Sampath Bank

True strength is derived through decades of experience, dedication, skill, and
application — and over the years, Sampath Bank has continued to harness
vast stores of knowledge that enable us to mitigate uncertainty and launch
into the unknown. Our adoption of expert practices, sound risk management
and flexible, agile thinking remain the underlying factors behind our
continued stability and success.
The strong partnerships we have built over time empower us to advance

against the challenges that lie ahead. In sharing our years of knowledge,
insights, and capabilities among our valued stakeholders, we continue to
be an entity that embodies trust, while ensuring continuity and progress in
the years ahead. Our collective strength yields an abundance of courage and
resilience that enables us to fulfil our aspirations and face the future.
Together, we represent strength in motion.
Trapeze artists utilise years of training and technical know-how to build flexibility
and strength. The admirable levels of courage, precision and trust they display in
their performances are a true testament to the value of partnership, knowledge
and dedication exhibited at every stage of their journey. Their story is detailed in
the pages that follow.
2
CONTENTS
About the Report.......................................................................................4 MANAGEMENT DISCUSSION AND ANALYSIS
ABOUT Operating Environment ....................................................................... 74
About the Bank....................................................................................... 10
Capital Management Reports
Financial Highlights................................................................................ 14
Financial Capital ..................................................................................... 79
Non-Financial Highlights....................................................................... 16
Manufactured Capital............................................................................ 85
ESG Scorecard......................................................................................... 18
Intellectual Capital.................................................................................. 94
Key Events 2022...................................................................................... 19
Human Capital.......................................................................................101
Product Portfolio.................................................................................... 20
Social and Relationship Capital.........................................................114
Key Historical Milestones...................................................................... 24
Natural Capital.......................................................................................132
HEAR FROM OUR LEADERS
Business Reports
Chairman’s Message.............................................................................. 30
Consumer Banking...............................................................................150
Managing Director’s Review ................................................................ 34
Deposits..............................................................................................150
STRATEGY REPORT Loans and Advances.......................................................................151
Strategic Themes.................................................................................... 44 Cards...................................................................................................152
Our Approach Towards Sustainability............................................... 48 Bancassurance.................................................................................153
Our Value Creating Business Model.................................................. 56 Corporate Banking...............................................................................154
Material Topics ....................................................................................... 58 Corporate Credit..............................................................................154
Connecting with Our Stakeholders .................................................. 62 Corporate Finance...........................................................................155
Our Sustainability Journey.................................................................... 70 Foreign Currency Banking Unit.....................................................156
SME Banking..........................................................................................157
30
Global Banking......................................................................................158
International Trade..........................................................................158
Bank Notes Operation....................................................................158
Remittance.........................................................................................159
Page Nostro Accounts, Correspondent Banks and Exchange

Companies....................................................................................160
Treasury..................................................................................................161
Operational Support ...........................................................................162
Chairman’s Message
34
Network Services Centre................................................................162
Central Cash Department..............................................................162
Recoveries..........................................................................................162
Performance of Subsidiaries
Page Sampath Centre Limited.....................................................................164

SC Securities (Private) Limited...........................................................164
Siyapatha Finance PLC........................................................................165
Sampath Information Technology Solutions Limited..................165
Managing Director’s Review
Financial Capital Manufactured Capital Intellectual Capital
Page 79 Page 85 Page 94
SAMPATH BANK PLC - Annual Report 2022

3
View this Annual Report Online View Highlights of this Annual

https://www.sampath.lk/en/ Report in Video Form
investor-relations/annual-reports https://www.sampath.lk/common/
AR2022/ar2022.mp4
GOVERNANCE AND RISK MANAGEMENT SUPPLEMENTARY INFORMATION

Corporate Governance Statement of Profit or Loss in US$...................................................412
Chairman’s Introduction to Corporate Governance....................168 Statement of Comprehensive Income in US$...............................413
Corporate Governance Report.........................................................170 Statement of Financial Position in US$...........................................414
Corporate Governance Compliance Disclosure...........................179
Ten Years at a Glance..........................................................................415
Governance Structure.........................................................................180
Quarterly Statistics...............................................................................417
Board of Directors................................................................................182 Investor Information............................................................................419
Corporate Management.....................................................................186 Economic Value Addition....................................................................430
Committee Reports Corporate Governance
Board Audit Committee Report........................................................190 Compliance with Governance Directions and Codes.............432
Board Human Resources and Remuneration Basel III Disclosure Requirements....................................................467
Committee Report.......................................................................194 Detailed Material Topics.....................................................................477
Board Nomination Committee Report............................................196
GRI Content Index................................................................................497
Board Integrated Risk Management Committee Report............198
Independent Assurance Report to the Board of Directors of
Board Related Party Transactions Review
Committee Report.......................................................................201 Sampath Bank PLC in the Integrated Annual Report 2022....503
Compliance Report..............................................................................203 Sampath Bank PLC on the Sustainability Reporting Criteria
Risk Management Report ..................................................................204
Presented in the Integrated Annual Report 2022.....................506
FINANCIAL INFORMATION Glossary of Financial and Banking Terms.......................................508
Financial Calendar ...............................................................................220 Acronyms and Abbreviations ...........................................................512
Annual Report of the Board of Directors on the Affairs of the Notice of Annual General Meeting...................................................515
Company .....................................................................................221
Notes.......................................................................................................516
Directors’ Interest in Contracts with the Bank..............................231
Stakeholder Feedback Form..............................................................517
Directors’ Statement on Internal Control Over Financial
Reporting.......................................................................................232 Corporate Information........................................................................519
Independent Assurance Report to the Board of Directors of Form of Proxy
14
Sampath Bank PLC......................................................................234
168
Managing Director’s and Chief Financial Officer’s Financial Highlights Corporate Governance
Responsibility Statement...........................................................235
Statement of Directors’ Responsibility for Financial
Reporting.......................................................................................237
Independent Auditors’ Report to the
Shareholders of Sampath Bank PLC.......................................239
Risk Management
204
Financial Statement Highlights..........................................................243
244
Financial Statements
Statement of Profit or Loss................................................................244
Statement of Comprehensive Income............................................245
Statement of Financial Position........................................................246
Investor Information
419
Statement of Changes in Equity........................................................248
Statement of Cash Flows....................................................................250
Notes to the Financial Statements...................................................253
Human Capital Social and Relationship Capital Natural Capital

Page 101 Page 114 Page 132
Annual Report 2022 - SAMPATH BANK PLC

4
ABOUT THE REPORT
GRI 2-3,4
Report Profile
Sampath Bank PLC’s 2022 Integrated Annual Report is intended to provide its stakeholders with
a clear understanding of the Bank’s value creation initiatives undertaken during the financial year 2022.
Towards this end, the report covers the most relevant and material information of the Bank’s business
QR
strategy and performance, and provides information about financial and non-financial performance
for the financial year; 1st January 2022 to 31st December 2022.
This is the 9th Integrated Annual Report released by Sampath Bank PLC since the Bank began its
integrated reporting journey in 2014. All previous integrated reports including the most recent
report for the financial year 2021 are available for viewing and downloading on the corporate
website - www.sampath.lk. There are no restatements pertaining to any of these previous reports.
Our Reporting Frameworks and Suite
Integrated � The International Integrated Reporting Framework of the International Integrated

Reporting Reporting Council (IIRC).
� Global Reporting Initiative (GRI) standards - ‘In Accordance with the GRI Standards’, issued
by Global Sustainability Standards Board.
Sustainability � Guidelines on Environmental, Social and Governance (ESG) Reporting issued by the
Reporting Colombo Stock Exchange (CSE).
� United Nations Sustainable Development Goals (SDGs).
� Banking Act Direction No. 05 of 2022 on Sustainable Finance Activities of Licensed Banks.
� Sri Lanka Accounting Standards issued by the Institute of Chartered Accountants of

Sri Lanka.
Financial � Companies Act No. 07 of 2007 and amendments thereto.
Reporting
� Banking Act No. 30 of 1988 and amendments thereto.
� Listing Rules of the Colombo Stock Exchange (CSE).
� Code of Best Practice for Corporate Governance issued by the Institute of Chartered
Accountants of Sri Lanka.
� Banking Act Direction No. 11 of 2007 on Corporate Governance for Licensed Commercial
Governance, Banks in Sri Lanka, issued by the Central Bank of Sri Lanka and any amendments thereto.
Compliance and
� Banking Act Direction No. 01 of 2016 on Capital Requirements under Basel III and
Risk Reporting
amendments thereto.
� Banking Act No. 30 of 1988 and amendments thereto.
� Companies Act No. 07 of 2007 and amendments thereto.
� Listing Rules of the Colombo Stock Exchange (CSE).

5
GRI 3-1
Scope and Boundary
The report boundary governance and sustainability initiatives The report also includes financial
covers the core along with a brief outline of the future information on the Sampath Group,
banking activities of prospects to inform stakeholders about which is supported by an overview of the
Sampath Bank PLC, the progress made during the year and performance of the 4 subsidiaries within
including the the way forward. Information in this the Group - Sampath Centre Limited, SC
Consumer Banking regard has been obtained through Securities (Pvt) Limited, Siyapatha
and Corporate Banking interviews with Corporate/Senior Finance PLC and Sampath Information
pillars, the Global Business segment as Management and from respective unit Technology Solutions Limited for the
well as our Treasury activities. The report heads and further supported by inputs period under review.
showcases both financial and non- from other internal data sources and
financial aspects of the Bank’s where relevant any external research
performance, including value creation reports. All such external sources have
principles, strategy, business model, risk, been quoted.
Our Integrated Reporting Boundary
Our Strategy and Material Opportunities

Governance
Value Creation Business Model Topics and Risks
Our Financial Reporting Boundary
Sampath Bank’s Business Activities Subsidiaries’ Business Activities
Our Stakeholder Engagement
Shareholders Suppliers and

Regulatory
and Other Community Customers Employees Service
Bodies
Investors Providers
Target Audience Materiality GRI 3-1 the Bank’s strategy in order to drive
This report is intended to meet the The Bank accepts that the principle of organisational value and deliver
information requirements of the Bank’s Materiality (as defined by GRI) is a vital stakeholder expectations. In doing so, the
key stakeholders and potential future business tool that facilitates integrated Bank applies the precautionary principles
long term investors. It also aims to shed thinking. Hence the materiality to address the impact on society and the
light on the Bank’s various efforts to create determination process has been used as environment caused by its operations and
value for employees, customers, investors, the basis to determine the scope and scale to facilitate appropriate corrective action
suppliers, regulators and the wider of information to be included in this report. to mitigate any potential negative impacts.
community. On this basis, a new Material Topic –
The Materiality section on pages 58 to 61 ‘Macroeconomic Headwinds’ was identified
describes how Material Topics are in 2022 and incorporated into the current
identified, assessed and incorporated in report content.

