By Azhar Razak
Sri Lanka’s fast expanding financial Services firm, Sampath Bank Plc is planning on shifting its focus next year from expansion of branches to attracting bigger volumes as it looks to have a network of 210 branches in place, the Bank’s Chief Executive Harris Premaratne said speaking at Sampath Bank’s investor forum held last week.
He further said that the bank’s aggressive branch expansion initiatives during the last three years was intended towards being par in network size with the other two leading private commercial banks, Commercial Bank and Hatton National Bank.
“When that is in place, the Bank will focus on increasing volumes in an environment we foresee where Net Interest Margins (NIM) to be under threat due to lower lending rates,” Premaratne said.
He noted that the Bank was planning on getting accustomed to lower margins and earning through higher volumes.
“We will go for volumes since interest margins which were hovering around 5-6 percent in the last couple of years has come down sharply to about 4.1% and is expected to soon stabilise to about 3% levels,” the CEO mentioned.
He said that although the bank’s management was presently concerned about the high ‘cost to income ratio’ due to higher branch expansions, he was hopeful that this could be corrected in the next few years with lower expansions.
“Most of the branches set up are taking between 8 months to 2 years to break even and therefore we are hopeful that by 2013 all our branches will be profitable,” Premaratne said.
Sampath Bank, which presently operates a network of 188 branches and 237 Automated Teller Machines, opened 19 branches in the year 2009 and a record 40 branches in 2010.
“This year too we are planning on opening another 40 branches which will take our branch network to around 210 by year end,” Premaratne said disclosing plans to open 5 branches tomorrow taking the tally to 193 and targeting to open the 200th branch during the first week of September.
He further noted that the Bank, in its endeavour to become the largest card issuer among private banks, expects to have issued 100,000 credit cards by the end of 2011 from 87,000 cards at present, which will take the bank to the Number 2 position.
Sampath Bank Group which comprises of Sampath Bank and four subsidiary companies, posted impressive results for the six months ending June 30, 2011 achieving a Pre-Tax Profit of Rs.2,977 million, a growth of Rs.1,092 million or 57.9 %, over the previous year’s pre-tax profit of Rs.1,885 million.
The post - tax profit of the Group for the 1H 2011which amounted to Rs. 2,131 million, recorded a growth of Rs.765 million or 56%, over the post-tax profit of Rs.1,366 million for the same period last year. Marked improvements in the performance of all four subsidiary companies during the period under review facilitated recording this higher profit growth rate at the group level in 2011.
The Bank in a statement issued said that the above profit growth was achieved despite many challenges posed by market forces and the expansion drive undertaken by Bank.
“The mark to market losses in the 1H 2011, arising from the market price fluctuations on the equity and Treasury Bill investments held by the Bank in the trading portfolio amounted to Rs.146.3 million, as against a net gain of Rs. 195.7 million from this source, in the corresponding period last year. In addition, the revaluation losses arising from the appreciating LKR against the US Dollar amounted to Rs. 93.6 million, as against a loss of Rs. 43.5 million last year. The LKR appreciated against the US Dollar by Rs.4.10 over the period, from Rs.113.60 as at 30.06.2010 to Rs.109.50 as at 30.06.2011,” the Bank stated.
http://www.thebottomline.lk/2011/07/31/page38.html
Sri Lanka’s fast expanding financial Services firm, Sampath Bank Plc is planning on shifting its focus next year from expansion of branches to attracting bigger volumes as it looks to have a network of 210 branches in place, the Bank’s Chief Executive Harris Premaratne said speaking at Sampath Bank’s investor forum held last week.
He further said that the bank’s aggressive branch expansion initiatives during the last three years was intended towards being par in network size with the other two leading private commercial banks, Commercial Bank and Hatton National Bank.
“When that is in place, the Bank will focus on increasing volumes in an environment we foresee where Net Interest Margins (NIM) to be under threat due to lower lending rates,” Premaratne said.
He noted that the Bank was planning on getting accustomed to lower margins and earning through higher volumes.
“We will go for volumes since interest margins which were hovering around 5-6 percent in the last couple of years has come down sharply to about 4.1% and is expected to soon stabilise to about 3% levels,” the CEO mentioned.
He said that although the bank’s management was presently concerned about the high ‘cost to income ratio’ due to higher branch expansions, he was hopeful that this could be corrected in the next few years with lower expansions.
“Most of the branches set up are taking between 8 months to 2 years to break even and therefore we are hopeful that by 2013 all our branches will be profitable,” Premaratne said.
Sampath Bank, which presently operates a network of 188 branches and 237 Automated Teller Machines, opened 19 branches in the year 2009 and a record 40 branches in 2010.
“This year too we are planning on opening another 40 branches which will take our branch network to around 210 by year end,” Premaratne said disclosing plans to open 5 branches tomorrow taking the tally to 193 and targeting to open the 200th branch during the first week of September.
He further noted that the Bank, in its endeavour to become the largest card issuer among private banks, expects to have issued 100,000 credit cards by the end of 2011 from 87,000 cards at present, which will take the bank to the Number 2 position.
Sampath Bank Group which comprises of Sampath Bank and four subsidiary companies, posted impressive results for the six months ending June 30, 2011 achieving a Pre-Tax Profit of Rs.2,977 million, a growth of Rs.1,092 million or 57.9 %, over the previous year’s pre-tax profit of Rs.1,885 million.
The post - tax profit of the Group for the 1H 2011which amounted to Rs. 2,131 million, recorded a growth of Rs.765 million or 56%, over the post-tax profit of Rs.1,366 million for the same period last year. Marked improvements in the performance of all four subsidiary companies during the period under review facilitated recording this higher profit growth rate at the group level in 2011.
The Bank in a statement issued said that the above profit growth was achieved despite many challenges posed by market forces and the expansion drive undertaken by Bank.
“The mark to market losses in the 1H 2011, arising from the market price fluctuations on the equity and Treasury Bill investments held by the Bank in the trading portfolio amounted to Rs.146.3 million, as against a net gain of Rs. 195.7 million from this source, in the corresponding period last year. In addition, the revaluation losses arising from the appreciating LKR against the US Dollar amounted to Rs. 93.6 million, as against a loss of Rs. 43.5 million last year. The LKR appreciated against the US Dollar by Rs.4.10 over the period, from Rs.113.60 as at 30.06.2010 to Rs.109.50 as at 30.06.2011,” the Bank stated.
http://www.thebottomline.lk/2011/07/31/page38.html
0 comments:
Post a Comment
Please feel free to leave your comments, suggestions, feedback or anything you want me to read!!Thank You