Propelling a nation towards sustained growth

Sri Lanka rebounded from a huge economic crisis due to timely measures. Sampath Bank led the post-crisis recovery with strategic lending, SME support, digital innovation and community initiatives

Colombo, Sri Lanka 

The year 2023 will be remembered as a period of great transformation for Sri Lanka as the nation embarked on the arduous journey of rebuilding from the ground up following its worst-ever economic crisis in 2022. Well-timed macro prudential measures implemented by the authorities, including the normalisation of monetary policy and the relaxation of import restrictions, saw the resurgence of all major economic sectors in the latter part of the year. Other key indicators, such as the progressive easing of inflationary conditions, strengthening foreign reserves and stability of the exchange rate in 2023, also provided further assurances regarding the improving health of the Sri Lankan economy.

Skillfully manoeuvring to the cyclical shifts in the broader economic landscape, the local banking sector remained at the forefront of the country’s economic expansion. However, having been subjected to prolonged economic shocks in recent years, it became increasingly clear that the banking sector was strained to the limit and unable to withstand further pressures.

Against this backdrop, the foresight exhibited by the government, the regulator and the International Monetary Fund in shielding the banking sector during the Domestic Debt Optimisation (DDO) programme is indeed commendable. Excluding the banking sector from the domestic debt restructure has helped to preserve the capital adequacy of banks, and been instrumental in empowering the sector to drive credit expansion in order to fuel post-crisis rejuvenation.

Drawing from past experiences, Sampath Bank opted for a cautious approach to credit expansion, with lending activities undertaken mainly on high-priority and systemically important sectors outlined in the national development agenda. Significant accomplishments in this regard include the funding of a 15 MW wind power project and the involvement in a syndication to finance Sri Lanka’s largest ground-mounted solar project to date – a 100 MW endeavour slated to begin in the first quarter of 2026.

Targeted campaign
Considering that the SME segment remains the backbone of the Sri Lankan economy and its resurgence is vital for sustained GDP growth, a targeted campaign was initiated to cautiously support SMEs operating in the tourism and export-orientated manufacturing sectors via the concessionary credit lines issued by the Central Bank, the Ministry of Industries as well as the special Asian Development Bank (ADB) credit line. To complement these efforts, the bank unveiled ‘Sampath Export Partners,’ a dedicated unit to assist export-orientated SMEs and start-ups with export-related documentation as well as to enable them to access market information and business networking opportunities. Meanwhile, recognising the lack of financial maturity within the SME sector, specialised advisory services were further enhanced with the bank’s Credit Nursing Unit (CNU), entrusted with the responsibility of instilling greater financial discipline among SME customers.

Sampath Bank’s trade facilitation services were significantly expanded in 2023

At the same time, responding proactively to the country’s need to boost trade, Sampath Bank’s trade facilitation services were significantly expanded in 2023, while ties with global partner networks were further strengthened to aid in Sri Lanka’s push to rebuild global trade links that were compromised during 2022.
Sampath Bank further reinforced its digital superiority in 2023, with the launch of several industry firsts, among them the groundbreaking new interface to enable remote accounts opening via QR for the first time in Sri Lanka. Another major development that proves Sampath Bank’s desire to leverage technology to benefit the nation and its people was the historic partnership with UNICEF – Sri Lanka, wherein Sampath Bank was appointed as the ‘Facilitating Bank’ for the distribution of funds to mothers from low-income families and caretakers with young children facing challenges in accessing proper nutrition and healthcare services amid the prevailing economic crisis in Sri Lanka.

Flagship initiative
The bank continued to demonstrate its concern for the underserved community through its flagship community initiative – the ‘Wewata Jeewayak’ tank restoration programme. The year 2023, which marked the 23rd year of operation for the Wewata Jeewayak programme saw the bank deepening its investment with a total of five new projects being undertaken – the highest number in a single year. Hand in hand with these efforts, the bank’s long-standing oceanic ecosystem restoration campaign – ‘A Breath to the Ocean’ – was further expanded to focus specifically on turtle conservation and coral restoration.

In 2023, Sampath Bank garnered several prestigious awards, solidifying its position as a leader in the banking sector. Internationally, it was recognised as the ‘Best Bank in Sri Lanka’ at the Euromoney Awards for the fifth time, and at the Asiamoney Best Bank Awards, it secured honours for ‘Best Bank for CSR, Sri Lanka’ and ‘Best Bank for ESG, Sri Lanka.’ Domestically, Sampath Bank was lauded as the ‘Most Loved Banking Brand’ and ranked in the top 10 ‘Most Loved Brands’ at the LMD’s Brand Annual Awards 2023.

In 2023, Sampath Bank became a signatory to the United Nations Global Compact

The bank’s prowess in banking technology was acknowledged at the LankaPay Technnovation Awards, where it received a Gold Award for Financial Institution of the Year for the ‘Best Digital Payment Strategy’ and several Silver and Bronze accolades for its digital payment strategies and customer convenience initiatives. At the Infosys Finacle Innovation Awards, Sampath Bank shone, winning Platinum for innovative solutions like the ‘Tourist Fuel Pass,’ ‘Export Repatriation Process’ and ‘Touchless Cash Withdrawal,’ and Gold for its ‘Moratorium Process.’ These awards underscore Sampath Bank’s commitment to excellence and innovation across various banking domains, both nationally and internationally.

In 2023, Sampath Bank became a signatory to the United Nations Global Compact (UNGC), thereby formalising its commitment to support the UNGC’s 10 universally accepted principles in areas such as governance, human rights, labour, environment, and anti-corruption, by undertaking to integrate them into the bank’s policies and practices, and in doing so contributing towards the UNGC vision to promote responsible business conduct and address pressing global challenges.

Structures strengthened
Meanwhile, faced with the risk of employee attrition in 2023 as the economic crisis-induced pressures gave rise to skilled migration out of the country, Sampath Bank moved swiftly to retain key personnel. Remuneration structures were further strengthened and the succession-planning programme revamped to focus on targeted talent development for middle management and executive grades, supported by extensive training and knowledge-sharing workshops to address persistent skill gaps. Coaching and mentoring initiatives were further intensified, enabling identified high performers to be offered promotions and job rotation assignments to inspire them to advance their career journeys within the bank.

Despite internal and external challenges, Sampath Bank delivered a strong financial performance for FY 2023, recording a total operating income of Rs91bn ($281m) for the year. A key achievement in the current financial year was the 68 percent reduction in impairment charges attributed to the combined impact of improving economic conditions as well as the buildup of additional provision coverage. This was the result of prudent provisioning strategies adopted in 2022 to account for risk elevated exposures within the bank’s loan and advances portfolio.

Buoyed by the substantial reduction in collective impairment charges, Sampath Bank’s net operating income shot up to Rs70.8bn ($219m) in the year under review, substantially higher than the Rs48.2bn ($132m) recorded in the previous financial year. And despite inflation-induced high operating costs, the bank’s profit before taxes (PBT) expanded by 98 percent year-on-year. Sampath Bank’s balance sheet position further strengthened in FY 2023, marked by 16.4 percent improvement in the asset base. The bank closed the current financial year recording strong improvements across all capital ratios, while improved profitability during the current financial year helped to bolster the bank’s total equity to Rs148bn ($456m) as of December 31, 2023.

Through the commitment to prioritise the wellbeing of stakeholders, while consistently delivering strong financial results, Sampath Bank has yet again proven its unending commitment to support Sri Lanka and its people in their path to economic empowerment.