6
ABOUT THE REPORT
Governance and Risk Management

Sampath Bank’s integrated approach to governance and risk management is reflected throughout the report, while a more detailed
account of the Bank’s governance and risk management infrastructure and activities for 2022 are captured through the Corporate
Governance Report (pages 168 to 181 and 432 to 466) and respective Board Sub-Committee Reports (pages 190 to 202) and the Risk
Management Report on pages 204 to 217.
Sustainability and ESG Reporting
Since commencing its sustainability reporting journey over a decade ago, the Bank has made some notable strides in
advancing its reporting frameworks to demonstrate greater transparency in the disclosure of non-financial information.
Keen to benchmark reporting best practices, the Bank has been reporting on its contribution to the United Nations (UN)
Sustainable Development Goals (SDGs) to showcase the commitment to prioritise Environmental, Social, Governance (ESG)
aspects alongside the core business activities in the day-to-day operations of the Bank.
2011 2012 2013

Stand-alone Report Incorporated in Stand-alone Report
GRI 3.1 Level B Annual Report GRI G4 -
External Assurance GRI 3.1 Level B Comprehensive
Provided External Assurance External Assurance
Provided Provided
2014 - 2016
Integrated Report
GRI G4 -
Comprehensive
External Assurance
Provided
2017 - 2021
Integrated Report
GRI Standards -
2022
Comprehensive Integrated Report
External Assurance In Accordance with the GRI Standards
Provided External Assurance Provided
Reporting Best Practices Implemented in the Financial Year 2022 Integrated Annual Report
� Early adoption of GRI new standards.
� External Assurance from Messrs Ernst and Young, Chartered Accountants to validate adherence with the International
Integrated Reporting Council (IIRC) <IR> Integrated Reporting Framework.
� Compliance with the reporting requirements of the Banking Act Direction No. 05 of 2022 on Sustainable Finance Activities
of Licensed Banks (discussed under Our Approach Towards Sustainability on pages 48 to 55).

7
Value Creation Forward-Looking Statements Disclaimer - Sampath Bank PLC considers

This report includes forward-looking all such forward-looking statements to be
Value creation remains the axis on which
statements, which relate to the possible applicable only as at the date of publication
the Bank’s strategy and operational
future financial position and results of the of this Integrated Annual Report and as
architecture revolves on. The Business
Bank’s operations. These statements by such does not accept any obligation to
Model presented on pages 56 and 57
their very nature involve an element of risk revise or in any way update information
describes the linkages between the various
and uncertainty, as they relate to events expressed in such forward-looking
value creation components and their
and depend on circumstances that may or statements.
collective contribution towards generating
positive stakeholder outcomes. may not occur in the future.
GRI 2-5 Board Responsibility Statement

Combined Assurance
The information captured in the report The Sampath Bank PLC Board of Directors acknowledges its responsibility for
has been obtained from various sources ensuring the integrity of this integrated report and considers the preparation and
within the Bank. All content disclosed presentation of the report to be in accordance with the International <IR> Framework.
herein has been first verified for Thereby the Board confirms that the Report;
completeness, balance, comparability,
accuracy, reliability, timeliness and clarity � Offers a balanced view of Sampath Bank’s strategy and how it relates to the
in line with Sampath Bank’s general Bank’s ability to create value in the short, medium and long-term.
disclosure policies. This is done using a
� Addresses all matters material to stakeholders by incorporating such matters
combination of internal controls,
into the strategic decision making process in order to create value over time.
management assurance and routine due
diligence activities. � Explains the optimal use of the six capitals and how their availability has
impacted our strategy and business model.
The mandatory independent review of the
financial statements has been provided by
external auditors - Messrs Ernst and How to Navigate through this Report
Young, Chartered Accountants. Their
opinion is given in pages 239 to 242. Matters of Interest to Where to Find it in This Page Reference
Stakeholders Report
The Bank has appointed Messrs Ernst and
Young, Chartered Accountants to provide How we bring our vision to life Strategy and Business Model 56 - 57
independent assurance reports in the
following areas as well; Our leaders’ views Chairman’s Message 30 - 33
Managing Director’s Review 34 - 41
� Independent assurance statement
with regard to Sampath Bank’s Delivering on our strategy Capital Management Reports 79 - 147
adherence to the GRI Standards Business Reports 148 - 163
(pages 506 and 507).
How our business is governed Corporate Governance Report 168 - 181 / 432 - 466
� Independent assurance statement and managed Compliance Report 203
with regard to Sampath Bank’s Risk Management Report 204 - 217
adherence to the International
Integrated Reporting Framework Measuring our success Financial Information 219 - 409
(pages 503 to 505).
Financial Capital Manufactured Capital Intellectual Capital
� Independent assurance statement on
Pages 79 - 84 Pages 85 - 93 Pages 94 - 100
the Directors’ Statement on Internal
Control over Financial Reporting (page
Social and
234). Human Capital Natural Capital
Relationship Capital
Pages 101 - 113 Pages 114 - 131 Pages 132 - 147
Feedback GRI 2-3,25

The Bank welcomes feedback and queries regarding this report and encourages readers to use the Feedback Form on pages 517
and 518 to submit their comments regarding the Bank’s Integrated Annual Report 2022.

The journey of a typical
trapeze artist begins
with them perfecting
their fundamentals –
once the desired levels
of proficiency are
achieved on the ground,
they are able to reach
new heights.
F U N DA M E N TA L S I N
POSITION
ABOUT
Since inception, we refined and honed our skills to create a solid foundation; setting the
stage upon which we would build our progress in the years ahead.
About the Bank.......................................................................................

Bank....................................................................................... 10
Financial Highlights................................................................................
Highlights................................................................................ 14
Non-Financial Highlights.......................................................................
Highlights....................................................................... 16
ESG Scorecard.
Scorecard......................................................................................... 18
Key Events 2022.
2022...................................................................................... 19
Product Portfolio....................................................................................
Portfolio.................................................................................... 20
Key Historical Milestones.
Milestones...................................................................... 24
10 ABOUT HEAR FROM OUR LEADERS STRATEGY REPORT
ABOUT THE BANK
GRI 2-1,6
Sampath Bank PLC is one of Industry Standing
the leading private banks in
Sri Lanka offering the full
Sampath Bank’s island-wide The Bank’s loans and advances The Sampath Bank share was
gamut of modern banking
network of 229 branches is the portfolio indicates a CAGR of one of the most robustly
products and services for
third largest among private 10.0% for the period of traded among immediate
Corporates, SMEs (Small and
banks in Sri Lanka. The Bank 2017 - 2022, compared to the peers and reached the highest
Medium-sized Enterprises)
also holds the distinct honour industry CAGR of 12.0%. trading price of Rs 56.50 in
and Retail customers. The
of having the country’s Available data for financial year January 2022. The closing price
principal activities of the
largest agent banking (FY) 2022 suggests that of the Sampath Bank share as
Bank include, accepting
network and takes pride in Sampath Bank accounted for at 31st December 2022 was
deposits, corporate and retail
its industry-leading digital approximately 8.1% of the Rs 34.20 resulting in market
lending, project financing,
footprint. These physical and Banking Sector loans and capitalisation of Rs 39 Bn, the
trade financing, treasury and
digital touch-points collectively advances. second highest recorded in the
investment services, issuance
serve 3.3 Mn+ individuals and banking sector for 2022.
of local and international
businesses around the country. The Bank’s loans to deposits
credit and debit cards,
ratio has been over 83% for the With 3,948 employees,
offshore banking, resident
Sampath Bank stands as the past five consecutive years, Sampath Bank is also one of
and non-resident foreign
third largest private bank in the underscoring a solid balance the largest employers in the
currency operations,
country in terms of assets and between assets and liabilities. local banking sector.
electronic banking services
lending. The Bank’s total assets Having always prioritised CASA
such as telephone banking,
as at 31st December 2022 (Current Accounts and Savings
internet banking, mobile
reached Rs 1.3 Tn, with asset Accounts) growth, the Bank has
banking, payment gateway
growth for the period of succeeded in maintaining its
facilities, inward and outward
2017 - 2022 showing a CAGR CASA ratio at an average of
remittance facilities,
(Compound Annual Growth 37%+ over the past five
pawning, gold loans, leasing,
Rate) of 10.7% compared to years, well above the industry
factoring, travel related
the industry CAGR of 13.5% for trend for the same period.
services and dealing in
the same period.
government securities etc.
229 363 360 98 1,338

Branches Automated Teller Cash Deposit Cash Recycler eZ Agent Banking
Machines (ATM) Machines (CDM) Machines (CRM) Network
19 25+ 37 609 121 3,948

Digital Banking Digital Banking Nostro Accounts Correspondent Exchange Employees
Centres Solutions Banks Companies
3.4 Mn+ 3.3 Mn+ 11,000+ 60,000+ Millions of

