
 
Author: Ajantha de Vas Gunasekara, Executive Director/CFO, Sampath Bank
Sri Lanka is a comeback story that economists are closely monitoring as it still has some way to go, despite the significant progress made in the aftermath of the financial crisis that unfolded in 2022. Recording its first quarter of growth in the third quarter of 2023 after six consecutive quarters of negative growth, the country maintained its growth momentum in 2024 to record five percent growth, albeit from a low base.
The country held Presidential and Parliamentary elections in 2024 with a smooth transition of power during the year. The stability achieved through consistently applied policies is commendable as the country achieved stability in the trifecta, inflation, interest rates and exchange rates of abnormally high levels in 2022 and 2023. Exports, tourism and worker remittances increased foreign currency inflows supporting stability and growth.
The restructuring of the international sovereign bonds and the release of the third tranche of the Extended Fund Facility from the International Monetary Fund strengthened the economy. The country’s gross official reserves stand at 3.9 months by the close of 2024 and the country’s default rating was revised upwards, giving rise to a pervasive sense of renewed optimism among the people.
The financial inclusion goal
From its inception in 1986, Sampath Bank has transformed the banking industry in Sri Lanka using technology and innovative products to achieve financial inclusion, a term not yet coined at the time. From being the first bank in Sri Lanka to operate a multi-point network of Automated Teller Machines (ATM) in 1988 or the first to issue debit cards in South Asia in 1997, Sampath Bank has continuously sought to democratise convenient banking, seeking higher penetration levels with affordable and convenient banking. Accordingly, Sampath Bank aligned its priorities to support the recovery and growth of the economy.
Supporting the revival of businesses was a key area of focus, and the Business Revival Unit was set up to provide financial advice and management tools to move beyond cashflow constraints to thrive in a reviving economy. Over 74 businesses that were revived, stabilised and moved out of the bank’s stage two and stage three portfolios are testimony to the effectiveness of this new unit. These businesses are now stable with improved management and practical repayment schedules with sufficient headroom for growth.
Sampath Bank has continuously sought to democratise convenient banking
The loan book of the bank increased by 10 percent during the year compared to a decline of 4.7 percent in the previous year, as the bank supported growth in active sectors of the economy such as tourism, information and communication technology and healthcare.
The bank retained its leadership position in worker remittances and increased market share, assisting a growing migrant population to support their families in Sri Lanka by re-imagining the offering with relevant benefits and extending our reach. Growth in digital transaction volumes and values continue to nurture our legacy of leveraging relevant technology to integrate Sri Lankans with a digital era and the benefits of access to opportunity and financial services.
Building on a strong legacy
A new strategy was crafted in 2024 to position the bank along a new growth trajectory to be the best in whatever we do. It builds on the bank’s legacy of meeting the needs of the future through enhanced stakeholder value propositions. The strategy focuses on five pillars: corporate, SME, transaction banking, high-net-worth families, and advanced analytics. This strategy enables the bank to extend SME value chains, thereby enhancing our value proposition for the SMEs, entrepreneurs and farmers by building resilient ecosystems that ease access to markets and finance. The bank has a sound launching pad for this strategy with leadership in cards, loyal customer base, customer insights, a motivated team and solid financials, facilitating the development of unique and purposeful offerings for target customer segments. Advanced analytics and use of AI tools will support efficiency and growth as we harness the advancements in technology to level up the bank’s operating model.
Sampath Bank made the highest investment in its history in digital technologies in 2024 and is on the next phase of transitioning the people to the new norm. Teams are being coached to unlearn, relearn and improve, in order to drive both their own and the bank’s performance. This was underpinned with the highest training spend in the history of the bank. This approach aims to drive growth, improve customer loyalty, and position the bank for future success while strengthening its leadership in key business verticals.
Sampath Bank delivered strong PAT growth recording an EPS of Rs23.30 in 2024 compared to Rs14.62 reported in 2023 as delivery on strategy was buoyed by a recovering economy. Net interest income growth and a significant decrease in provisions for impairment contributed to profit growth. Profit after tax amounted to Rs27.3bn ($93m), an increase of 59.4 percent, reflecting the value created for investors.
