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Sampath posts Rs. 8.68bn 3Q profit, pre-tax earnings fall 7%

Sampath Bank PLC’s group net profit rose 15 percent to Rs. 8.68 billion in the September quarter, helped by a lower income tax bill. Profit before income tax fell 7 percent to Rs. 11.18 billion, with higher operating costs and impairment charges absorbing the gains from stronger lending income.

Group net interest income climbed 26 percent to Rs. 25.27 billion and net fee and commission income rose 11 percent to Rs. 6.93 billion. A Rs. 4.76 billion net trading loss, against a Rs. 355 million gain a year earlier, held total operating income growth to 10 percent. Operating expenses rose 23 percent to Rs. 15.68 billion and impairment charges more than doubled to Rs. 1.13 billion. The group’s income tax expense fell 45 percent to Rs. 2.51 billion. At the bank level, quarterly net profit rose 18 percent to Rs. 8.01 billion, while profit before income tax fell 8 percent to Rs. 10.08 billion. Net interest income rose 24 percent to Rs. 23.13 billion and net fees grew 14 percent to Rs. 6.70 billion. Operating income increased 9 percent, while expenses rose 22 percent and the impairment charge more than doubled to Rs. 1.07 billion. The bank’s quarterly income tax expense halved to Rs. 2.07 billion.

For the first nine months, group net profit increased 15 percent to Rs. 26.54 billion, while profit before income tax slipped 1% to Rs. 37.81 billion. The bank’s standalone net profit also rose 15 percent, to Rs. 24.63 billion, even as profit before income tax fell 2 percent to Rs. 34.64 billion. Sampath attributed the reduction in the bank’s nine-month tax bill primarily to the finalisation of prior-year tax assessments.

The bank’s gross loans grew 22 percent, or Rs. 273 billion, from December to Rs. 1.50 trillion at end-September. Deposits rose 13 percent to Rs. 1.86 trillion. The larger loan book and higher lending yields lifted nine-month net interest income 15 percent to Rs. 65.93 billion, while net interest margin widened to 4.22 percent from 4.11 percent at end-2025. The bank’s cost-to-income ratio rose to 44.3 percent from 41.5 percent a year earlier, with operating expenses growing 22 percent against a 14% increase in operating income.

The stock of Stage 3 loans, which are classified as credit-impaired, fell by Rs. 14.4 billion from year-end. The nine-month charge for loan impairments rose to Rs. 8.1 billion from Rs. 2.3 billion, which Sampath attributed mainly to higher collective provisions on its expanded loan book and additional buffers. A Rs. 1.3 billion impairment reversal on other financial instruments, linked mainly to lower provisions on foreign-currency bonds following Fitch’s sovereign upgrade, helped limit the bank’s total impairment charge to Rs. 6.0 billion.

The bank’s common equity Tier 1 ratio fell to 12.27 percent from 14.75 percent at end-2025, while its total capital ratio declined to 15.32 percent from 17.65 percent. Sampath said loan growth increased risk-weighted assets and that its capital ratios remained above regulatory requirements. The bank raised Rs. 10 billion through a Basel III-compliant debenture issue in October, after the reporting period