Despite stock market speculation that Sampath Bank is gearing to go for a rights issue soon, on the back of Rs 1.53 billion profit for 2008, it will not do so, a senior Sampath official said.
“We do not find it necessary to go for a rights issue now because this year we can add about Rs 1 billion from these profits which is a 26.9% growth over 2007’s Rs 1.2 billion, to our capital after paying shareholders their dividends,” Harris Premaratne, Sampath CEO told The Sunday Times FT.
He said this time the dividends will be at 40%, which is the highest so far for Sampath and will be paid after the AGM to be held at the end of the month.
“Last year Sampath paid 30%,” he added. At the Sampath Bank Extra-ordinary General Meeting (EGM) held last October, some 53.75 % proxies were collected against the proposed rights issue while the majority of this was not in favour of the rights issue which was amounting to 17.2 million shares at a ratio of one for four at Rs.100 each.
The rights was announced by the bank in a bid to expand its capital base (TIER I) and finance expansion plans.
The Sampath Group’s pre-tax profit, which consists of the bank, its six subsidiaries and an overseas associate company, rose to Rs. 2.787 billion in 2008, from Rs. 2.384 billion in 2007 recording a growth of Rs. 403 million or 16.9%, as against the negative growth of 0.5% in 2007. Post-tax profit of the Group also crossed the Rs. 1.5 billion mark and reached Rs. 1.525 billion in 2008, as against the Rs. 1.201 billion recorded in 2007. This amounted to a post-tax profit growth of Rs. 324 million or 26.9% for the Group as against the growth of 6% in 2007.