The bank’s total asset growth was 15.3 percent as the balance sheet expanded to Rs1,778bn ($6.1bn), reflecting a focused growth strategy. Loans and advances recorded growth of 10 percent to Rs964.6bn ($3.3bn) as business confidence increased with economic stability. Investment portfolios increased by 28.7 percent to Rs801bn ($2.7bn), reflecting the cautious approach to growth in 2024 as well as our capacity for future growth.
Strong deposit growth of 16.2 percent to Rs1,469bn ($5bn) funded growth as increased customer centricity strengthened brand leadership. The Current Account and Savings Account (CASA) growth was also encouraging at 18.3 percent, easing pressure on NII margins as interest rates declined. Importantly, the bank’s Tier 1 capital adequacy ratio improved marginally, remaining well above industry standards while also recording significant improvement in asset quality indicators.
Targeted sustainability initiatives
Sampath Bank continues to enhance the sustainability of the business model while also investing in the future of the planet and its people through targeted sustainability initiatives. The Environmental and Social Management System is now an institutionalised process that assesses the environment and social impact of loan facilities above Rs100m. Financial inclusion is supported through multiple initiatives as well as our subsidiary, Siyapatha Finance. Additionally, implementing SLFRS sustainability standards in 2025 will ensure that controls over sustainability reporting are as rigorous as those over financial reporting.
The bank minimised scope one and two emissions by increasing our own solar generation capacity, which generated 664.6Mwh in 2024. Additionally, lending Rs1,440m ($4.9m) in renewable energy projects with a total installed capacity of 10Mw helped minimise scope three emissions. Initiatives to minimise and manage waste continue to transform how we work while enhancing awareness of the need for action by all throughout the bank.
We continue to invest in our people, supporting their career progression through focused training
The bank’s sustainability initiatives have been strategic in nature, nurturing environmental and social ecosystems that support each other to thrive. ‘Wewata Jeewayak,’ the bank’s flagship project, is now in its 24th year having undertaken a total of 30 reservoirs that are vital for the country’s food production, supporting the livelihoods of over 3,700 families in farming communities. This milestone was marked with the restoration of nine tanks in 2024, the highest undertaken in a single year. The project helps to irrigate 3,400 acres of paddy fields, enabling farmers to work two seasons instead of one. These reservoirs store and distribute rainwater to fields and homes, while also rejuvenating the flora and fauna. Project partners enhance the scope, extending it to financial inclusion, entrepreneurship development, and good agricultural practices, to name just a few aspects of this increasingly multifaceted project that delivers benefits at grassroots. ‘A breath to the ocean’ looks at restoration of mangroves, coral replanting and turtle conservation to support life below water. ‘Gasai Mamai Pubudu Pothai’ (The Tree, Me and My Savings Book) inculcates awareness of the importance of nurturing trees in the next generation. Environment restoration projects undertaken by the bank include the Kanneliya and Udawalawe forest restoration projects as well as the Mangrove Restoration Project in Anawilundawa Ramsar Wetland, reflecting our commitment to the environment.
Investing in the future
We continue to invest in our people, supporting their career progression through focused training while also implementing initiatives to support their health and well-being, including their mental wellbeing. Over 16 programmes were implemented for health and well-being covering over 23 percent of employees. The renewed focus on training resulted in an average of 45 hours of training per employee and 98.5 percent coverage of employees. We promoted 458 employees during the year to meet the business needs of a bank in a growth phase. The bank’s retention rate of 96.8 percent and the return-to-work rates after maternity leave stand testimony to our holistic employee value proposition.
Sri Lanka had a strong start for 2025 with a convergence of positive factors. Political stability, an improved sovereign rating, growth in trade, tourism and remittances together with improved business confidence augur well for the country’s ability to reach the forecasted GDP growth of approximately five percent in 2025. The banking sector is expected to be a catalyst and a beneficiary of the improved prospects for the country.
The multi-pronged strategy for growth described above will guide our quest to be the best bank in the country. We remain confident about realising our aspirations as we build on solid foundations with a motivated team.