Foreign Currency
Unbanked/
Underbanked
Retail Customers SMEs Corporates Remitters Communities
Total Customers

MANAGEMENT DISCUSSION GOVERNANCE AND SUPPLEMENTARY 11
FINANCIAL INFORMATION
AND ANALYSIS RISK MANAGEMENT INFORMATION
Origin Story Industry Transformation
Sampath Bank was incorporated on 10th as a Licensed Commercial Bank under the Since opening its doors to the public, Sampath
March 1986 under the Companies Act No. Banking Act No. 30 of 1988. The Bank was Bank has been credited with many firsts that
have often been responsible for elevating the
17 of 1982 and commenced operations re-registered on 28th April 2008 under the
local banking sector on par with global
following the receipt of the certificate to Companies Act No. 7 of 2007. Sampath
standards.
commence business on 2nd April 1986. Bank Head Office has been located at
The Bank obtained a listing on the Colombo No. 110, Sir James Peiris Mawatha,
1988
Stock Exchange in 1987 and was registered Colombo 02, Sri Lanka.
The first bank in Sri Lanka to operate a
multi-point network of ATMs.
Capital and Liquidity
1989
Prudent capital planning strategies At the same time, the Statutory Liquid Introduced the Uni-banking system to
ensured Sampath Bank’s Tier I Capital Assets Ratio (SLAR) remained above the Sri Lanka for the first time.
Ratio and Total Capital Ratio stood at minimum requirement of 20%. Both
11.92% and 14.27% respectively as at 31st Liquidity Coverage Ratio (LCR) and Net 1997
December 2022, comfortably above the Stable Funding Ratio (NSFR) were also Pioneering launch of the DEBIT CARD in
regulatory minimum ratios of 8.5% and above the minimum requirements association with CIRRUS and MAESTRO
12.5% respectively. throughout FY 2022. - a first in South Asia.
2003
The first bank in Sri Lanka to offer “one
Investor Information day clearing” for all cheques drawn on
any Sampath Bank branch.
The top 5 shareholders of the Bank as at The Board of Directors of Sampath Bank
31st December 2022, comprised both has recommended a final dividend of 2011
institutional investors and individuals, Rs 4.60 per share (cash: Rs 3.45 and scrip: The first bank in Sri Lanka to introduce
namely Vallibel One PLC, Ayenka Holdings Rs 1.15) for the FY ended 31st December 365-day banking at Super Branches.
Private Limited, Employees’ Provident 2022 subject to the approval of the
Fund, Mr Y.S.H.I. Silva and Rosewood (Pvt) shareholders at the Annual General
2013
Limited, with shareholdings of 14.95%, Meeting to be held on 30th March 2023.
9.97%, 9.97%, 8.20% and 4.51% The dividend payout ratio for FY 2022 stood Pioneered the “Cardless Cash ATM” to
respectively from the total issued shares at 40.1% (2021: 39.0%). Sri Lanka.
of 1,144,373,955 as at the said date.
2016
Group Overview First bank in Sri Lanka to launch Visa
PayWave enabled cards.
The Sampath Bank Group comprises the addition to the Group Sampath Information
Bank and its four fully-owned subsidiaries Technology Solutions Ltd incorporated in 2018
- Sampath Centre Ltd set up in 1996 as a 2006 as a dedicated software development Launch of “Slip-less Banking” for the
company offering rentable commercial and IT solutions provider for corporates. first time in Sri Lanka.
spaces, SC Securities (Pvt) Limited
incorporated in 1992 as a stock broking The four subsidiaries collectively contribute 2021
company in Sri Lanka, Siyapatha Finance on average 4.1% to the annual group
Pioneered “Touchless Cash
PLC established in 2005 as a financial revenue. Withdrawals” from ATMs for the first
services institution and the most recent time in Sri Lanka.

ABOUT THE BANK
8.12% Sampath Bank PLC

(2021: 7.58%)
Market Share - Key Facts 2022

Loans and Advances
7.21%
(2021: 7.60%)
Market Share - Deposits
5.66%
(Industry: 4.00%)
Net Interest
Margin (NIM)
1.16% 14.27% 27.85% 4.35%

(Industry: 1.0%) (2021: 17.02%) (2021: 32.62%) (Industry: 6.5%)
Return on Assets Total Capital Adequacy Statutory Liquid Impaired Loans
before tax (ROA) Ratio (CAR) Assets Ratio (SLAR) (Stage 3) Ratio
Our Vision
The Growing Force
in Sri Lankan
Financial Services
Rs 34.20 Rs 39.1 Bn 13.45% Fitch Rating:

Current: National Long-Term
(2021: Rs 52.10) (2021: Rs 59.6 Bn) (2021: 8.16%) Rating of ‘A(lka)/Rating Watch
Market Price per Market Dividend Yield Negative’
Share Capitalisation [31st December 2022: ‘AA-
(lka)/Rating Watch Negative’]
0.31
(2021: 0.50)
Price to Book Value
10.95%
(Industry: 10.5%)
Return on Equity
after tax (ROE)
Rs 110.44
(2021: Rs 103.77)
Net Asset Value Per
Share
Our Values
� Create a learning culture that promotes individual and organisational development as well as
promoting innovation and value for customers.
� Treat all internal and external customers the way we would like to be treated.
� Encourage and promote teamwork in all aspects of behaviour.
� Open to feedback and demonstrate an eagerness for personal development.
� Monitor and demonstrate an impressive commitment to results.
� Uncompromising ethical and professional standards of behaviour.

FINANCIAL HIGHLIGHTS
GRI 2-6
Bank Group
2022 2021 Change % 2022 2021 Change %
Profitability (Rs Mn)

Gross income 197,571 104,570 88.9 206,002 113,075 82.2
Total operating income 110,954 58,488 89.7 114,768 64,399 78.2
Impairment charge 62,706 17,085 267.0 62,908 18,559 239.0
Operating expenses 28,048 20,668 35.7 29,888 22,719 31.6
Operating profit before taxes on financial services 20,200 20,735 (2.6) 21,971 23,121 (5.0)
Taxes on financial services 5,176 3,901 32.7 5,577 4,296 29.8
Profit before income tax 15,024 16,834 (10.8) 16,395 18,825 (12.9)
Income tax expense 1,890 4,376 (56.8) 2,334 4,969 (53.0)
Profit for the year 13,134 12,457 5.4 14,061 13,856 1.5
Assets and Liabilities (Rs Mn)
Deposits from banks and customers 1,103,213 978,368 12.8 1,122,269 994,740 12.8
Gross loans and advances 920,122 813,106 13.2 953,090 850,570 12.1
Total equity 126,380 118,752 6.4 135,551 127,186 6.6
Total liabilities 1,198,046 1,081,162 10.8 1,231,768 1,115,447 10.4
Total assets 1,324,426 1,199,913 10.4 1,367,320 1,242,633 10.0
Net asset value per share (Rs) 110.44 103.77 6.4 118.45 111.14 6.6
Market price per share (Rs) 34.20 52.10 (34.4)
Earnings per share - Basic/Diluted (Rs) 11.48 10.89 5.4 12.29 12.11 1.5
Total dividend per share (Rs) 4.60 4.25 8.2
Cash dividend per share (Rs) 3.45 4.25 (18.8)
Dividend cover (times) 2.50 2.56 (2.3)
Dividend payout ratio (%) 40.08 39.04 2.7
Gross dividend (Rs Mn) 5,264 4,864 8.2
Market capitalisation (Rs Mn) 39,138 59,622 (34.4)
Other Ratios
Return on average assets (before tax) (%) 1.16 1.44 (19.4) 1.23 1.56 (21.2)
Dividend yield (%) 13.45 8.16 64.8
Earnings yield (%) 33.57 20.90 60.6 35.94 23.24 54.6
Price earning ratio (times) 2.98 4.78 (37.7) 2.78 4.30 (35.3)
Price to book value (times) 0.31 0.50 (38.0) 0.29 0.47 (38.3)
Total impairment on loans as a % of gross loans and advances 11.84 6.21 90.7 11.87 6.44 84.3
Stage 3 impairment to Stage 3 loans ratio (%) 53.84 45.45 18.5
Impaired loans (Stage 3) ratio (%) 4.35 3.20 35.9
Cost of risk (%) 5.97 1.61 270.8 5.82 1.72 238.4
Cost to income ratio (excluding taxes on financial services) (%) 25.28 35.34 (28.5) 26.04 35.28 (26.2)
CASA ratio (%) 32.7 45.7 (28.4) 32.1 44.9 (28.5)
Loans to deposits ratio (%) 83.40 83.11 0.3 84.93 85.51 (0.7)
Leverage ratio (%) 7.00 7.80 (10.3) 7.29 8.08 (9.8)
Liquid assets ratio - Overall Bank (%) 27.85 32.62 (14.6)
Liquidity coverage ratio
- Rupee (%) 200.78 254.89 (21.2)
- All currency (%) 146.53 213.43 (31.3)
Net stable funding ratio (%) 157.10 149.92 4.8
Fitch Rating
- Current A(lka)/RWN AA-(lka)
- 31st December 2022 AA-(lka)/RWN (Stable)
Key Performance Indicators - Bank Goal 2022 2021 2020 2019 2018
Return on average assets (after tax) (%) Over 1.00 1.01 1.07 0.78 1.20 1.41
Return on average equity (after tax) (%) Over 16.00 10.95 11.05 7.58 11.78 16.02
Growth in profit (%) Over 15.00 5.43 55.23 (28.03) (8.17) 0.32
Growth in total assets (%) Over 15.00 10.38 8.07 15.37 5.26 14.98
Capital adequacy ratios (Basel III)
- Common equity Tier I (%) 2% buffer over the 11.92 13.95 13.44 14.22 12.08
- Total Tier I (%) regulatory minimum 11.92 13.95 13.44 14.22 12.08
- Total capital (Tier I + Tier II) (%) requirement 14.27 17.02 16.41 18.12 15.73

