted for 1H2021 amounted to LKR 30.0bn with 4.1%YTD growth mainly driven by term loans, pawning & gold loans and overdrafts although loan book growth was relatively lesser compared to the private sector credit (which grew by nearly 6.7% during 1H2021) as a result of Sampath’s conservative nature in lending. Sampath provided LKR 4.3Bn in 2Q2021 as the impairment, up by 50%YoY, relative to 2Q2020 on the back of additional provisions taken despite signs of an economic recovery apparent in 1Q202.”

“Following a reassessment of the impairment assumptions, SAMP decided to apply a more prudent approach in 2Q2021, in light of the evolving impact of COVID 19 third wave and the extension of the moratorium framework. Accordingly, we have estimated an impairment of LKR 11.6bn (-12%YoY) for 2021 and LKR

10.0Bn (-14%YoY) for 2022.”

Well above capital ratios will boost lending portfolio when the economic activities improve

As at 30th Jun 2021, SAMP’s Tier I and Total Capital Adequacy Ratios stand at 12.5% and 15.7% respectively which are well above the minimum regulatory requirement of 8.0% and 12.0%,” First Capital said.

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Business

Oil prices hit $100 for the first time since May

Published

17 hours ago

2026/07/24

Priyan

Oil prices hit $100 a barrel for the first time since May as the escalating conflict in the Middle East reignited fears over global energy supplies.

Brent crude – the global benchmark for oil prices – rose more than 6% on Thursday following several days of increases as the US stepped up military strikes against Iran.

Prices spiked after Houthi militia in Yemen attacked oil tankers in the Red Sea, threatening a key export route that Saudi Arabia has used to bypass the Strait of Hormuz.

Gas prices have also risen steadily over the past month, with the benchmark UK gas price currently at around 150 per therm, up from around 98p at the end of June.

Oil prices had been falling following a temporary ceasefire between the US and Iran.

They dropped back to levels last seen before the US and Israel began military action against Iran on 28 February.

However, the ceasefire has failed and this week US Secretary of State Marco Rubio said the people in charge in Iran were “not ready to make a deal”.

The ongoing conflict risks pushing up inflation for many countries, including UK and the US leading to higher prices for consumers.

Higher oil prices typically lead to petrol and diesel becoming more expensive.

While drivers are affected directly, households could also see prices of other goods, such as food, increase due to businesses passing on higher transportation costs to customers.

Inflation has fallen both in the UK – down to 2.6% in the year to June helped by slowing diesel and petrol prices – and in the US to 3.5%.

But questions remain whether the slow down will prove short lived due to the renewed conflict in the Middle East.

New data released on Thursday showed that UK petrol prices have risen by 5p a litre since the beginning of July, hitting reaching almost £1.56.

Diesel is at £1.72 a litre, on average, according to the RAC.

Average gasoline prices in the US have surpassed $4 a gallon once more, up from $3.92 a month ago, according to motorist advocacy group AAA.

“More expensive fuel and energy can ripple through the wider economy, increasing costs for businesses and ultimately feeding through into the price of food and other goods,” said Jonathan Raymond, investment manager at Quilter Cheviot.

“This creates another headache for central banks as they continue their battle against inflation.

“If energy prices remain elevated, policymakers may come under pressure to keep interest rates higher for longer or even raise them. This would come as a blow to mortgage holders and borrowers already feeling the strain.”

The Bank of England, which sets UK interest rates, has held them at 3.75% in its last four meetings.

Paul Dales, chief UK economist at Capital Economics, said he believed the Bank will “almost certainly” hold them again. But he said analysts still expected that interest rates could be cut next year if energy price rises ease.

Kevin Warsh, the newly-appointed chair of the US Federal Reserve, last week told Congress that the central bank had “no tolerance to persistently elevated inflation”.

US President Donald Trump had pushed Warsh’s predecessor, Jerome Powell, to cut interest rates.

Trump has made it clear he expects Warsh to fulfil his demand for reductions in borrowing costs for Americans.

But the Fed held US interest rates between 3.5% and 3.75% at Warsh’s first meeting last month. He also told Congress that he was committed to “restoring price stability” in the wake of the Middle East conflict impacting prices.

