Business
Sampath Bank moves ahead steadily to prove its ability to withstand strong headwinds
Amidst widespread economic uncertainty during the year 2022, Sampath Bank maintained a strong capital base and a steady liquidity profile. Proactive efforts to identify challenges and implement appropriate strategies has allowed the Bank to further reinforce its strength and stability. The Bank has also continued to lead by example in demonstrating its commitment to the national growth agenda by promoting inward remittances and encouraging the inflow of export proceeds to the Country while assisting all stakeholders to manage the current economic crisis. CSR activities were also accelerated by undertaking multiple projects under the Bank’s flagship ‘Weweta Jeewayak’ programme in order to propel the rural economy.
The Bank reported a PAT of Rs 7.2 Bn and PBT of Rs 9.3 Bn for the period ended 30th September 2022, reflecting a decline of 19.8% and 24.4% respectively, from the figures reported for the corresponding period in 2021 which is a reflection of the current economic turmoil in the Country. As at 30th September 2022, the Group reported PAT and PBT of Rs 7.7 Bn and Rs 10.2 Bn, a drop of 21.6% and 24.3% respectively compared to the corresponding period 2021.
Key financial highlights declared by Sampath Bank for 2022:
276% growth in exchange income stemming from the sharp depreciation of LKR against USD by 82% or by Rs 164.75.Sizeable 69.5% increase in net fee and commission income during the period, driven by cards and trade-related operations.
The Bank booked Rs 48.8 Bn impairment charge on loans and investments to capture possible economic uncertainties during the year.
Fund Based Income
Total interest income increased by 67.7% YoY during the nine months ended 30th September 2022, reaching Rs 106 Bn from the Rs 63 Bn reported in the corresponding period of the previous year. This was primarily due to the hike in interest rates reported in 2022, which saw the AWPLR reaching 25.95% as at 30th September 2022, denoting a 1,953 bps increase from the 30th September 2021 and 1,734 bps increase compared to the year-end 2021. The one-year T Bill coupon rate also rose to 29.85% as at 30th September 2022, an increase of 2,284 bps against 30th September 2021.
Driven by the rising market interest rates, the Bank’s interest expense increased by 57.3% compared to the corresponding period of the last year to reach Rs 52.8 Bn for the reporting period. Prudent asset and liability management ensured that net interest income increased by 79.4%
Non-Fund based income
During the reporting period, the Bank’s Net Fee and Commission Income (NFCI) increased substantially by 69.5% compared to the same period in the prior year. NFCI, which comprises of revenue from numerous sources, such as loans and advances, credit cards, trade and electronic channels increased significantly led by the card related businesses and fee and commission income derived from trade related activities.
The net other operating income for the nine months ended 30th September 2022 was Rs 18 Bn. This 320% YoY increase was attributed to the Rs 164.75 drop in value of the LKR against USD. During 2022, the Bank reported a net trading loss of Rs 3 Bn against the Rs 98 Mn loss reported during the previous year. Total foreign exchange income for the reporting period was Rs 14.5 Bn, up from the Rs 3.8 Bn recorded during the last year.
Impairment charge
The Bank has recognised a total impairment charge of Rs 48.8 Bn for the nine months ended 30th September 2022. This is a 396% increase from the Rs 9.8 Bn charge reported in the previous year. Of this, the impairment charge for loans and advances amounted to Rs 37.7 Bn, while Rs 10.3 Bn was on account of other financial instruments. In addition, an impairment charge totalling Rs 839 Mn was booked against other commitments and contingencies.
Impairment charge on loans and advances: In order to reflect the deterioration of the country’s economic environment, the Bank increased the probability weightage allocated to a worst economic scenario and revisited the EFA model which led to the recognition of a significantly higher impairment provision during the reporting period. Industries considered under elevated risk were further expanded to capture a broader range of industry specific stress factors. The potential impact of rising inflation, higher interest charges and increase in taxes on the retail segment were some of the other factors that were considered in recognizing impairment provisions.
The Bank reviewed the adequacy of the impairment provision in respect of customers in the tourism and other similarly affected industries whereby necessary and adequate impairment provisions were recognised under individually significant loan impairment. The Bank also continued to recognise impairment provision against the customers who exited the moratorium at the end of December 2021 and June 2022 as some customers have requested further concessions given the current economic outlook. In addition, steps were taken to shift customers from Stage 1 to Stage 2 based on their ability to withstand the negative effects caused by the economic downturn.
