Seylan Bank records Rs. 1.5bn PAT for 1H 2022 – The Island

Sampath Bank continued to maintain a strong capital base and a stable liquidity profile in the first half of 2022 despite multiple economic challenges. The Bank remains vigilant in identifying current economic challenges and has continued to proactively implement the required countermeasures, clearly demonstrating its solidity and stability.

In line with this objective and in order to improve the foreign exchange liquidity position, the Bank continues to concentrate and promote inward remittances as well as encourage the inflow of export earnings. The Bank has further strengthened its commitment to all its stakeholders by continuing to support all relevant segments to support their respective activities to overcome the current economic crisis.

Despite the current economic crisis, the Bank posted a commendable PAT of Rs 7.1 billion and a PBT of Rs 9 billion for the period ended 30 June 2022, reflecting a slight increase of 0.3% and a slight decrease of 5 .5% respectively compared to the figures reported in 1H 2021. Meanwhile, the Group declared a PAT of Rs 7.4bn and a PBT of Rs 9.6bn, denoting a decline of 2% and 5.5% respectively in the first half of 2021.

Key financial highlights reported by Sampath Bank for 1H 2022:

NIM strong by 4.85% thanks to the rise in the AWPLR.

323% growth in foreign exchange income resulting from the sharp depreciation of the LKR against the USD by 80% or Rs 160.25.

Considerable increase of 69.9% in net fee and commission income during the period, driven by cards and trade-related transactions.

Higher impairment allowances on loans and investments to account for possible economic uncertainties.

An additional tax of Rs 2.67 billion recognized on the Bank’s opening retained earnings.

Fund-based income

Total interest income increased by 41.1% year-on-year to reach 59.2 billion rupees in the first half of 2022 from 41.9 billion rupees in the same period of the year. last year. This significant increase in interest income is due to the upward trend in interest rates in the first half of 2022. The AWPLR at the end of the reference period reached 22.62%, or 1,711 basis points higher than the published rate as of June 30, 2021. In addition, the current AWPLR exceeded the end-2021 figure by 1,401 basis points. At the same time, the interest rate on a one-year Treasury bill increased by 1,861 basis points compared to the rate on Treasury bills published at the end of June 30, 2021 and stood at 23.84% at end of June 30, 2022.

Interest expense increased by 22.6% compared to the corresponding period last year due to the upward trend in interest rates. The Bank’s total interest expense stood at 27.8 billion rupees at the end of the current reporting period, compared to 22.7 billion rupees in the first half of 2021. Prudent management of assets and liabilities, however, ensured that net interest income grew 63% in the first half of 2022. This trend is reflected in NIM growth of 124 basis points reported for the period.

Non-Fund Based Income

The Bank recorded a significant increase of 69.9% in its net income from commissions (NFCI) in 1H 2022 compared to the same period of the previous year. NFCI is made up of income from a variety of sources, including loans and advances, credit cards, commerce, and e-channels. During the period under review, significant growth was seen in card-related business volumes as well as fee and commission income from trade-related activities.

During the first half of 2022, other net operating income increased to Rs 16 billion, an unprecedented increase of 378% from the Rs 3.4 billion recorded during the corresponding period of the previous year. This was mainly due to the 80% depreciation of the LKR against the US dollar. Meanwhile, the Bank recorded a net trading loss of Rs 2.5 billion, compared to the gain of Rs 46 million recorded in the corresponding period of the previous financial year. Total trading revenue for the first six months of 2022 was Rs 13 billion against Rs 3 billion recorded in 1H 2021.

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