September quarter profits at Sanasa Development Bank, a leading financier to rural economy rose 90 percent to 138.2 million rupees compared to the same period in the previous year.
The bank's third quarter income rose 7 percent to 1.2 billion rupees compared to the previous year's September quarter earnings of 1.1 billion rupees. Net interest income has surged 34 percent owing to a 13 percent decline in interest expenditure from 661.5 million rupees in 2013 to 577.9 million rupees in September 2014. The reduction in interest expenditure indicates the bank's adjustments to the recent lowering of interest rates by the Central Bank. The Bank has recorded a net interest income of 636 million rupees in the third quarter of 2014.
Bank charges and commissions in the third quarter of 2014 stands at 35.6 million rupees which is an increase of 15 percent compared to the 31 million rupees earned during the same period of 2013. Total operational income has increased by 28 percent to 723million rupees compared to the 564 million rupees recorded during the same quarter of 2013.Sanasa Development Bank has also shown progress in lowering its provisions for non performing loans. Provisions for non performing loans have reduced by 26 percent to 41.2 million rupees in the third quarter of 2014. This has significantly reduced both the bank's gross and net non performing loan rates. The gross non performing loan rate which stood at 5.08 percent by the end of 2013 has notably reduced to 4.00 percent by the end of September 2014. Net non performing loan rate has also tumbled from 3.03 percent to 2.76 percent.
Operational costs in the third quarter of 2014 have increased by 30 percent to 466 million rupees when compared to the same period in 2013. The bank's total assets as at 30th September 2014 stand at 34.1 billion rupees a growth of 15 percent from 29.7 billion rupees recorded in the year ending 31st December 2013.Compared to December 2013, total deposits have increased by 17 percent to 27.5 billion rupees reflectingthe trust customers have placed on Sanasa Development Bank and the attractive rates the bank has been offering.
By 30th September, 2014, the bank's total capital stood at 3.5 billion rupees, capital adequacy ratio at 11.6 percent, total capital adequacy ratio at 11.47 percent and the liquidity asset ratio at 22.12 percent. These ratios are all well within the Central Bank's stipulated regulations. In September 2014, the return on assets (ROA) increased to 2.13 percent from a previous 1.22 percent in December 2013. The return on equity (ROE) also surged by 14.04 percent in September 2014 compared to the 7.42 percent recorded in December 2013.
Within the nine months ending in September, 2014, Sanasa Development Bank recorded a profit after tax of 365.3 million rupees compared to the 282 million rupees recorded during the same period in 2013. Interest income has grown by 7 percent to 3.5 billion rupees while interest expenditure dipped 4 percent resulting in a total net interest income growth of 23 percent.
Income from bank charges and commissions have surged 11 percent to 90 million rupees while total operating income has grown 21 percent to 1.9 billion rupees during the first nine months of 2014. Provision for loans has declined by 1 percent to 119 million rupees during the third quarter of this year. New recruitment and salary revisions have resulted in a 1.1 billion rupee increase in the bank's operational cost during the nine months ending in September, 2014. New recruits have been deployed to expand the bank branch network and bolster customer services.
"The primary aim of the Sanasa Development Bank is to provide our stakeholders with long term dividends. These objectives are integrated in our business strategies. Our strong risk and dividend management mechanism and efficient business risk management are the drivers of these core objectives. The main factor that has driven this year's growth is the tireless efforts of all staff members," Nimal C. Hapuarachchi, GM and CEO of Sanasa Development Bank said.
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