Taxes hit Sri Lanka’s Sampath Bank Sept profits

ECONOMYNEXT- Net profits at Sri Lanka’s Sampath Bank for the September quarter fell 0.7 percent to 2.6 billion rupees with taxes eating into the bottom line, interim financials showed.

Sampath Bank, one of the three largest private banks in Sri Lanka by assets, posted 6.81 rupees in earnings per share at group-level. For the first nine months of 2019, the group made 20.80 rupees in earnings per share.

The Sampath Bank share closed at 165.10 rupees on Thursday.

Group interest income in the September quarter grew 7.2 percent from a year earlier to 28.2 billion rupees, while interest expenses rose as a slower 1.6 percent to 16.3 billion rupees, resulting in net interest income growing at a faster 16.1 percent to 11.9 billion rupees.

Net fee and commission income grew 2.9 percent to 2.7 billion rupees. Net losses from trading fell 64.2 percent to 442.1 million rupees.

Bad loan provisioning fell 22.4 percent to 3.4 billion rupees.

Bank-level bad loans were up to 6.03 percent at end-September from 3.69 percent at end-December.

The group profits before financial and income taxes were up 35 percent to 6.9 billion rupees. The new debt repayment levy and income tax reduced profits.

The loan book grew 5.1 percent to 712.2 billion rupees from December 2018 to September 2019. Net assets per share fell 13 percent to 278.91 rupees following a rights issue.

Deposits were up 3.2 percent to 721.8 billion rupees.

The group core capital to risk weighted assets ratio grew to 13.74 percent from 12.13 percent over the nine months, against a minimum requirement of 10 percent.

Total capital ratio grew to 17.62 percent from 15.69 percent against a required 14 percent.

The bank’s return on assets fell to 1.27 percent from 2.13 percent over the nine months, while return on equity fell to 9.26 percent from 16.02 percent.

Sampath Bank raised capital through both a rights issue and debentures. (Colombo/Nov08/2019)