Composition of Total Operating

Total Assets & Gross Income Total Loans & Total Deposits Income 2022
Rs Bn Rs Bn Rs Bn % %
1,500 250 1,500 150
16.2
197.6
1,200 200 1,200 120
100.2
83.1 83.4
900 150 900 90
85.6
118.9
102.3 17.5
600 104.6 100 600 60
66.3
300 50 300 30
1,103
2020 1,110
2021 1,200
2022 1,324
720
718
759
887
813
978
920
2019 962
0 0 0 0
2022
2019
2020
2021
Total Assets Total Loans - Gross Net Interest Income
Gross Income (RHS) Total Deposits Net Fee & Commission Income
Loans to Deposits Ratio (RHS) Trading, Investment & Other
Operating Income
Composition of Total Expenses 2022 Operating Expenses & Cost to Income ROE & ROA
% Rs Bn % % %
40 60 12 2.0
1.9
5.3 1.66
30 45 9 1.5
1.44
64.1 36.9 43.5 35.3
1.09 1.16
20 30 6 1.0
25.3
28.7 10 15 3 0.5
2019 11.78
2021 11.05
2022 10.95
2020 7.58
2019 20.4
2020 20.1
2021 20.7
2022 28.0
0 0 0 0.0
Impairment Charge Operating Expenses ROE (after income tax)

Operating Expenses Cost to Income (RHS) ROA (before income tax) (RHS)
Taxes on Financial Services
Income Tax Expense
Rs 13.1 Bn Rs 73.5 Bn Rs 110.44

2022 2022 2022
Rs 12.5 Bn 2021 Rs 41.7 Bn 2021 Rs 103.77 2021
5.4% Profit After Tax 76.4% Net Interest Income 6.4% Net Asset Value Per Share

NON-FINANCIAL HIGHLIGHTS
GRI 2-6
Key Indicator Measurement 2022 2021 2020

Manufactured
Capital
Investment in property, plant and equipment Rs Mn 887 466 478
Digital Banking Centres Number 19 5 5
eZ Banking/MyBank Agents Number 1,338 206 203
Branches outside Western province Number 129 129 129

Intellectual
Capital Investment in IT software development Rs Mn 310 182 199
Rank of "Most Loved Brands" - LMD Brands Rank 11 7 10
Annual

Social and
Relationship Capital Beneficiaries of "Sampath Saviya" and other Number 4,067 2,263 672
entrepreneurship development programmes
Beneficiaries from the "Wewata Jeewayak" Number 4,370 4,372 1,640
programme
Intern and industrial placements intake Number 833 503 481
Interest on customer deposits Rs Bn 73.7 38.3 47.4

Total employees Number 3,948 4,013 4,048

Human Total training hours Hours 124,304 153,282 172,900
Capital Average training hours per employee Hours 31.5 38.2 42.7
Internal staff promotions Number 197 242 154
Staff retention ratio % 96 98 99
Return to work after maternity leave % 100 100 100
Industrial disputes Number Nil Nil Nil
Percentage of employees receiving % 100 100 100
performance appraisals
Female representation in corporate % 21 21 21
management
Gender diversity ratio (Male : Female) Ratio 65 : 35 66 : 34 66 : 34
Gross Income per employee Rs Mn 50.0 26.1 25.3
Profit per employee Rs Mn 3.33 3.10 1.98

Natural Capital
Carbon footprint of the Bank tCO2e 11,645 9,263 9,138
Electricity saving through solar power kWh 348,775 340,701 251,908
generation
Financing of renewable energy projects Rs Mn 5,576 4,550 1,358
Energy intensity ratio (Head Office) kWh 2,122 2,506 2,678
Trees planted through Environmental CSR Number 15,367 3,691 9,000
programmes
Trees saved through paper recycling Number 649 871 885
Trees saved through transactions done via Number 536 639 427
Cash Deposit Machines and Slipless Banking

ESG SCORECARD
� Launched “A Breath to the

ENVIRONMENTAL Ocean” oceanic eco-system
restoration programme
� 15,367 trees planted through
Environmental CSR
programme
� 95% digitally performed
customer transactions
� 28.11 MW contribution to the
national grid through
renewable energy projects
financed by the Bank
ESG
� Rs 15.9 Mn investment in
“Wewata Jeewayak” tank
restoration programme
� 7,440 beneficiaries from
SOCIAL
“Hope for a Life” health sector

facilitation programme
� Rs 211 Mn Sanhinda Saver
free medical benefits provided
ESG
Scorecard � Rs 288.4 Mn loyalty points
offered to Sampath credit
cardholders
� Rs 14.9 Bn taxes paid

GOVERNANCE
� Strong skill diversity at Board

level to drive the Bank’s
strategy
� ISO 27001:2013 standard
obtained for Information
Security
Ì 1,146 staff trained on
Information Security topics

KEY EVENTS 2022
January March July

Sampath Bank in partnership with Sampath Bank tied up with Indian Introduction of the green PIN - a
Paycorp International (Private) Exim Bank to become the first local digitised ATM pin delivery
Limited, a wholly-owned subsidiary bank to secure a Trade Assistance mechanism to replace the traditional
of Bancstac (Paycorp International), Programme under the USD 1 Bn printed PIN slip for ATM cards.
became the first local bank to enable Indian credit line offered by the
businesses to automatically generate Government of India.
Sampath Bank formed a historic
dynamic merchant LankaQR codes
through the Sampath Bank Payment
April partnership with Dialog Axiata PLC
to launch a network 1,300+ ‘eZ
Gateway. Sampath Bank undertook 4 new Banking’ agents.
projects under the “Wewata
The Bank formed a strategic Jeewayak” Tank restoration
partnership with the Sri Lanka’s programme - the highest number of
National Chamber of Exporters as projects in a given year.
part of a more focused effort to
help its export customers more
visibility in the global marketplace.
September
Roll out of the “Pohosath Minissu”

brand positioning campaign to convey
Sampath Bank’s deep appreciation of
time honoured Sri Lankan traditions.
February
Introduction of Video conferencing

consoles at all newly established
June
digital centers to enable digital
on-boarding of customers. Mr Hiran Cabraal, a veteran
international banker and risk
management consultant was
appointed as an Independent,
Non-Executive Director to the
Sampath Bank Board on 30th June
2022.
Launch of the e-remittance scheme

in partnership with a number of
leading global Fin-techs.

PRODUCT PORTFOLIO
Consumer Banking GRI 2-6
Current
Savings Accounts
Accounts
Sampath General Current Regular Savings

Account Sampath Double S
Sampath Supreme
Current Account Sampath Hit Saver
Sampath Payment
Children's Savings
Guaranteed Cheques
Sampath Pubudu and
Sapiri
Teenage Savings
X-SET
Ladies Savings
Ladies 1st
Senior Citizens' Savings

Sampath Sanhinda Saver
Money Market Accounts

Investment Accounts
Sampath Dream Planner
Accounts for
Leasing Pawning Professionals Agent Banking
Sampath Leasing Sampath Randiriya Sampath Professional eZ Banking

Gold Loan Account

Foreign Currency
Term Deposit Accounts Loans
Accounts
Regular Deposits Personal Foreign Housing Loans

Fixed Deposits Currency Accounts Sevana Housing Loan
Certificate of Deposits (PFCA)
Business Foreign Sevana Dayada Housing
Flexible Deposits Loan
Currency Accounts
Sampath ODFD (BFCA)
Foreign Currency
Inward Investment Housing Loan
Senior Citizens' Deposits Accounts (IIA)
Sampath Sanhinda FD Business Loans
Outward Investment
Accounts (OIA) Sampath Saviliya
Sampath EXPAT Factoring Facility

Accounts (SEA)
Sampath Soorya Loan
Sampath Special Facility
Deposit Accounts
Personal Loans
Sampath FC Prime
Accounts Sampath Study Smart
Sampath Samachara Loan
Special Loans for

Government Medical
Officers
ODFD
Sampath Soorya Loan
Facility
Gift Vouchers SampathCards Relationship Banking Foreign Remittances
Sampath Thilina Sampath Credit Cards Platinum Plus

e-Remittances
Sampath Visa Credit
Cards
Sampath Mastercard
Credit Cards
Sampath Bank
American Express® Sampath RemitWise
Credit Cards
Sampath Debit Cards
Sampath Web Card

PRODUCT PORTFOLIO
GRI 2-6
Digital/Electronic Banking
Internet Banking Mobile Banking ATM Banking

Sampath Vishwa Retail Sampath WePay Sampath Cardless Cash
Digital On-boarding
Sampath Bank App
PayEasy
Chatbot Sampath Slipless
Banking
Touchless Cash
Sampath Missed Call Withdrawal Facility
Banking Off-site ATMs
Interbank ATM Network
Telebanking
Cash Deposit Kiosk
Cheque Deposit
SMS Alertz
Machines
Virtual Teller Machines
SMS Banking Cash Recycler Machines
Mobile Cash
Clubs and Societies Entrepreneurship

Safety Lockers
Accounts Development
Sampath Safe Deposit Sampath Samaja Sampath Saviya

Lockers
Corporate Banking
Financing International Trade Digital Banking
Corporate Credit Trade Services Sampath Vishwa Corporate Open Banking

Corporate Finance Correspondent Banks Payment Gateway Services QR Merchant
Foreign Currency Banking E-commerce enabled Biller Sharing
Unit (FCBU) through Evolve
Sampath Corporate Corporate Sampath Business

Cash Management
Credit Cards Investments Debit Card
Sampath Visa Corporate Corporate Cash Money Market Account Sampath Visa Business
Credit Card Management Solution Debit Card
Sampath Mastercard
Corporate Credit Card
Sampath Visa Corporate
Fuel Card

Treasury Bills Forward Exchange New Offerings

Treasury Contracts
Treasury Bonds
Sri Lanka eZ Banking
Repo and Reverse Repo Development Bonds
The ‘eZ Banking’ service is a
Sri Lanka International unique concept introduced
Spot Contracts
Sovereign Bonds by Sampath Bank in
partnership with Dialog
Axiata PLC to enable
Sampath Bank customers to
safely and securely make
deposits to their Savings
and Current accounts, and
make withdrawals from
their Savings accounts
without having to visit the
branch. With a network of
1300+ ‘eZ Banking’ agents
island-wide, Sampath Bank
customers across Sri Lanka
can now experience the
convenience of attending to
their basic banking needs in
their own neighbourhood
and enjoy the benefits of
extended banking hours, all
while saving time and
money that would otherwise
have been spent on visiting
a branch.

