Sampath Bank quarterly profit pressured by prudential provisions

Chairman Harsha Amarasekera

MD/CEO Sanjaya Gunawardana

Substantially higher provisions made against the possible loan losses dented the profits at Sampath Bank PLC, as the bank made additional precautions against the weakening macroeconomic conditions and its fallout on the borrowers’ ability to repay but the bank grew its loan book at a robust pace in the first three months.
The bank reported earnings of Rs.5.82 a share or Rs.6.83 billion for the January-March quarter, compared to Rs.7.61 a share or Rs.8.92 billion in the corresponding period in 2025, a decline of 23 percent.
The bank gave loans worth of Rs.127.45 billion in the three months, which helped it to surpass the Rs.2.0 trillion asset base at bank level for the first time.
The bank made provisions worth of Rs.4.36 billion for the quarter, compared to a provision reversal worth of Rs.312.29 million in the same period last year. The bank said these provisions were a result of the significant expansion in the loan portfolio and the additional overlay allowance of Rs.1.5 billion recognised as a prudential measure in response to the heightened geopolitical uncertainties.
The bank’s Stage 3 loan ratio – the key measure of asset quality – fell to 3.01 percent, from 3.31 percent in December, reflecting some further improvement in asset quality. The bank meanwhile reported a net interest income of Rs.21.84 billion for the quarter, up 7 percent from the same period last year.
This was again on the back of the stronger growth in new loans. However, the net interest margin slightly dented to 4.09 percent, from 4.11 percent in December last year.
The net fee and commission income rose strongly by 29.0 percent to Rs.6.43 billion, supported by the expansion in credit, higher trade volumes and increase in card usage.
The bank meanwhile saw its net trading gains falling to Rs.260.76 million in the quarter, from Rs.2.88 billion in the year earlier period. Further, the bank sold treasury bills and bonds, making lower capital gains of Rs.642.13 million, compared to Rs.2.67 billion made in the year earlier period.
Due to the depreciation in the rupee, the bank made an exchange gain of Rs.1.5 billion, at a 24 percent increase from a year ago.
Billionaire investor Dhammika Perera-owned Vallibel One PLC has a 14.95 percent stake in Sampath Bank while media industry-famed Raynor Silva holds 10 percent in the bank, being its second largest shareholder, via his investment firm Phantom Investments (Pvt.) Limited.
The Employees’ Provident Fund has a 9.97 percent stake in the bank, being its fourth largest shareholder.