A culmination of these efforts has ensured that a higher overall provision cover of 9.8% at the end 30th September 2022 which is deemed adequate to support the Bank to absorb potential losses arising from severe macro-economic conditions.
Impairment charge on other financial instruments: The Bank provided Rs 9,040 Mn against SLISBs and Rs 935 Mn against SLDBs as at 30th September 2022. This decision was influenced by two key factors- the downgrade in Sri Lanka’s sovereign rating in May 2022 to RD from C by Fitch Ratings and the current debt restructuring actions taken by the Government. The Bank’s cumulative impairment provision for SLDBs and SLISBs stood at Rs 21.6 Bn at the end of the reporting period. Meanwhile, the Bank was able to significantly reduce the exposure to FCY instruments by converting the matured SLDBs to LKR instruments during the reporting period.
Net operating income
Total operating income for the period increased by Rs 40 Bn. However, impairment charge too increased by Rs 39 Bn, restricting the growth of net operating income to 3.7%.
Operating expenses
Operating expenses during the reporting period amounted to Rs 20.5 Bn, a 23.6% increase from Rs 16.6 Bn recorded during the corresponding period of last year. Rising inflation and the LKR depreciation were the main contributors to this increase. Despite the growth recorded in the operating expenses, the Bank’s cost to income ratio (CIR) dropped significantly by 1,460 bps and stood at 25% compared to 39.6% reported in the corresponding period of 2021. This drop in CIR was predominantly due to the increase in total operating income surpassing the rise in total operating costs.
Tax expenses
Despite the 17.6% drop in profit before VAT, the VAT on Financial Services increased by 9.3% owing to the upward movement in the VAT rate from 15% to 18%, with effect from 1st January 2022.
The Inland Revenue (Amendment) Bill issued on 11th October 2022 has not been substantively enacted by the parliament. Therefore, the Bank has not considered the changes proposed in the Bill for the reporting period.
Key ratios
The Return on Average Shareholders’ Equity (after tax) dropped to 8.08% as at 30th September 2022 compared to 11.05% reported at the end of the year 2021. Return on Average Assets (before tax) stood at 0.96% as at 30th September 2022 as against the 1.44% reported for 2021.
Capital ratios
As at 30th September 2022, the Bank maintained all its capital ratios well above the regulatory minimum requirements. Bank’s CET 1, Tier 1 and total capital ratios on 30th September 2022 were 11.31%, 11.31%, and 13.72% respectively, in comparison with 13.95%, 13.95%, and 17.02% at the end of 2021. The decline in the ratios during the reporting period is due to the combined impact of increase in risk-weighted assets resulting from the LKR depreciation, cash dividends and payment of surcharge tax.
Assets and liabilities
Sampath Bank’s total assets exceeded Rs 1.3 Tn by end of September 2022, an increase of Rs 113 Bn (annualised growth of 12.6%) from 31st December 2021 position of Rs 1.2 Tn. Increases in cash and cash equivalents as well as net loans and advances have contributed to the aforementioned growth. One of the primary causes of the balance sheet expansion can be attributed to the devaluation of the local currency during the year.
Total advances increased by 22.6% (annualised) over the reporting period, from Rs 813 Bn at the end of December 2021 to Rs 951 Bn as of 30th September 2022. The LKR loan book increased by 12.1% (annualised). It should be mentioned that the value of loans denominated in foreign currency grew significantly after the LKR depreciated by Rs 164.75 against USD during the period. If the variations in currency rates had not occurred, the total loans and advances would have shown an increase of 8.8% (annualised).During the 3Q22, the LKR deposit base grew by Rs 44.4 Bn due to deposit mobilisation initiatives promoted by the Bank. Nevertheless, growth in LKR deposit base was restricted to 0.8% compared to year end 2021.
Business
‘With AI around, hardly anyone does any real work,’ says university don
While the corporate world celebrates the merger of efficiency and ecology, a leading academic last week issued a sobering warning: the very technology driving the next “Green Revolution” may leave the human workforce behind.