KEY HISTORICAL MILESTONES
1986 1987 1988 1989

� Originally � Appointment of Mr N U Jayawardane � Launched the ATM � Launched Mastercard to Sri
incorporated as as the Chairman of the Bank and (SET) facility. Lanka (under license from
Investment & Mr Janaka de Silva as the General Mastercard International
� First bank in Sri
Credit Bank Ltd. Manager. Incorporated in USA).
Lanka to operate a
� Registered office established at No. 55, multi-point network � Launched the concept of
D R Wijewardena Mawatha, Colombo of Automated Teller Personal Banking Unit (PBU).
10, Sri Lanka, followed by the Machines (ATM).
� Pioneered launch of the
ceremonial commencement of
Uni-Banking System to
business on 15th May 1987.
Sri Lanka.
� Launched the ‘cheque guarantee card’
� Pioneered launch of
(later renamed as ‘payment guaranteed
Sri Lanka’s first-ever
cheque’).
standalone ATM at Liberty
� Introduced extended banking hours Plaza shopping complex.
until 3.00 p.m. for the first time
in Sri Lanka’s banking
history.
Sampath Bank is
known for many firsts
that have helped raise
the bar in the local
banking sector.
1999
� Commissioned a new
core banking system
- Bancs2000. 2002
� Ranked among the 2000 � Pioneered launch of Visa
300 Best Small � Declared “Bank of Platinum Credit Cards to Sri
Companies in the the year in Sri Lanka.
World by the Forbes Lanka” by the � Appointed as the primary
Global magazine.
2001
London-based “The settlement bank for US
Banker” magazine. Dollar cheque clearing
� Commenced operations of SC Securities system in Sri Lanka.
� Launched
(Pvt) Ltd, a subsidiary of Sampath Bank.
“Sampathnet”
internet banking � The first Sri Lankan organisation to
facility (later
rebranded as
achieve the “Quality Approved Status” of 2003
best practice, awarded by the Chartered
� Sampath Bank footprint
‘Sampath Vishwa’). Institute of Management Accountants.
expands with ten new
� Pioneered launch of � Introduced the first Dedicated Savings branches opened during
“Call Bank”, mobile Unit at the Sampath City Branch which the year.
banking service in was kept open for savings operations till
� First bank in Sri Lanka to
partnership with 6.00 pm.
introduce “One day
Dialog GSM.
clearing”.

1994 1997 1998

� Sampath Bank becomes one of the � Headquarters relocated to No. 110, Sir � Declared the “Best Commercial Bank
first local banks to join the SWIFT James Peiris Mawatha, Colombo 02. in Sri Lanka for the year 1998” by
network. Asiamoney magazine for the third
� Launched the Debit Card in association
consecutive year.
with CIRRUS and MAESTRO, signifying
1996 another first in South Asia. � Declared “Outstanding New

Business Venture Project in 1998”
� Awarded “The Best Small-Cap Bank in
� Commenced operations of Sampath by Asian Banking Digest magazine.
South Asia” by Asia Banking Digest.
Centre Ltd, a subsidiary of Sampath
� Launched phase 1 of the Bank’s
Bank. � Declared the “Best Commercial Bank in
digitalisation strategy via a massive
Sri Lanka for the year 1997” by
� Launched the TELEBANKING facility. IT systems re-engineering project
Asiamoney magazine for the second
designed to strengthen product
� Voted the Bank as the “Best consecutive year.
development and diversification
Commercial Bank in Sri Lanka for the
capabilities.
year 1996” by Asiamoney magazine.
Sampath Bank’s evolution over

the years has been inspired by
the thought of bringing
prosperity to all Sri Lankans.
2006
2004
� Commenced operations at 2007
Sampath Information
� ATM network
� Pioneered launch of Technology Solutions Ltd, a
reaches 150
Sri Lanka’s first ever fully-owned subsidiary of
2005
machines across the
Cheque Imaging & Sampath Bank.
island.
Truncating (CIT) site.
� Sampath Bank footprint
� Commenced operations at � Launch of VISA Mini
� Awarded A+ (Sri) grows further with 13
Sampath Leasing & Factoring Ltd. Debit Card, a first in
National Rating by branches (3 Branches and
(later rebranded as ‘Siyapatha South Asia.
Fitch Ratings (Lanka) 10 Personal Banking
Finance PLC’), a fully-owned
Limited. Centres) opened. � 100th Branch
subsidiary of Sampath Bank.
opened in Kandy.

KEY HISTORICAL MILESTONES
2008 2010 2012

� Sampath Bank’s deposit base � Declared as “Bank of the Year 2010 - Sri Lanka” � Sampath Bank celebrates its
exceeds the Rs 100 Bn mark. by the London-based “The Banker” magazine. silver jubilee, marking 25
years of service to the
nation.
2009 2011 � Recognised as the “Best
� Sampath Bank becomes the third � Opened 10 branches across the island in a single Banking Group in Sri Lanka
largest private sector bank in Sri day – a first in the local banking industry. 2012” by the World Finance
Lanka in terms of total assets. magazine.
� Introduced 365-day banking with the unveiling of
� Declared “Bank of the Year 2009 - Sri Super Branches at Dharmapala Mawatha and
Lanka” by the London-based ‘The Kiribathgoda.
Banker’ magazine.
� Introduced the online real time
� Ranked among the Top 10 Cheque Deposit ATMs - a
Companies in Sri Lanka by the first in South Asia.
‘Business Today’ magazine.
� Powered the nation’s
largest ATM network –
Access enabled to nearly
Sampath Bank continues 1,500 ATMs island-wide.
to reiterate its
commitment to Sri
Lanka’s economic
progress. 2019
� Ranked 5th among the Top 30 Best Performing
Companies at the ‘Business Today Top 30 Awards
2016 2018 - 2019’.
� Declared the Winner in the Banking Sector and the

� Pioneered launch of Winner of Excellence in the Corporate Governance
“Visa payWave” enabled category, at the National Business Excellence
cards to Sri Lanka. Awards 2019, organised by the National Chamber
� Declared “Best Bank in
Sri Lanka for the Year
2017 of Commerce of Sri Lanka.
� Clinched the Gold Award for “Digital Quick Loan”

2016” for the third time � Launch of 10 and Silver Award for “Virtual Teller Machine” under
by the “Euromoney” Digital Product the categories “In-house” and “ICT Services
business magazine. suite.
2018 Solutions in Business Services” respectively at the
National ICT Awards - NBSQA 2019.
� Awarded “Banking � Launch of the
Institutions - Bronze drive-thru ATM. � Pioneered launch
� Winner of 8 awards at the LankaPay Technnovation
Award” by the Institute of Slip-less Banking
� Recognised as Sri Awards 2019 organised by LankaClear (Pvt) Ltd.
of Chartered to Sri Lanka.
Lanka’s “Best � Recognised as among Sri Lanka’s Top 10 Most
Accountants of Sri � Recognised as Sri
Retail Bank” and Admired Companies for the second consecutive
Lanka at the 52nd Lanka’s “Best Retail
“Best Commercial year at the “Most Admired Companies of Sri Lanka
Annual Report Awards Bank” and “Best
Bank” at the 2019”.
Ceremony - 2016. Commercial Bank”
World Finance
� Sampath Bank Banking Awards by the World � Ranked among the Top 10 “Most Respected
celebrates 30 years of for the 4th Finance Banking Entities in Sri Lanka” for the year 2019 by LMD.
service to the nation. consecutive year. Awards for the 5th
� Placed 10th among the “Most Loved Brands” - the
consecutive year.
only bank to make the Top 10, and 7th among the
“Most Valuable Consumer Brands” at the LMD’s
Brands Annual.
2013 2014 2015

� Pioneered launch of Sri Lanka’s � Declared “Best Bank in Sri � Reclaimed the prestigious title of “Sri Lanka’s
first foreign currency ATM. Lanka for the year 2014” for the Bank of the Year for 2015” after winning the
second consecutive year by the globally recognised “Banker Award” conferred
� Pioneered launch of “Cardless
“Euromoney” business by the London-based “The Banker” magazine
Cash ATM” technology to Sri Lanka.
magazine. owned by the prestigious “Financial Times
� Declared “Best Bank in Sri Lanka Group”.
� Awarded the “Banking
for the year 2013” by the
Institutions - Gold Award” - � Adjudged the “Overall Best Corporate Citizen
“Euromoney” business magazine.
“Edmand J Cooray Memorial 2015” at the Best Corporate Citizen
Trophy” and the “Overall Sustainability Awards 2015, presented by the
Excellence in Annual Financial Ceylon Chamber of Commerce.
Reporting - Bronze Award” by
� Awarded “Banking Institutions - Silver Award”
the Institute of Chartered
by the Institute of Chartered Accountants of
Accountants of Sri Lanka at the
Sri Lanka at the 51st Annual Report Awards
50th Annual Report Awards
Ceremony - 2015.
Ceremony - 2014.
2020
� Declared Sri Lanka’s “Best Retail Bank”
and “Best Commercial Bank” for the 7th
consecutive year at the World Finance
Banking Awards.
� Rated amongst the Top 1000 World

Banks 2020 by the UK’s Banker magazine
in its 50th anniversary of the rankings. 2021
� Placed 10th among the “Most Loved � Ranked among the Top 5 “Most Respected Entities in Sri Lanka” for the year
Brands” - the only bank among the top 2021 by LMD.
10, and 5th among the “Most Valuable
� Placed 7th among the “Most Loved Brands” - the only bank among the top 10,
Consumer Brands” at the LMD’s Brands
and ranked among the top 10 “Most Valuable Brands” at the LMD’s Brands
Annual.
Annual.
� Ranked among the Top 10 “Most
� Recognised as Sri Lanka’s “Best Retail Bank” and “Best Commercial Bank” for
Respected Entities in Sri Lanka” for the
the 8th consecutive year at the World Finance Banking Awards.
year 2020 by LMD.
� Pioneered launch of “Touchless Cash Withdrawals” to Sri Lanka.
� Sampath Bank’s asset base crosses the
Rupees 1 Trillion mark - the first local � “Touchless Cash Withdrawals” technology receives recognition at the
bank to reach this milestone in just 33 prestigious APICTA Awards 2021. Sampath Bank was the only Sri Lankan bank
years. to be recognised at the APICTA Awards 2021.

