Sampath Bank reported a Profit After Tax of Rs 16.6 billion for the six months ended June 30, 2026, marking a 13% year-on-year increase as stronger core income and loan growth supported earnings despite higher impairment charges.
Sampath Bank delivers 13% profit growth amid strong lending and income expansion
The bank recorded Total Operating Income of Rs 63.3 billion during the first half, representing a 17% increase from the corresponding period of 2025. Net Interest Income rose 11% to Rs 42.8 billion, while Net Fee and Commission Income increased 26% to Rs 12.2 billion.
The growth in core banking income was supported by continued expansion of the lending portfolio and stronger transaction activity. Total Interest Income increased 9% to Rs 97.8 billion, while interest expenses rose 8% to Rs 55.1 billion as the bank expanded its deposit base and took on additional borrowings to support accelerated credit growth.
The resulting improvement in net interest income also helped strengthen the bank’s margin position. Net Interest Margin increased to 4.21% from 4.11% in 2025, reflecting improved yields on advances and favourable movements in market interest rates. The performance indicates that the bank was able to preserve its core earning capacity while expanding its balance sheet.
Non-fund-based income was another significant contributor to the results. The category increased 30% year-on-year to Rs 20.5 billion, supported by higher fee and commission income and a substantial increase in foreign exchange-related earnings. Total Exchange Income rose 198% to Rs 7.2 billion, with the bank attributing the increase partly to the Rs 26.12 depreciation of the Sri Lankan rupee against the US dollar during the period and higher foreign exchange transaction volumes.
However, the earnings performance was affected by a substantial increase in impairment charges. Sampath Bank recognised Rs 5.0 billion in impairment during the first half, compared with Rs 1.2 billion a year earlier. The increase primarily reflected higher collective impairment provisions linked to the rapid expansion of the loan portfolio and additional provisions maintained against macroeconomic and geopolitical risks.
Impairment charges on loans and advances increased to Rs 5.3 billion from Rs 1.4 billion. The bank said the increase was consistent with its prudent provisioning approach, particularly as the lending portfolio expanded by 18% during the period. It also recognised additional management overlay provisions and reviewed selected higher-risk exposures as part of its forward-looking credit risk management.
Despite the higher provisioning requirement, asset quality remained resilient. Gross loans increased by Rs 226 billion from the end of 2025 to Rs 1.449 trillion at June 30, while the Stage 3 portfolio declined by Rs 10.8 billion. The Stage 2 portfolio increased by Rs 36.8 billion, partly reflecting proactive reclassification of selected exposures following a comprehensive review of credit risks.
The bank also recovered Rs 572 million from written-off customers during the first half, compared with Rs 216 million in the corresponding period of 2025.
Quarterly performance showed further momentum. Profit After Tax increased 69% compared with the preceding quarter, supported by a 22% increase in Total Operating Income and an 89% reduction in impairment charges. The latter was helped by an impairment reversal exceeding Rs 3 billion following the recovery of long-outstanding loans.
The balance sheet continued to expand alongside the growth in lending. Total assets increased 8% from the end of 2025 to Rs 2.13 trillion, while total liabilities rose 8% to Rs 1.95 trillion. Customer deposits increased by Rs 118 billion to Rs 1.76 trillion, with both rupee and foreign currency deposits contributing to the expansion.
Operating expenses increased 21% year-on-year as the bank invested in technology, human capital, distribution capacity and business expansion. Consequently, the Cost-to-Income Ratio increased to 41.7% from 40.0% in the previous year. The bank said these investments are intended to strengthen operational capacity and support longer-term growth.
Sampath Bank maintained capital and liquidity levels above regulatory requirements. At June 30, its Common Equity Tier 1 and Tier 1 capital ratios stood at 13.21%, while the Total Capital Ratio was 15.62%. The bank also reported an All-Currency Liquidity Coverage Ratio of 185.04% and a Net Stable Funding Ratio of 157.38%, both comfortably above the 100% regulatory minimum.
Further strengthening its capital position, the bank successfully issued a Rs 10 billion Basel III-compliant Green Bond in July 2026. The issue was oversubscribed, indicating strong investor interest in the bank’s financial position and sustainable finance strategy.
At group level, the Sampath Group recorded Profit Before Tax of Rs 26.6 billion and Profit After Tax of Rs 17.9 billion for the first half of 2026.
Beyond financial performance, the bank continued its community and sustainability initiatives. These included the restoration of Hurigaswewa Wewa in Anuradhapura, benefiting 307 farming families, as well as household waste management programmes and agricultural entrepreneurship initiatives in several rural communities.
The first-half results position Sampath Bank as one of the institutions benefiting from renewed credit demand while maintaining a cautious approach to risk. Strong lending, improving core income and resilient asset quality supported profitability, while higher provisioning and operating costs reflected the bank’s continued focus on strengthening its balance sheet and capacity for sustainable growth.