Sampath Bank posted a 13% year-on-year increase in profit after tax to Rs. 16.6 billion for the six months ended June 30, 2026, despite a sharp rise in impairment charges and higher operating expenses, reflecting continued growth in its core banking business.
The bank’s total operating income increased 17% to Rs. 63.3 billion during the first half, supported by an 11% increase in net interest income and a 26% rise in net fee and commission income. Net interest income reached Rs. 42.8 billion, while net interest margin improved to 4.21% from 4.11% a year earlier.
A particularly strong contributor to non-interest earnings was foreign exchange-related income. Total exchange income surged 198% to Rs. 7.2 billion, helped by the depreciation of the rupee against the US dollar and higher foreign exchange transaction volumes. Non-fund-based income overall rose 30% to Rs. 20.5 billion.
However, the earnings performance was significantly affected by higher provisioning. Sampath Bank recognised a total impairment charge of Rs. 5 billion, up 324% from Rs. 1.2 billion in the corresponding period of 2025. Impairment charges on loans and advances alone increased to Rs. 5.3 billion from Rs. 1.4 billion.
The bank attributed the higher provisions primarily to the rapid expansion of its loan portfolio and a prudent provisioning approach amid continuing geopolitical and macroeconomic uncertainties.
It also increased management overlays and conducted reviews of exposures in higher-risk sectors.
Despite the higher provisioning burden, the bank’s lending business expanded strongly. Gross loans increased by Rs. 226 billion, or 18%, from end-2025 to Rs. 1.449 trillion at June 30. The expansion included Rs. 197 billion in rupee-denominated lending and Rs. 29 billion in foreign-currency loans.
The bank said asset quality remained resilient despite the accelerated loan growth. Its Stage 3 portfolio declined by Rs. 10.8 billion, although Stage 2 exposures increased by Rs. 36.8 billion following a proactive review of the portfolio and the reclassification of selected exposures.
Funding also expanded alongside lending. Customer deposits rose by Rs. 118 billion to Rs. 1.76 trillion, while total assets increased 8% from end-2025 to Rs. 2.13 trillion.
Operating expenses, however, grew 21%, faster than operating income, pushing the cost-to-income ratio to 41.7% from 40% a year earlier. The increase reflected higher staffing and operating costs as well as investments in technology, digital capabilities and business expansion.
The bank’s capital and liquidity positions remained above regulatory requirements. Its Common Equity Tier 1 ratio stood at 13.21% and total capital ratio at 15.62% at June 30. The ratios were lower than at end-2025, largely because of increased risk-weighted assets arising from loan growth.
Sampath Bank subsequently strengthened its capital position by issuing a Rs. 10 billion Basel III-compliant green bond in July, which was oversubscribed.
At group level, Sampath reported profit before tax of Rs. 26.6 billion and profit after tax of Rs. 17.9 billion for the first half.
The bank also recorded a marked improvement in second-quarter profitability, with quarterly profit after tax rising 69%, helped by a 22% increase in operating income and an 89% reduction in impairment charges, including an impairment reversal of more than Rs. 3 billion following recoveries of long-outstanding loans.
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