Trapeze artists often
undergo a period of
mentorship and
guidance which serves
to shape their journey
and helps them gain
invaluable insights into
their chosen field.
LEADERSHIP IN
ACTION
Relying on decades of expertise and knowledge, we remain forerunners in our field,
guiding our stakeholders with a spirit of dedication and care.
Chairman’s Message..............................................................................
Message.............................................................................. 30
Managing Director’s Review ................................................................ 34
CHAIRMAN’S MESSAGE
Harsha Amarasekera
CHAIRMAN

GRI 2-11,22
Dear Valued Stakeholders The above, amongst other factors,
has precipitated a mass outmigration
It is now over two years since the COVID-19
Sampath Bank
of young people and professionals.
pandemic first ravaged the world with the
National economic growth has shrunk
swiftness and suddenness of a conflagration.
It was anticipated that the financial year
alarmingly against 2021, with estimates
ranging from -9.2% by the World Bank, to
prioritised the needs
of our customers,
2022 might be a year of global respite and
-8.8% by the Asian Development Bank, and
recovery. Regrettably, this was not the case.
the security and
-8.7% by the International Monetary Fund
(IMF). Admittedly, this is not a favourable
The year 2022 saw countries already
exhausted by repetitive battles with an
position from which to embark into a new
year. Nonetheless, we, as a nation, must
wellbeing of its staff,
and all aspects of
unrelentingly mutating COVID virus, further
confront these challenges and be
threatened by escalating geopolitics
national economic
innovative and flexible in our thinking so as
across the globe, which ultimately
to forge ahead in the coming years.
resulted in open warfare in Europe,
following the Russian invasion of Ukraine.
Prioritising Economic Stability
security in 2022, all
of which continue to
The ripple effects of this armed altercation
have been transmitted globally in the form Sampath Bank prioritised the needs of our
of shortages and rapid inflation in the cost
of fuel, food and raw materials.
customers, the security and wellbeing of
its staff, and all aspects of national
remain a priority as
Meanwhile, strategic rivalry between China economic security in 2022, all of which we face yet another
continue to remain a priority as we face yet
volatile year.
and the West continued to deepen, and
the growing hostility between China and another volatile year. The Bank is
Taiwan, and between North Korea, South inextricably interwoven into the very
Korea and Japan, are burning embers that socio-economic fabric of the country, with
further threaten Sri Lanka’s already fragile financial as well as emotional bonds
spanning the width and breadth of Sri Financial Performance
economy. Closer to home, Pakistan, a
nuclear power, is experiencing a foreign Lankan society. Hence, despite the I believe our financial performance is the
exchange crisis, while battling the risks of widespread economic uncertainty of 2022, highest testament to Sampath Bank’s
terrorist activity by the Taliban. Sampath Bank focused on achieving a strength and stability at the end of this
strong capital base and a steady liquidity gruelling year. Sampath Bank achieved a
Sri Lanka too, was shaken to the core in profile in order to reinforce the financial commendable performance for the
2022 by the combined impact of recurrent stability of not only the Bank, but of the financial year 2022, in spite of incessant
shortages of foreign exchange and a steep financial system as a whole. market and operational disruptions.
and unprecedented depreciation of the Sri The Bank concluded 2022 with a Profit
Lankan Rupee, both of which led to a Sampath Bank continued to lead by after Tax (PAT) of Rs 13.1 Bn and a Profit
shortage of essential food, medication, example, by promoting inward remittances before Tax (PBT) of Rs 15.0 Bn, a 10.8%
fuel and gas, as well as extensive power and encouraging the inflow of export negative growth in PBT and a 5.4%
cuts, thereby exacerbating inflation, proceeds into the country, while assisting marginal growth in PAT. I am satisfied with
repeated trade union action and civil all stakeholders to navigate the current this outcome given the exceptionally
protests. For the first time in our economic crisis. We are particularly proud difficult environment in which we
post-independence history, Sri Lanka of the significant foreign exchange that we operated. The Group reported PAT and
suspended the repayment of its external have made available for the import of fuel, PBT of Rs 14.1 Bn and Rs 16.4 Bn
public debt, resulting in a financial crisis of gas and other essentials, which has helped respectively, as against Rs 13.9 Bn and
mammoth proportions that culminated in alleviate the hardships that might Rs 18.8 Bn respectively reported in 2021.
the replacement of both the President and otherwise have occurred to our daily lives.
the Prime Minister. The increased prices of The Bank has also been prudent and
all essential commodities, coupled with conservative in respect of the provisioning
much higher market interest rates and tax for impairments. Notwithstanding the
rates, have had a significant impact on the same, the Bank was able to report a strong
cost of living and economic activities and financial performance for 2022 with
has created uncertainty in respect of Sri sustained growth in profitability, thereby
Lanka’s economic future. upholding the obligations owed to its
shareholders.

CHAIRMAN’S MESSAGE
Rs 198 Bn
We have also continued to invest in
Profit before Tax & Profit after Tax significantly enhancing our IT systems.
Rs Bn The Bank has now added video
20
2022
conferencing consoles at new digital
banking centres and implemented a 89% Gross Income
Green PIN concept for ATM cards.
Rs 105 Bn
15
We were also the first local bank to enable 2021

10 businesses to automatically generate
dynamic merchant LankaQR codes
5 through the Sampath Bank Payment
Gateway, which enables lower transaction
LankaPay Technnovation Awards 2022.
15.5
11.2
11.2
16.8
12.5
15.0
13.1
costs than traditional credit cards.

8.0
0 At the NBQSA - National ICT Awards 2022,

Online banking has been made even
2022
2019
2020
2021
Sampath Bank received both the Overall

more accessible by facilitating Sampath
Gold Award and the Gold Award for the
Vishwa online banking, through
Profit before Tax Banking, Insurance and Finance category.
customers’ debit card PINs. Our mobile
Profit after Tax
banking facility was also upgraded for an
The Bank was also recognised as
omni-channel customer experience.
Sri Lanka’s Best Bank for CSR by
In addition, we also partnered with a
Creating Value for All Stakeholders Asiamoney magazine, and as the Market
leading mobile network service provider
The aftermath of the prolonged economic Leader in CSR by Euromoney magazine.
to launch the Tourist Fuel Pass, to
stress caused by the pandemic and the These independent and unbiased awards
fast-track tourism industry recovery, while
impact of the ongoing economic crisis on bring pride to our nation and validate
attracting foreign currency.
the business operations were judiciously Sampath Bank’s position amongst the very
assessed by the Bank prior to addressing best in the industry.
Giving Back to Our Communities
challenges, and adequate impairment
It gives me great pride to place on record Outlook for the New Financial Year
provisions were thereafter allocated on a
that Sampath Bank never wavered in its
prudential basis. We also worked closely The World Bank, in its January 2023 Global
obligations towards society during this
with customers and developed highly Economic Prospects Report, expressed
exceptionally difficult period. The “Wewata
targeted and customised solutions to concerns that “further adverse shocks”
Jeewayak” programme commenced
assist our most vulnerable stakeholders. could push the global economy into
restoring four tanks in Dambulla, Thalawa,
Many customers in the tourism sector recession in 2023, with small states being
Dambana and Maho, and “Sampath Saviya”
whose moratoria ended in 2022 for particularly vulnerable. The International
our Entrepreneurship Development
instance, were offered customised Monetary Fund echoed similar
programme, successfully conducted the
restructuring and rescheduling solutions. sentiments, stating that one-third of the
Youth Entrepreneurship Programme
The Bank also leveraged its complete global economy will be in recession as the
“BIZTEP”. Under the “Education for All”
range of service delivery channels United States, the European Union and
theme, we continued to provide internship
including branches, ATMs, Cash Deposit China are all slowing down simultaneously.
programmes for school leavers and
Machines, Cash Recycler Machines, This has resulted in the World Bank
undergraduates. The Bank also launched a
eZ Banking agents and digital channels to scaling down its global growth projections
coral replanting programme for the
provide uninterrupted services to to 1.7% in 2023 and 2.7% in 2024.
protection of marine resources in the
customers, even amidst fuel and electricity
waters off the coast of Bandaramulla,
shortages in the country. While a global economic downturn will
Mirissa.
undoubtedly impact Sri Lanka’s prospects
Despite external disruptions, Sampath in 2023, there is a silver lining for Sri Lanka
Performance Excellence
Bank has remained steadfast in its in light of the progress of the
futuristic vision to revolutionise banking Sampath Bank was named the “Best IMF-EFF programme, and debt
in Sri Lanka, building a peerless financial Commercial Bank” and “Best Retail Bank” restructuring negotiations. In addition,
organisation equipped with cutting edge of Sri Lanka in 2022 for the ninth a recovery in economic activity is
technology. Through Sampath WePay, consecutive year, at the World Finance anticipated in 2023 with improvements
we are on a mission to convert all cash- Banking Awards, UK. Sampath Bank also envisaged on the supply-side, along with
based transactions into digital media. won the highest number of awards at the the timely implementation of the required