Speaking at the recently concluded Green Productivity Awards, organised by the Sri Lanka Association for the Advancement of Quality and Productivity (SLAAQP), Professor Hiran Amarasekera of the University of Sri Jayewardenepura characterised Artificial Intelligence (AI) as a “godsend” for environmental sustainability – but one that carries profound social risks.
Professor Amarasekera’s keynote address cut through the celebratory atmosphere, targeting a perceived complacency among top-tier management.
“Managers are already using AI, but many CEOs, directors and managing directors remain sceptical,” he observed. “They think AI will come in another five years. No, it is already here.”
According to the Professor, AI is no longer a futuristic concept but a functional tool currently revolutionising green metrics. He highlighted how the technology is already replacing manual monitoring for energy optimisation, using predictive algorithms to drastically reduce industrial waste, and automating sustainability reporting – turning months of consumption data analysis into a task of mere seconds.
While these advancements provide a massive boost to the “bottom line” and help organisations meet the national Net Zero pledge, Prof. Amarasekera warned of a looming “danger”: the displacement of human workers.
“AI is boosting productivity while cutting back the need for human resources. What will happen to the jobs and the wider society? Not even the USA or other advanced economies have an answer to this,” he noted.
In a moment that elicited both laughter and reflection from the audience, he touched upon the irony of modern higher education: “Students produce their work through AI and we detect plagiarism through AI. So, with AI around, hardly anyone does any real work!”
The technological warning was balanced by the moral urgency of Senior Professor Ajith de Alwis from the University of Moratuwa. Invoking the words of David Attenborough, Prof. de Alwis asked the audience how they would look into the eyes of their grandchildren if they knew of the world’s collapse and did nothing.
The takeaway message of the evening was clear: While AI provides the tools to save the planet, human leadership remains the only force capable of managing the social consequences of that salvation.
Despite the warnings of future challenges, the SLAAQP awards proved that Sri Lankan industries are currently making notable strides. The event recognised 38 organisations – including 28 Gold Award winners – across sectors ranging from plantation, garments and rubber to poultry and textiles.
These winners were evaluated on four critical pillars: Leadership, Environmental Sustainability, Productivity Enhancement and Social Contribution.
By Sanath Nanayakkare
Business
Gemological Report of Ceylon sets new global benchmark for local gemstone certification
Steps into a critical void to earn recognition in international markets
For decades, Sri Lanka has been globally revered as the “Island of Gems,” yet the industry has long grappled with a paradoxical challenge: while the Sri Lankan soil yields the world’s finest stones, the local certification process has often struggled to command the same recognition in international markets.
Stepping into this critical void is the Gemological Report of Ceylon (GRC). Located at No. 97, Galle Road, Colombo 3, this newly launched laboratory is on a mission to redefine the standards of local gem certification, ensuring that the “fatherhood” of Sri Lankan gemstones remains firmly within its home soil.
Founded by Milinda Edirisinghe, a seasoned gemologist with over 20 years of experience in mining, trading, and geological study, GRC is the result of a lifelong observation of the industry’s “trust gap.”
“I saw a critical disparity,” says Edirisinghe, who received specialised training in Thailand, the global hub for gemstone treatments. “Sri Lankan exporters often face unfair skepticism in markets like Thailand, Hong Kong, and the US. International buyers often view local reports with doubt. I launched GRC to provide a local institute that is on par with the highest-caliber laboratories in the world.”
He made these comments while speaking to media at the new laboratory.
According to him, in its first month of operation, GRC has already seen a surge in demand, processing 30 to 40 stones daily – a success driven largely by its word-of-mouth reputation.

Milinda Edirisinghe performs a sensory inspection of a gemstone using a loupe to assess its initial characteristics
“The lab’s rapid growth is built on a foundation of total transparency. Unlike traditional setups, GRC employs a rigorous triple-blind screening process: three independent gemologists evaluate each specimen – from Sapphires, Ruby and Emeralds to semi-precious stones, polycrystals, rare meteorites, and even organic materials like natural Pearls, and rare coral species etc., used in high-end jewelry. By evaluating the stones without consulting one another, the three gemologists’ independent findings are then synthesised into a final, authoritative and error-free assessment,” he explained.
“As gemstone treatments become increasingly sophisticated – ranging from Beryllium diffusion to evolving heat and irradiation treatments – the need for advanced technology is paramount. GRC’s facility is equipped to identify the full spectrum of enhancements, ensuring the end consumer knows the exact “human intervention” history of their asset,” he further said.
