Samba Bank - profits soar

It may well be small, but Samba Bank still managed to post decent profit growth in 2016. Sambas balance sheet for the first time crossed Rs100 billion mark growing substantially over 2015. The route to profit growth seems a familiar one. Samba continued to park sizeable assets in risk-free sovereign government securities, and enjoyed the returns.

Recall that the interest rates had slid to record low during the year, and yields on earning assets were under pressure across the industry. Advances, also picked up considerably by 19percent over 2015. But the growth in advances was outpaced by that in investments, which soared by 28 percent over 2015 standing at Rs57 billion.

The IDR continues to be on the higher side at 113 percent, while the ADR slipped slightly to 57 percent. Details of NPLs are not known yet, but significantly higher provisioning expenses for the year took the sheen off of an otherwise commendable topline growth.

Samba has worked aggressively on increasing its deposit base, which grew by a massive 30 percent over 2015, crossing Rs50 billion. Similar sized banks have had troubles with CASA ratio, but Samba seems to have done well on that front, of late. Deposit breakdown is not known yet, but trends show that Samba is moving in the right direction on the liability front. That said, it will take some doing for Sambas CASA to be anywhere near its bigger counterparts.

The non-core income continued to provide able support to the bottomline. Decent growth was witnessed in in all areas of non-funded income including fee, commission, foreign currency dealing, and the trades in debt as well as equity securities. Samba also did exceptionally well to keep a check on administrative expenses, further improving the cost to income ratio.