Putting to rest speculation surrounding its investment in Lanka Bangla Finance (LBF) in Bangladesh, Sampath Bank (SB) says that it will hold onto this investment.
Responding to share market speculation on SB's LBF investment being divested, Ranjith Samaranayake, Executive Director/Group Chief Financial Officer SB told the Business Times that LBF is a long term investment for the bank, despite the volatility of the Bangladesh economy.
"The (share) market in Bangladesh is volatile, but it's a foothold in another economy which SB wants to keep as our cost of investment in (LBF) is negligible (at Rs 60 million)," he explained. Mr. Samaranayake said that while SB intends to eye regional markets, it is most definitely a long term plan as setting up in these countries is capital intensive (as at now). He added that SB has recorded the highest credit growth (of the accounts published so far) for the first half of this year in the industry. Credit growth had risen by 19.6% to Rs.153 billion from Rs. 128 million during last year's same period at SB and Mr.
amaranayake added that pawning recorded the highest growth rate at 24.21% to Rs. 6.7 billion in the first half of this year.
He said many loans for tourism projects in the East (building and refurbishing) have been granted by SB and that this is a growth sector in Sampath's loan book.
"Advisory services for initial public offerings (IPO) are another growth sector," Mr. Samaranayake added. He said that SB completed Softlogic, Panasian Power and the rights issue of People's Leasing in this sector. He said SB has during the past year provided large amounts in working capital financing and that this too has become a large growth sector for SB. Pre-tax profit at SB Group was at Rs 2,977 million for first half of this year which is a growth of Rs 1,092 million (57.9%) over the previous year's pre-tax profit of Rs 1,885 million. Mr. Samaranayake said that Sampath contributed some 94.24% of the profit.