Sampath Bank reaffirms its strength amid challenging economic conditions

Notwithstanding the extremely challenging economic conditions, Sampath Bank registered a profit before tax (PBT) of Rs 15 Bn and a profit after tax (PAT) of Rs 13.1 Bn for the year ended 31st December 2022.Key highlights of the financial results declared by Sampath Bank and the Group for 2022 are:

Strong Net Interest Margin (NIM) of 5.66% on the back of rising Average Weighted Prime Lending Rate (AWPLR). 235% growth in exchange income stemming from the sharp depreciation of LKR against the USD by Rs 164.75.

Sizable 69.4% increase in net fee and commission income during the year, driven by trade-related operations and card business. Additional impairment provisions on loans and investments in order to absorb potential losses.

Net Interest Income increased substantially in the year under review from Rs 41.7 Bn in 2021 to Rs 73.5 Bn in financial year (FY) 2022, reflecting a solid 76.4% growth. While interest income attributed to loans and advances declined owing to the Bank’s decision to prudently manage the lending activities in light of severe macroeconomic stress, the adverse impact of this approach was offset by the continuous upward movement in market interest rates. With AWPLR increasing rapidly throughout the year, the Bank benefited from frequent repricing of the loans and advances portfolio during 2022. Similarly, interest income from Treasury Bills and Bonds increased due to the unprecedented rate hikes in 2022 while interest income on foreign currency (FCY) loans increased substantially owing to LKR depreciation. As a result, interest income for the year 2022 reached Rs 158 Bn, denoting an increase of 83.3% over the previous year.

However, interest expenses too saw an increase as banks were compelled to increase interest rates on deposits in line with treasury bill rates during the latter part of 2022. As a result, Sampath Bank’s LKR term deposit base increased by Rs 158 Bn while the Bank’s LKR Current and Savings Account (CASA) base reduced by Rs 111 Bn during the year. Proactive and timely asset and liability management ensured that the escalation was well managed.

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