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18 May, 2015 07:45 AM Source: Financial Times - Sri Lanka

Sampath Group has recorded an impressive pre-tax profit of Rs. 2,341 m, with a YoY growth of 32% for Q1 ending 31 March 2015, in the backdrop of very challenging and volatile circumstances.
The post-tax profit of the Group for Q1 2015 was Rs. 1,579 m, a growth of 23.7% as compared to Rs 1,277 m achieved in the corresponding period in 2014.
Sampath Bank, as the main entity of the Group, also achieved a significant pre-tax profit growth of 28.5% in the 1st quarter of 2015, amounting to Rs. 2,143 m compared with Rs. 1,668 m recorded in the first quarter of 2014. The post-tax profit of the bank during Q1 2015 was Rs. 1,431 m, as compared to Rs. 1,200 m achieved in the corresponding period in 2014.
“Proactive strategies adopted by the bank in driving fee based income, prudent credit control and effective assets and liability management helped to deliver these results,” Sampath Bank said in a statement.
Continuous shrinking of Net Interest Margin (NIM) very adversely impacted on the Net Interest Income (NII) of the banking industry and Sampath Bank was no exception to this trend.
Nevertheless, NII of the bank recorded a marginal increase of Rs. 79 m during the period under review from Rs. 3,968 m in Q1 2014 to Rs. 4,047 m in Q1 2015, aided by the significant expansion of the fund-base of the bank since Q1 2014.
The bank’s net fee and commission income for the quarter stood at Rs. 892 m, which was a growth of 19% compared to the first quarter of 2014. Growth of business volume such as card operations and trade related services were the main contributory factors.
Mark to market losses sustained on the existing portfolio of Treasury Bills, due to the increase in market interest rates on new Bills and drop in share prices in the Colombo Stock Exchange during the latter part of the quarter were the main reasons for the negative growth of Rs. 611 m reported in Net Trading Income.
However, the bank achieved a remarkable growth in Other Operating Income, which recorded an increase of Rs. 841 m from Rs. 401 m in the first quarter of 2014 to Rs. 1,242 m in the first quarter of 2015. The major contributory factors for this increase were exchange gains from revaluation and charges recovered.
Operating expenses of the bank which stood at Rs. 2,769 m for the first quarter of 2014 increased to Rs. 3,190 m in 2015, reflecting a growth of 15%. This was mainly due to general price increases and increase in staff numbers coupled with salary increments given to the staff members during the second quarter of the previous year. -

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