[BBC]

Business

SEC, CSE and CA Sri Lanka sign MOU to advance XBRL-based digital reporting for listed companies

Published

24 hours ago

2026/07/24

Thilina Walpola

The signing ceremony at SEC from Left to right: Ms. Manuri Weerasinghe| Director Corporate Affairs, SEC, Tushara Jayaratne | Acting Director General, SEC, Ms. Nilupa Perera | Chief Regulatory Officer, CSE, Rajeeva Bandaranaike | Chief Executive Officer CSE, Senior Prof. D.B.P.H. Dissabandara,| Chairman, SEC, Tishan Subasinghe | President, CA Sri Lanka, Ms. Anoji de Silva | Vice President, CA Sri Lanka, Neranjith Gamage | Commission Member, SEC, Ms. Lakmali Priyangika | Chief Executive Officer, CA Sri Lanka, Ms. Rishdha Zarook Ishaq | Director Legal and Enforcement, SEC , Ms. Kumuduni Maduwanthi |Senior Manager Legal, CA Sri Lanka.

The Securities and Exchange Commission of Sri Lanka (SEC), Colombo Stock Exchange (CSE), and the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) signed a Memorandum of Understanding (MoU) to collaborate on the implementation of eXtensible Business Reporting Language (XBRL) based reporting for companies listed on the CSE.

The agreement marks a significant milestone in Sri Lanka’s efforts to modernise corporate reporting and strengthen the digital infrastructure of the capital market. The initiative aims to streamline the submission of both financial and non-financial information by listed entities, enhancing transparency, accessibility and investor confidence.

The MoU formalises the partnership, following the establishment of a joint SEC-CSE committee tasked with driving the initiative. With the in-principle approval of the SEC, the committee has been working closely with CA Sri Lanka to develop the framework required for the successful rollout.

XBRL is the internationally recognised standard for digital business reporting, developed and maintained by XBRL International, a global non-profit consortium. The standard enables financial and business information to be reported in a structured, machine-readable format, facilitating more efficient analysis, comparison and interpretation of corporate disclosures by regulators, investors, analysts and other stakeholders.

The introduction of XBRL reporting is expected to deliver several key benefits for both listed companies and users of financial information. These include reducing reliance on manual data processing, improving the accuracy and consistency of reported information, supporting more advanced data analysis, and lowering long-term reporting costs. The flexibility of the XBRL framework also allows organisations to tailor taxonomies to meet specific reporting requirements. In addition, XBRL adoption will enhance market transparency and efficiency by enabling quicker access to comparable corporate information. It will also align Sri Lanka’s reporting framework with global standards, making the country’s capital market more accessible and attractive to international investors familiar with XBRL-based financial reporting.

Business

LOLC Insurance and Seylan Bank celebrate Bancassurance Excellence through “League of Greatness” 2025

Published

24 hours ago

2026/07/24

Thilina Walpola

The Achievers of the Night

LOLC Insurance recently hosted the “LOLC Insurance – Seylan Bancassurance Felicitation Night 2025” under the theme “League of Greatness,” celebrating the success of its longstanding bancassurance partnership with Seylan Bank. The event marked another milestone in a strategic collaboration that has continued to grow since 2013.

The felicitation ceremony brought together senior management, sales leadership, branch representatives, and top-performing teams from both organisations to recognise excellence, appreciate contributions, and reaffirm the enduring partnership between LOLC Insurance and Seylan Bank. The collaboration currently spans 104 Seylan Bank branches across Sri Lanka, delivering accessible life and general insurance solutions islandwide.

Speaking at the event, Ramesh Jayasekara, Director/Chief Executive Officer, Seylan Bank PLC, stated, “Our partnership with LOLC Insurance continues to create meaningful value for customers while further strengthening the bancassurance proposition within the banking sector. The dedication and collaborative spirit demonstrated by both teams have been instrumental in achieving these milestones and sustaining the growth of this partnership. We look forward to enhancing our collaboration and delivering greater value to customers in the years ahead.”

Sharing insights during the event, Eugene Seneviratne, Deputy General Manager – Retail Banking, Seylan Bank, added, “The professionalism and operational efficiency demonstrated by the bancassurance teams have been instrumental in consolidating this partnership. Our branch teams continue to seamlessly manage day-to-day bancassurance functions with minimal operational escalations, reflecting the strength of a well-structured and highly efficient framework. This has contributed to a smooth and mutually beneficial working relationship, enabling the partnership to enhance coordination, execution, and overall performance.”

Addressing the gathering, Kithsiri Gunawardena, Chairman/Principal Officer of LOLC General Insurance and Director of LOLC Life Assurance, stated, “Successful partnerships are built on trust, shared values, and a common vision. The strength and longevity of this collaboration reflect the commitment of both organisations to delivering meaningful impact to customers while advancing the country’s bancassurance sector. The positive feedback and appreciation consistently received from Seylan Bank regarding the quality of service delivered and the steadfast support extended by the teams stand as a testament to the professionalism and service excellence upheld throughout the partnership.”