Rs 111 Mn
reforms. Both ongoing and prospective Appreciations
reforms are expected to drive the Sri Our success in 2022 is an achievement that
Lankan economy onto a recovery path is indubitably a consequence of the 2022
from the latter part of 2023. dedication and commitment of many
people who continued to maintain faith
Economic Value Distributed
The stringent import restrictions, fuel and trust in the Bank during these volatile 158% to the Community
rationing and the resilience in exports times. Our employees, “Team Sampath”,
have resulted in an improvement in the
Current Account, potentially eliminating
are undeniably the greatest resource that
we have and the team, together with our
Rs 43 Mn
negative movements in the currency.
2021
customers, are the mainstay of our success
Cost reflective pricing for essential utilities in the past and they, together with the
such as fuel, electricity, LP gas, and key Bank’s Corporate Management, must be
changes in direct and indirect taxes, will to address day-to-day challenges, as and
credited for driving the Bank’s vision at
also boost government revenue. when they arose. I am therefore immensely
ground level despite the headwinds that
Thus, while acknowledging the challenges grateful to the members of the Board and I
prevailed throughout the year.
facing the country, I am hopeful of an have no doubt that I will be able to rely on
all-round improvement in 2023. their guidance and counsel in the coming
The Board will seek to repay the
years.
confidence that the shareholders have in
Plans for Sustainable Growth us by mapping out a strategic vision which
I am also grateful to our regulators,
We are fully cognisant of our overarching will encompass a blueprint for continued
the Central Bank, the Colombo Stock
responsibility, not only towards our profitability, while exercising prudence
Exchange, the Securities and Exchange
shareholders but also to wider society and care during these times of uncertainty.
Commission, the Ministry of Finance,
during this period of painful economic The Bank is also fully committed to
the Ministry of Health and the Tri-forces,
transition and are completely invested in ensuring that our customers are able to
for their support during the year.
generating opportunities for wealth achieve their goals.
creation. In striving to achieve this
I also extend my appreciations to the
objective, Sampath Bank intends to adopt During the year under review, Mr Deshal
suppliers and service providers who have
the highest standards of governance, de Mel, Senior Independent Director,
stood by the Bank despite the many
stringent internal controls and effective retired from the Board prematurely in
hardships of the year.
risk management practices in order to order to take up a national role with the
facilitate stable and sustainable growth in Ministry of Finance. Deshal, during his
I extend my sincere appreciations to all
2023, and beyond. tenure was a source of strength for both
our valued stakeholders and I look forward
the Board and I, and we will miss his
to writing a new phase in the history of our
As a key component of our economic acumen and knowledge. On behalf of the
country, together.
recovery drive, Sampath Bank will Board, I wish to place on record
accelerate market penetration by the Bank’s appreciation to Deshal for the
Sincerely,
increasing the number of eZ Banking contributions he made to the deliberations
agents while also expanding our digital of the Board. I am, at the same time,
drive. Our objective is to bring faster, more delighted to welcome Mr Hiran Cabraal to
convenient and more cost-effective the Board of the Bank with effect from
financial services to all communities, 30th June 2022. He brings with him a vast HARSHA AMARASEKERA
across the island. This will also encourage body of experience, both in Sri Lanka, Chairman
underbanked and unbanked communities as well as in this region, in many aspects of
across Sri Lanka to adopt formal banking banking, particularly in the areas of risk 17th February 2023
practices, and will motivate more people and compliance. Colombo, Sri Lanka
and businesses around the country to use
a wider range of banking services. We are During this very difficult year, I was
confident that our efforts will contribute extremely fortunate to receive guidance
significantly towards poverty alleviation and wise counsel from my colleagues on
and developing entrepreneurship, while the Board. They have engaged themselves
also augmenting the Bank’s financial in the affairs of the Bank at very short notice
returns. and have at all times been ready and willing
to accede to the demands of the Bank and

MANAGING DIRECTOR’S REVIEW
Nanda Fernando
M A N A G I N G D I R E C TO R

GRI 2-6
The last few years have been From an economic standpoint, it was
extraordinarily challenging for Sri Lanka. tough to see the country become
Setting aside our

First the Easter Sunday attacks in 2019, progressively more vulnerable as foreign
and then the almost two-year battle with currency reserves dried up as a
plans for growth the COVID-19 pandemic caused massive

economic stress, which is why when the
consequence of low inward remittances
and sub-par growth in tourism sector
and expansion, world appeared to be moving forward income, while tighter fiscal controls,
we quickly shifted
post-pandemic, many of us dared to hope including broad-based import restrictions
that 2022 would signal a turning point for introduced by the government in order to
gears to focus Sri Lanka too. In contrast, it proved to be a stem currency outflows saw both
tipping point, where straddled by long agriculture and industry sectors shrinking
instead on strategic overlooked structural weaknesses and and causing inflation to rise alarmingly.
reorientation to surging foreign debt, the Sri Lankan

economy collapsed into its worst crisis, The combined impact resulted in
enable the Bank to post-independence. Sri Lanka’s GDP contracting by 9.2%,
possibly the most historically significant
adapt to the highly I must admit for me personally, leading deterioration in the country’s modern
uncertain economic Sampath Bank through this critical

juncture in the country’s history has been
history.
conditions. one of the most strenuous and demanding On the upside, I am pleased to see that
experiences of my four-decade long career proactive efforts by the new government
as a banker. In a manner of speaking, the to initiate talks with the IMF to secure
series of events that unfolded throughout financial assistance by way of an EFF
2022 all had a bearing on the country’s arrangement appear to be bearing fruit
financial system as a whole and being part with a staff-level agreement for a proposed
of this construct, Sampath Bank too was EFF being reached in early September
affected in numerous ways. However, 2022. The government-led policy reform
I find that there were a few macro-level programme also offers renewed hope for
events that were somewhat more a firm reset that would help restore
concerning. First, was the government economic stability over the medium term.
Rs 1.3 Tn
announcing its decision to suspend
servicing sovereign debt obligations with Strategic Reorientation
2022 effect from April 2022 as the country Setting aside our plans for growth and
battled with an unprecedented foreign expansion, we quickly shifted gears to focus
Total Assets 10.4% exchange crisis. The decision in effect instead on strategic reorientation to enable
Rs 1.2 Tn
ended Sri Lanka’s unblemished external the Bank to adapt to the highly uncertain
debt repayment record, which the country economic conditions. Amidst muted credit
2021 has continued to maintain despite past demand and very real concerns regarding
setbacks. the debt repayment capacity of borrowers
under hyperinflationary conditions and
The change in the country’s status quo rising interest rates, lending across all
Rs 1,103 Bn
2022
had a cascading effect on the local
banking sector, as foreign lenders
triggered conditional covenants that
formats were curtailed. Multi-pronged
approaches to safeguard the Bank’s
consumer banking portfolio, included
required Sri Lankan banks to advance efforts to curb the exposure to leasing and
Total Deposits 12.8% their repayment obligation on a priority housing advances and also mitigate the
Rs 978 Bn
basis. Meanwhile, Sri Lanka’s sovereign credit concentration risk to the housing
rating downgrade by international rating and condominium sector. Nonetheless,
2021 agencies in May 2022 brought fresh capitalising on the rising world gold prices,
worries as global lenders rushed to curtail we seized the opportunity to promote
lending and tighten trade terms with local pawning and grow our gold loan portfolio.
banks.

While curtailing broad-based lending, The Bank continued to lead by example in

we remained mindful of the importance of demonstrating its commitment to the
The Bank continued

supporting the SME sector, where possible. national growth agenda by promoting
Towards this end, our own credit line and inward remittances and encouraging the
to lead by example the ADB funded credit line were both kept
open to mobilise SME sector investment
inflow of export proceeds. Leveraging our
industry-leading trade service capability,
in demonstrating into selected sectors such as renewable we launched a special export promotion
its commitment to
energy, modern agriculture, information drive. This together with our Cash
technology, e-commerce and education. Management Solutions were also part of
the national growth At this point, I wish to place on record that
our new customer acquisition strategy and
I am happy to see that through these
agenda by promoting the prevailing uncertainty presented an efforts, we were able to attract a sizable
inward remittances
opportunity for Sampath Bank to showcase number of Multi National Corporates and
its commitment to responsible banking rated local conglomerates who have time
and encouraging principles. Seeing a majority of corporates and again proven to be relatively immune
under pressure due to the economic to economic shocks.
the inflow of export downturn along with stringent import
proceeds. restrictions, we were reluctant to add to

their pressure by encouraging them to
It is with immense pride that I acknowledge,
Sampath Bank’s success in boosting
increase their gearing any further. inward remittance flows to Sri Lanka,
Accordingly, a cautious lending strategy at a time when the country was in dire
Rs 11.48
was adopted for the corporate advances need of foreign currency. The launch of
portfolio. With this restrained approach the e-Remittance solution in collaboration
influencing our lending decisions with our network of global Fin-tech
2022 throughout 2022, we engaged in selective partners was the key catalyst in our efforts
EPS lending mainly targeting systemically to make inroads into new source markets
5.4%
important sectors of the economy to drive as well as to deepen the penetration
Rs 10.89 the expansion of our corporate lending

book.
across existing remittance corridors.
2021 On the funding side, our deposit

I do concede that the foreign currency mobilisation activities were largely
shortfall in the country did have a bearing influenced by the upward movement in
Total Operating Income on our ability to support our customers at policy interest rates from April 2022
Rs Bn this crucial time, which is why I am very onwards. Cautious of cost implications in
120 pleased to say that thanks to conscientious this rising rate environment, CASA growth
management of the Bank’s Net Open remained our top priority in 2022.
100 Position, we were able to facilitate priority
imports such as essential food, With cost management top-of-mind as
80
pharmaceuticals and critical agricultural always, throughout the year, we continued
60 inputs to support local growing activity. to trim expenses where possible and
Further reiterating our willingness to practical. Early on in the year, we undertook
40 a special programme to cut branch costs
support the government’s efforts to curtail
20 imports as much as possible, special credit and improve overall productivity by
2022 111.0
centralising all back-office functions

2019 55.2
2020 46.2
2021 58.5
facilities were offered to corporates to

0 encourage investment in the import typically handled at branches.
substitution space in particular through
local manufacturing.

