& nbsp
Author: Ajantha of Vas Gunasekara, Executive Director / CFO, Sampath Bank
Sri Lanka is a story of return that economists are closely monitoring because it still has a long way to go, despite the significant progress made in the aftermath of the financial crisis which took place in 2022. Recording its first quarter of growth in the third quarter of 2023 after six consecutive negative growth districts, the country maintained its growth base in 2024 to record five percent, base.
The country held presidential and parliamentary elections in 2024 with a smooth transition of power during the year. The stability obtained by systematically applied policies is laudable because the country has reached stability in the trifecta, inflation, interest rates and exchange rates of levels abnormally high in 2022 and 2023. Exports, tourism and shipment of workers have increased foreign currency entries supporting stability and growth.
The restructuring of international sovereign obligations and the release of the third tranche of the extensive fund installations of the International Monetary Fund strengthened the economy. The country’s official official reserves of the country are 3.9 months by the end of 2024 and the country’s default note was revised upwards, giving rise to an omnipresent feeling of renewed optimism among the people.
The objective of financial inclusion
Since its creation in 1986, Sampath Bank has transformed the banking sector in Sri Lanka using technology and innovative products to achieve financial inclusion, a term not yet invented at the time. To be the first Bank of Sri Lanka to exploit a multi-point network of automated dispute machines (ATM) in 1988 or the first to issue debit cards in South Asia in 1997, Sampath Bank continuously sought to democratize the practical bank, seeking higher levels of penetration with affordable and practical banks. Consequently, Sampath Bank aligned its priorities to support the recovery and growth of the economy.
Supporting the Renaissance of companies was a key area of attention, and the corporate renewal unit was created to provide financial advice and management tools to go beyond cash constraints to prosper in a recovery economy. More than 74 companies that have been relaunched, stabilized and have left the portfolios of the bank and stage three stage testify to the effectiveness of this new unit. These companies are now stable with better management and practical reimbursement calendars with a height of sufficient height for growth.
Sampath Bank continuously sought to democratize the practical bank
The bank’s loan book increased by 10% during the year, against a drop of 4.7% the previous year, because the bank supported the growth of the active sectors of the economy such as tourism, information and communication technologies and health care.
The bank has retained its management position in the shipment of workers’ funds and increased the market share, helping an increasing migrant population to support their families in Sri Lanka by reimaginating the offer with relevant advantages and extending our scope. The growth of digital volumes and values of transactions continues to feed our heritage from taking advantage of relevant technology to integrate Sri Lankans into a digital era and the advantages of access to opportunities and financial services.
Rely on a strong heritage
A new strategy was developed in 2024 to position the bank along a new growth trajectory to be the best in everything we do. It is based on the bank’s inheritance to meet the needs of the future through proposals for the value of improved stakeholders. The strategy focuses on five pillars: the company, the SMEs, the transactions bank, high -knotted families and advanced analysis. This strategy allows the bank to extend the value chains of SMEs, thus improving our value proposal for SMEs, entrepreneurs and farmers by building resilient ecosystems that facilitate access to markets and finance. The bank has a launching drain for this strategy with card leadership, loyal customers, customer information, a motivated team and solid finances, facilitating the development of unique and useful offers for target customers. Advanced analysis and use of AI tools will support efficiency and growth while we will use technology progress to improve the banking model.
Sampath Bank made the greatest investment in its history in digital technologies in 2024 and is at the next transition phase of people to the new standard. The teams are trained to unlearn, relearn and improve, in order to drive both the performance of their own and the bank. This was supported with the highest training expenses in the history of the bank. This approach aims to stimulate growth, improve customer fidelity and position the bank for future success while strengthening leadership in the main activity sectors.
Sampath Bank provided strong PAT growth recording an EPS of RS23.30 in 2024, compared to RS14.62 reported in 2023, because delivery on the strategy was supported by a convalescent economy. The net growth in interest profits and a significant decrease in depreciation provisions have contributed to the growth in profits. The after -tax profit amounted to RS27.3 billion ($ 93 million), an increase of 59.4%, reflecting the value created for investors.