However, Edirisinghe maintains that technology is a tool, not a replacement. When asked if AI could eventually handle the certification job alone, he noted:
“AI already assists our workflow to an extent, but a human gemologist remains an indispensable part of the process. Just as a surgeon uses advanced technology to enhance precision, they must still be present to execute the nuances of a complex operation. AI cannot truly ‘see,’ touch, or feel the soul of a stone.”
He further added, “AI can support our findings, but it cannot replace the gemologist’s ‘eye-view’ and the tactile senses that go a long way in issuing an accurate certification.”
Furthermore, GRC leverages an international expert network. “If we encounter a complex inclusion, we utilize virtual screen-sharing with leading labs in Thailand for real-time peer review,” Edirisinghe explains. “Our conclusions are science-based facts, not just opinions.”
Beyond technical excellence, GRC serves a vital economic purpose. Historically, local dealers spent thousands of dollars obtaining international certificates. GRC offers these world-class reports at a fraction of the cost, with detailed certificates starting from LKR 15,000 for full reports, a medium report at LKR 6,000, “memo cards” at LKR 1,500, and verbal opinions for LKR 500.
“By providing a credible, globally-recognised home-based laboratory, we are stemming the outflow of foreign currency to international labs,” said Edirisinghe.
With plans to participate in upcoming exhibitions in Dubai, Hong Kong, and the USA, GRC is positioning itself as a global contender. As the industry shifts toward “knowledgeable customers” who view jewellery as a liquid asset, GRC stands ready to provide the clarity and integrity the Sri Lankan gem industry deserves.
“If Sri Lanka produces the best stones in the world, it is only right that we also provide the world-class expertise to certify them. Our mission is to ensure that the ‘fatherhood’ of these precious stones remains in Sri Lanka, backed by a certificate that is respected from the USA to the European Union,” Edirisinghe said in conclusion.
By Sanath Nanayakkare
Business
Ministry of Brands to launch Sri Lanka’s first off-price retail destination
Sri Lanka’s retail landscape will reach a major milestone with the launch of Ministry of Brands (MOB), the country’s first off-price retailer. The flagship store is set to open on 16 February 2026, introducing Sri Lankan consumers to authentic global luxury and premium brands at discounts of up to 90% off original retail prices.
Backed by Akbar Brothers, Ministry of Brands brings the globally established off-price model to South Asia for the first time. The concept allows customers to shop for genuine designer and brand-name products at significantly reduced prices while supporting more sustainable retail practices.
The 10,000 sq. ft. flagship store, located at 28/9, Vajira Road, R.A. De Mel Mawatha, Colombo 4, will feature an extensive range across apparel, footwear, handbags, accessories, homeware, and more. Ministry of Brands will carry over 2,000 international and designer brands spanning womenswear, menswear, childrenswear, home, and accessories, including names such as Gucci, Ferragamo, Valentino, Michael Kors, Ralph Lauren, Burberry, Rag & Bone, Lacoste, Puma, UGG, HOKA, Brooks, Air Jordan, and many more.
Off-price retail is one of the fastest-growing global retail segments, helping fashion houses responsibly manage excess inventory. With the UN Environment Programme estimating 92 million tonnes of textile waste generated annually, sustainable retail models such as off-price are increasingly important.
“Sri Lanka manufactures for many of the world’s leading designer labels, yet these products have often remained out of reach for local consumers,” said Director of Ministry of Brands, Aamir Akbarally. “Through off-price retail, we are proud to make genuine designer brands more accessible to our fellow Sri Lankans, offering premium fashion at affordable prices while delivering a world-class shopping experience built on Akbar Brothers’ longstanding values of integrity, quality, and trust.”
Ministry of Brands Director, Ramzey Hammoud added: “With decades of experience in off-price retail, we see this as an exciting new growth chapter for Sri Lanka’s retail landscape. Our goal is simple: to allow customers to shop global designer brands locally at the best prices, while rediscovering the thrill of the find through a constantly changing, treasure-hunt shopping experience.”
Following the Colombo flagship launch, Ministry of Brands will open a second location at the One Galle Face Mall, with plans to expand across South Asia and Australia.
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