Sampath Bank delivered a strong financial performance for the six months ended 30th June 2026, reporting Total Operating Income of Rs 63.3 Bn, an increase of 17% compared to the corresponding period last year. The Bank’s performance was driven by sustained growth across its core revenue streams, with Net Interest Income increasing by 11% and Net Fee and Commission Income rising by as much as 26%.
The Bank’s earnings performance was, however, moderated by a higher impairment charge of Rs 5.0 Bn – a year-on-year increase of a very significant 324% -driven primarily by collective impairment attributable to the continued expansion of the loan portfolio as well as the Bank’s prudent provisioning strategy adopted in light of ongoing geopolitical uncertainties and the evolving macroeconomic environment. Consequently, the Net Operating Income recorded a more modest growth of 10% over the corresponding period of the previous year.
Despite higher operating expenses arising from business expansion initiatives and continued strategic investments in technology, distribution and human capital, the Bank reported a Profit After Tax of Rs 16.6Bn for the period, reflecting a robust year-on-year increase of 13%. In line with its strategic growth priorities, the Bank’s loan portfolio expanded by Rs 226 Bn from its position at the end of 2025, representing a robust increase of 18%.
The Bank recorded a strong quarter-on-quarter improvement in profitability, with Profit After Tax increasing by 69% compared to the preceding quarter. This performance was driven by a 22% increase in Total Operating Income, reflecting continued business momentum across the Bank’s core operations, together with a89% reduction in impairment charges. The lower impairment charge was primarily attributable to an impairment reversal exceeding Rs 3 Bn, driven by the successful recovery of long-outstanding loans during the quarter. The Sampath Group reported a Profit Before Tax of Rs 26.6 Bn and a Profit After Tax of Rs 17.9 Bn for the six months ended 30th June 2026.
In the first half of 2026, Sampath Bank reported Total Interest Income of Rs 97.8 Bn, representing a 9% increase compared to the corresponding period last year. Interest expenses increased by 8% to Rs 55.1Bn, primarily reflecting the continued expansion of the deposit base and additional borrowings undertaken to support the Bank’s accelerated credit growth. As the growth in interest income outpaced the increase in funding costs, Net Interest Income (NII) increased by 11% over the corresponding period of the previous year to Rs 42.8 Bn.
Consequently, the Bank’s Net Interest Margin (NIM) improved to 4.21%, compared with 4.11% reported in 2025. The Bank’s non-fund-based income increased by 30% over the corresponding period of the previous year to Rs 20.5 Bn, driven by sustained growth in fee and commission income and anappreciable increase in foreign exchange-related earnings.
Net Fee and Commission Income increased by 26% to Rs 12.2 Bn, supported by the continued expansion of the Bank’s lending portfolio and higher transaction volumes across its key business segments. Meanwhile, Total Exchange Income rose significantly to Rs 7.2 Bn, representing an increase of 198%over the corresponding period of the previous year. The increase was primarily attributable to the depreciation of the LKR against the USD by Rs 26.12 during the period, together with higher foreign exchange transaction volumes.
Capital gains from the sale of Treasury bills and bonds moderated to Rs 1.0 Bn, during the period, from Rs 3.5 Bn recorded in the corresponding period of 2025, reflecting lower opportunities for gains in the prevailing market environment. The Bank recognised a total impairment charge of Rs 5.0 Bn during the first half of 2026, compared with Rs 1.2 Bn recorded in the corresponding period of 2025, representing an increase of Rs 3.8 Bn. The impairment charge on loans and advances increased to Rs 5.3Bn in the first half of 2026, compared with Rs 1.4 Bn in the corresponding period of 2025. This increase was primarily attributable to higher collective impairment provisions arising from the Bank’s strong loan portfolio growth of 18% during the period, compared with 7% growth recorded in the first half of 2025.
During the first half of 2026, the Bank recovered Rs 572 Mn from written-off customers, compared with Rs 216 Mn recognised during the corresponding period of 2025. An impairment charge of Rs 0.2 Bn was recognised on other financial instruments during the first half of 2026, primarily in relation to new investments made during the period.
During the first half of 2026, the Bank’s operating expenses increased by 21% year-on-year. As operating expenses grew at a faster pace than Total Operating Income, which increased by 17% during the period, the Bank’s Cost-to-Income Ratio increased to 41.7%, compared with 40.0% in the corresponding period of 2025. The Bank recorded a total tax expense of Rs 15.3 Bn for the first half of 2026, representing a8% decrease compared with the corresponding period of 2025.
Sampath Bank continued its growth momentum during the first half of 2026, expanding its asset base by8% from the year-end 2025 position to reach Rs 2.13 Tn as at 30th June 2026. This increase was largely attributable to strong growth in the lending portfolio, with Gross Loans increasing by Rs 226 Bn to Rs 1,449 Bn.
The expansion was driven by a Rs 197 Bn growth in LKR-denominated loans, complemented by a Rs 29 Bn increase in foreign currency lending. The Bank’s deposit base increased by Rs 118 Bn during the period to reach Rs 1.76 Tn as at 30thJune 2026, compared with Rs 1.65 Tn as at 31st December 2025. The growth was largely supported by a Rs 99 Bn increase in LKR-denominated deposits, complemented by a Rs 19 Bn rise in foreign currency deposits.
As at 30, June 2026, the Bank recorded a Return on Average Shareholders’ Equity (after tax) of 18.91%, compared with 17.93% as at 31st December 2025. Meanwhile, the Return on Average Assets (before tax) stood at 2.40%, compared with 2.60% recorded at the end of 2025.
As at 30thJune 2026, the Common Equity Tier 1 (CET 1), Tier 1 and Total Capital ratios stood at 13.21%, 13.21% and 15.62%, respectively, compared with 14.75%, 14.75% and 17.65% as at 31st December 2025. As part of its ongoing efforts to strengthen its capital position, the Bank successfully issued a Rs 10 Bn Basel III-compliant Green Bond in July 2026.
Source: Daily News