The total growth in the bank’s assets was 15.3% as the balance sheet extended to RS1.778 billion ($ 6.1 billion), reflecting a targeted growth strategy. Loans and advances recorded growth from 10% to Rs964.6 billion ($ 3.3 billion) as businesses increased with economic stability. Investment portfolios increased by 28.7% to 801 billion rupees ($ 2.7 billion), reflecting the prudent growth approach in 2024 as well as our future growth capacity.
Strong growth in deposits from 16.2% to RS1.469 billion rupees ($ 5 billion) financed growth, an increase in customer centricity has strengthened the brand leadership. The growth of the current account and the savings account (CASA) was also encouraging at 18.3%, which underwent the pressure on NII margins as interest rates decreased. Above all, the level 1 capital adequacy ratio of the bank has improved marginally, remaining well above industry standards while recording a significant improvement in the quality indicators of assets.
Targeted sustainable development initiatives
Sampath Bank continues to improve the sustainability of the business model while investing in the future of the planet and its inhabitants thanks to targeted sustainability initiatives. The environmental and social management system is now an institutionalized process that assesses the environment and the social impact of loan facilities greater than RS100M. Financial inclusion is supported by several initiatives as well as our subsidiary, Siyapatha Finance. In addition, the implementation of SLFR sustainability standards in 2025 will ensure that controls on sustainability reports are as rigorous as those on financial reports.
The bank minimized the glasses emissions and two by increasing our own solar generation capacity, which generated $ 664.6 million in 2024. In addition, lending RS1.440m ($ 4.9 million) to renewable energy projects with a total installed capacity of 10 MW has helped to minimize the three scope of the scope. Initiatives aimed at minimizing and managing waste continues to transform the way we work while improving awareness of the need for action from the whole bank.
We continue to invest in our employees, supporting their career progress thanks to targeted training
Bank’s sustainability initiatives have been strategic in nature, nourishing environmental and social ecosystems that support each other to prosper. “ Wewata Jeewayak ”, the flagship project of the bank is now in its 24th year after having undertaken a total of 30 tanks which are vital for the food production of the country, supporting the means of subsistence of more than 3,700 families in agricultural communities. This step was marked by the restoration of nine tanks in 2024, the highest undertaken in a single year. The project helps to irrigate 3,400 acres of rice fields, allowing farmers to work two seasons instead of one. These tanks store and distribute rainwater in fields and houses, while rejuvenating flora and fauna. The project partners improve the scope, extending it to financial inclusion, the development of entrepreneurship and good agricultural practices, to name only a few aspects of this increasingly multifaceted project which offers advantages at the base. “A breath towards the ocean” looks at the restoration of the mangroves, the replanting of corals and the conservation of turtles to support life underwater. “Gasai Mamai Pubudu Pothai” (The Tree, Me and My Savings Book) instills the awareness of the importance of nourishing trees in the next generation. Environmental restoration projects undertaken by the bank include Kanneliya and Udawalawe forest catering projects as well as the mangroves restoration project in the wetland of Anawilundawa Ramsar, reflecting our commitment to the environment.
Invest in the future
We continue to invest in our employees, by supporting their career progress thanks to targeted training while implementing initiatives to support their health and well-being, including their mental well-being. More than 16 programs have been implemented for health and well-being covering more than 23% of employees. The accent renewed on the training led to an average of 45 hours of training per employee and coverage of 98.5% of employees. We have promoted 458 employees during the year to meet the commercial needs of a bank in a growth phase. The bank’s retention rate of 96.8% and the return to work rates after maternity leave testify to our holistic value proposal for employees.
Sri Lanka experienced a strong start for 2025 with a convergence of positive factors. Political stability, an improved sovereign note, the growth of trade, tourism and funds as well as the improvement of the confidence of companies augur well the capacity of the country to achieve the growth of the expected GDP of approximately five in 2025. The banking sector should be a catalyst and a beneficiary of the improved prospects for the country.
The strategy with several growth stations described above will guide our quest to be the best bank in the country. We remain confident to carry out our aspirations while we rely on solid foundations with a motivated team.