Bank Profits

July 28, 2011 (LBO) – Sri Lanka’s Sampath Bank group’s net profits in the June 2011 quarter rose 52 percent to 1.13 billion rupees from a year earlier partly helped by a provision reversal amid strong loan growth, provisional accounts showed. The group reported 7.26 rupees of earnings per share for the quarter.

Interest income grew 11.8 percent to 5.1 billion rupees in the quarter while interest expenses grew at a faster 19 percent to 2.97 billion rupees making net interest income grow at a slower 3.2 percent.

Group’s performing loans grew 21 percent to 149 billion rupees by end June 2011 from December 2010.

Fee income fell 9.0 percent to 1.23 billion rupees with forex income falling 32 percent to 100 million rupees. Sri Lanka’s rupee is now less volatile and appreciating giving fewer opportunities for banks to make forex gains.

Unspecified other income also fell 6 percent to 1.13 billion rupees. The group made a net 405 million rupees reversal of loan losses compared to a 322 million rupee provision a year earlier allowing pre-tax profit to rise to 1.76 billion rupees in the quarter from 1.4 billion a year earlier.

The group said reversals included 275.9 million rupees provided for an investment in Union Bank, which