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Commercial Bank, the bank with the most assets in the private sector and  Sampath Bank, Sri Lanka’s third largest lender both recorded robust earnings  in the 1st quarter of 2021. 

Commercial Bank managed to record earnings of LKR 5.65 per share or LKR  6.75 billion in the first three months. This is a significant increase when  compared to the previous year which recorded earnings of LKR 3.66 per share  or LKR 3.77 billion. On the other hand Sampath Bank managed to record  earnings of LKR 4.46 per share or LKR 5.1 billion. This is seen as a 90.7%  increase in earnings compared to the previous year which recorded earnings of  2.7 billion with the price of LKR 2.34 per share.  

Commercial Bank and Sampath Bank respectively provided for 7.16 billion and  1.6 billion in the first quarter on possible losses from loan defaults and other  financial assets. This was seen as a 7.56% increase for Commercial Bank when  comparing the values for the same time period the previous year.  

While Sampath Bank showed an improvement in asset quality Commercial Bank  experienced a decrease in the same category from 5.11% to 4.94% at the end of  2020. This can be the result of the 5.92% gross non-performing loss ratio  experienced by Sampath Bank while Commercial bank showed reserved results.  

However Commercial Bank managed to record LKR 15.48 billion in net interest  income which is considered as a 21% increase compared to the previous year  while Sampath Bank showed a decrease of net interest income from LKR 10.8  billion to 10.2 billion. Both banks experienced increases in net interest margins  from 3.17% to 3.46% being recorded in Commercial Bank while Sampath Bank  recorded from 3.30% to 3.35%.  

Much of the increase in revenue can be attributed to the rebound of economic  activities following the ease of pandemic restrictions in January 2021. Working  Capital Loans and Term Loans showed significant improvements while a renewed  sense of optimism was shown towards housing loans. However despite the recent  improvements with the pandemic threat catching pace once again experts  conclude that the banking sector is not out of the woods and there are more  challenges to be faced.