Like many banks, Sampath Bank suffers from COVID-19 crisis
View(s):The financial results of Sampath Bank, amidst the havoc caused on the economy by the COVID–19 pandemic, have suffered in the first nine months of 2020.
According to a bank statement on Thursday, the bank recorded a profit before tax (PBT) of Rs.6.99 billion for the nine months ending September 2020, a 33.1 per cent drop from the 2019 corresponding months. Profit after tax (PAT) was recorded at Rs. 5.09 billion, down by 22 per cent compared to 2019. PBT and PAT of the Group for the first nine months of the year stood at Rs. 7.31 billion and Rs. 5.21 billion respectively. This is a reduction of 32.6 per cent in PBT and 23 per cent in PAT against the achievements of the corresponding period.
The statement said low interest rates, restrictions on fee-based income, subdued economic activities both locally and globally coupled with the two-month island-wide lockdown due to COVID-19 were the main reasons that impacted the bank’s performance during this period.
“Moreover, in the light of depressed market conditions, the bank adopted a more conservative approach to making a significant amount of additional impairment provisions on foreign currency denominated government bonds as well as on loans and advances, which together have been responsible for a sizable profit erosion. However, the bank reported a reduced profit for the period under review which can be considered as a promising result in the wake of these economic headwinds,” it said.
The bank said it took action to implement the COVID–19 relief schemes for the benefit of customers. Accordingly, approximately 50 per cent of the bank’s customers enjoyed the moratorium relief. Further, Sampath Bank also actively participated in the government-led refinance scheme and granted approximately Rs.8 billion worth of working capital loans. “Although the spread of COVID-19 was well controlled in the third quarter of this year, the re-imposition of movement restrictions in response to the second wave will no doubt push back Sri Lanka’s anticipated economic recovery,” it said.