Sanasa Development Bank (SDB) has recorded an impressive performance with the bank’s net profit before tax surpassing Rs.1 billion mark for the first time in the history.
This is an exceptional 48% growth compared to the previous year and ended up with a post-tax profit of Rs.720 million for the financial year ended December 31, 2015.
This growth was led by interest income coupled with the responsible interest expenses management. This healthy profitability performance was recorded under challenging market conditions and it demonstrates Bank’s prudent management policies in managing the external forces.
Chairperson Samadanie Kiriwandeniya said the SDB is now poised for a quantum leap through a transformation process leading to a significant revenue enhancement.
Chief Executive Officer Nimal C. Hapuarachchi said 2015, being a year with several political and regulatory postures being changed, which had mixed impact on the financial services sector, achieving a phenomenal growth amidst such macroeconomic challenges, affirms SDB’s position as a resilient financial institution in the market”, Hapuarachchi said.
During the year bank increased its interest income by 36.2% and interest expense increased by only 34.9%. This resulted in net interest income of the bank growing by 37.5% to Rs. 3.3 billion, despite the banking sector margins continuing to drop in 2015.
Net interest income contributed 93% to the total operating income during the year as against 86% contribution during 2014.
Gross income, comprising of interest income, net fee and commission income, net gains/(losses) from financial assets held through fair value through profit and loss and other operating income recorded a 31% increase to reach Rs 6.8 bn for the year.
Operating expenses which comprises personnel cost, depreciation and amortization and other operating expenses increased by 30.6% and posts Rs. 2.2 billion compared to the level of Rs. 1.6 billion posted in the previous financial year.
The primary drivers for this growth were personnel costs and office administration and establishment expenses accounting for 46% and 21% respectively of the total operating expenses.
The growth in personnel cost was driven largely by the increased head count, taken for future expansions as well as the periodic salary revision made in June 2015. These changes have been made amidst the expected aggressive business transformation across the bank, the benefits of which will accrue over the coming years. Although the overall operating expenses reflected an increasing trend, it is noteworthy that the cost to income ratio was controlled at 60.4% from 62.6% in financial year 2014, demonstrating the bank’s shrewd management of expenses.
Impairment charge for loans and receivables of the bank was Rs. 49.5 million and compares with a charge of Rs. 204.3 million in 2014, a decrease of 75.7% over 2014. This substantial decline represents the bank’s sound judgment in assessing the fair value of the impaired loans, based on objective evidence of future recoveries and is in accordance with bank’s stringent risk management policies.
This is an exceptional 48% growth compared to the previous year and ended up with a post-tax profit of Rs.720 million for the financial year ended December 31, 2015.
This growth was led by interest income coupled with the responsible interest expenses management. This healthy profitability performance was recorded under challenging market conditions and it demonstrates Bank’s prudent management policies in managing the external forces.
Chairperson Samadanie Kiriwandeniya said the SDB is now poised for a quantum leap through a transformation process leading to a significant revenue enhancement.
Chief Executive Officer Nimal C. Hapuarachchi said 2015, being a year with several political and regulatory postures being changed, which had mixed impact on the financial services sector, achieving a phenomenal growth amidst such macroeconomic challenges, affirms SDB’s position as a resilient financial institution in the market”, Hapuarachchi said.
During the year bank increased its interest income by 36.2% and interest expense increased by only 34.9%. This resulted in net interest income of the bank growing by 37.5% to Rs. 3.3 billion, despite the banking sector margins continuing to drop in 2015.
Net interest income contributed 93% to the total operating income during the year as against 86% contribution during 2014.
Gross income, comprising of interest income, net fee and commission income, net gains/(losses) from financial assets held through fair value through profit and loss and other operating income recorded a 31% increase to reach Rs 6.8 bn for the year.
Operating expenses which comprises personnel cost, depreciation and amortization and other operating expenses increased by 30.6% and posts Rs. 2.2 billion compared to the level of Rs. 1.6 billion posted in the previous financial year.
The primary drivers for this growth were personnel costs and office administration and establishment expenses accounting for 46% and 21% respectively of the total operating expenses.
The growth in personnel cost was driven largely by the increased head count, taken for future expansions as well as the periodic salary revision made in June 2015. These changes have been made amidst the expected aggressive business transformation across the bank, the benefits of which will accrue over the coming years. Although the overall operating expenses reflected an increasing trend, it is noteworthy that the cost to income ratio was controlled at 60.4% from 62.6% in financial year 2014, demonstrating the bank’s shrewd management of expenses.
Impairment charge for loans and receivables of the bank was Rs. 49.5 million and compares with a charge of Rs. 204.3 million in 2014, a decrease of 75.7% over 2014. This substantial decline represents the bank’s sound judgment in assessing the fair value of the impaired loans, based on objective evidence of future recoveries and is in accordance with bank’s stringent risk management policies.
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