Meanwhile, seeing no visible improvement

in the country’s economic indicators even
While strategic transformation has remained

towards end-2022, the Bank’s
leadership revisited Sampath Bank’s
fundamental strategy in the context
of prolonged economic stress. A global
the overarching theme for all, the fundamental
financial advisory specialist was difference of AOT is that it constitutes an
urgent call to action to build the necessary
commissioned to conduct a deep dive into
our existing strategy, and critically examine
the adequacy and efficacy of our existing defenses that will allow the Bank to deliver its
strategic levers to help the Bank navigate
the uncertainties that lie ahead. performance objectives and strengthen the
The result was the formulation of a brand Balance Sheet despite headwinds.
new way forward termed “Art of
Transformation” or AOT. The 4th such
forward-looking strategic initiative by the NII & NIM provisioning was booked against loans
Bank in 6 years - the first being the Rs Bn % and advances in lieu of the probability
“Paradigm Shift" in 2016, followed by the 80 6 weightage for the worst-case economic
5.66
“Triple Transformation 2020”, phase 1 and scenarios and the Economic Factor
2 and AOT being the latest edition. Adjustment to account for the prevailing
60 5
While strategic transformation has economic uncertainties.
4.46
remained the overarching theme for all, the
fundamental difference of AOT is that it 40 4 In light of the unsettled macroeconomic
constitutes an urgent call to action to build 3.61 environment, the Bank conducted a
3.30 comprehensive review of the impairment
the necessary defenses that will allow the 20 3
Bank to deliver its performance objectives provisions made against both significant
and non-significant customers during the
2019 41.6
2020 33.8
2021 41.7
2022 73.5
and strengthen the Balance Sheet despite

0 2 year. This review process took into account
headwinds. With the final touches on AOT
completed by end December 2022, various factors, including the repayment
we anticipate the formal roll out of AOT to capacity of customers, industry-specific
Net Interest Income (NII) stress factors, default risk of customers
take place in January 2023.
Net Interest Margin (NIM) (RHS) under the government approved
Consistent Financial Results moratorium along with the potential
Bolstered by strong improvements in all impact of rising inflation, higher interest
I am pleased to report that Sampath Bank
fee-based activities, Net Fee and rates and tax rates, as well as other
delivered healthy results for financial year
Commission Income grew by 69.4% to indeterminate challenges that could occur
(FY) 2022, which are consistent with
Rs 19.4 Bn in the year under review from due to extreme economic pressure. The
expectations for the period.
Rs 11.5 Bn in 2021. collective impact of these approaches
saw impairment provisions on
Favourable re-pricing of the interest-
Total impairment charges increased loans and advances increasing to
earning assets portfolio in tandem with
substantially from Rs 17.1 Bn in 2021 to Rs 109.0 Bn in FY 2022, up by 115.7%
the upward trend in interest rates, saw the
Rs 62.7 Bn in FY 2022. Of this, Rs 54.3 Bn is from Rs 50.5 Bn in 2021.
Bank’s Net Interest Income (NII) rising to
Rs 73.5 Bn in FY 2022, up by 76.4% from on account of provisions for loans and
advances, while Rs 7.8 Bn is attributed to At the same time, following the downgrade
Rs 41.7 Bn in 2021. Net Interest Margin
investments in financial instruments of Sri Lanka’s sovereign rating, the Bank
(NIM) also improved by 205 bps to 5.66%
including SLDBs and SLISBs. moved to make substantial provisions in
in FY 2022 compared to 3.61% in 2021, as
anticipation of possible haircuts on foreign
the growth in interest income outpaced
A few key points to note regarding our currency denominated government
the increase in interest expenses.
provisioning approach for the current security instruments. On this basis,
financial year. On a prudent basis, higher impairment charge of Rs 7.8 Bn was
recognised against SLDBs and SLISBs.

Net Fee & Commission Income Total Tier I Capital & Total Capital was put in place to offer specialist advice
Rs Bn % to exporters, especially SMEs and
20 start-ups. Inspired by the excellent
20
response received for our export advisory
service, we tied up several export-related
15 15 government bodies to conduct a series of
awareness workshops for exporters.
10 10
Stepping in to handle trade negotiations
on behalf of our export clients, we often
5 5 reached out to our network of global
correspondent banks and even initiated
14.22
13.44
16.41
13.95
17.02
11.92
14.27
18.12
2019 10.0
2021 11.5
2022 19.4
2020 8.5
0 0 new relationships with other overseas
2022
2019
2020
2021 banks. Additionally, we were able to

secure a blanket guarantee for all site
Total Tier I Capital Letters of Credit (LC) issued by Sampath
Total Capital Bank through the Indian Exim Bank’s
Trade Assistance Programme (TAP),
which allowed us to expedite the process
Rs 5.6 Bn
11.92% respectively, while the Total Capital for importers of essential items.
Ratio was at 14.27%, all ratios above the To complement these efforts, the
regulatory minimum of 7%, 8.5% and Sampath Vishwa Corporate facility was
2022
12.5% respectively. The Bank’s Leverage further enhanced with the inclusion of
Financing of New Ratio as at the end-December 2022 was new automated modules to improve
Renewable Energy 7%, against the regulatory minimum of 3%. processing speeds of LCs and
Projects 22.6% both outward and inward Telegraphic
Transfers (TT).
Rs 4.6 Bn
Liquidity levels too remained consistent.
At 27.85%, the Statutory Liquid Assets
As part of our customer experience
2021 Ratio as at 31st December 2022 was
comfortably above the regulatory augmentation strategy, we continued to
minimum requirement of 20%, while the expand customer digital interfaces,
Operating expenses also increased by
Liquidity Coverage Ratio (All Currency) and most notably the launch of the Sampath
35.7% year-on-year, driven by higher
the Net Stable Funding Ratio at 146.53% iPIN - self onboarding facility via the
personnel costs and the combined impact
and 157.10% respectively, were also both Sampath Vishwa Online Banking Platform,
of high inflation, higher taxes and the high
well above their respective regulatory upgrading digital banking centres through
cost of imports on the back of weak Rupee.
minimum requirements. the introduction of video conferring
console to facilitate accounts opening and
Nonetheless, despite higher operating
Protecting Customer Journeys the Green PIN implementation to replace
expenses and the four-fold increase in
the conventional paper-based ATM PIN
impairment charges, Sampath Bank posted The myriad challenges encountered in
delivery mechanism. We made good
a Profit After Tax of Rs 13.1 Bn for FY 2022, 2022 did not in any way dampen our
headway in integrating the Sampath
which was marginally higher than the passion or should I say compassion for our
Vishwa Mobile App into the omni-channel
Rs 12.5 Bn tabled in the previous year. customers and to see them through these
environment and went live with the
trying times. Considering the need of the
‘RemitWise’ app upgrade incorporating the
The Bank maintained a stable capital hour, our advisory services were
end-to-end traceability feature.
position throughout 2022, with all key significantly expanded. A new Credit
capital ratios consistently above regulatory Nursing Unit was set up to assist both
We achieved a major milestone in our
minimum requirements. As at 31st retail and corporate borrowers in capital
campaign to support the CBSL’s endeavour
December 2022, the CET I and Tier I Capital planning and liquidity management,
to promote mainstream use of QR-based
Adequacy Ratios stood at 11.92% and while a dedicated internal advisory team
payments. Forming a strategic partnership

with Paycorp International (Private) July 2025. Keen to further elevate our
Limited, Sampath Bank became the first system security on par with the latest
I am pleased to
local bank to allow real-time payment and global standards, several parallel projects
settlement using any LankaQR enabled were initiated to secure more niche
apps and digital wallets. It is with great
pride I announce that Sampath Bank was
report that Sampath certifications such as the ISO/IEC 22301,
ISO/IEC 27035, and ISO/IEC 20000.
also the first Sri Lankan bank to introduce Bank delivered
healthy results for
e-commerce facilitation services with Meanwhile, to demonstrate our
direct connectivity to the UnionPay commitment to the early adoption of
International payment gateway, payment financial year 2022, regulatory changes, some notable steps
processing solution, and payment were taken to comply with the Banking Act
aggregator services, all backed by security which are consistent Direction No. 16 of 2021 on “Regulatory
assurance under the latest 3DS 2.0 fraud
protection software.
with expectations Framework on Technology
Management and Resilience for Licensed
Risk
for the period. Banks” and Personal Data Protection Act

Regardless of economic cycles, our vision No. 9 of 2022. In this regard, a new Cloud
to be “The Growing Force in Sri Lankan Computing Policy was approved by the
Financial Services”, remains set in stone. process automation, with more emphasis Board and a new information security
It has been the inspiration behind our 36+ on widening the use of robotic process strategy was drawn up outlining the way
years of innovation and exploration for the automation to streamline routine and forward for the next 3 - 5 year time frame.
purpose of creating new customer repetitive processes. Data science
journeys. Continuing to innovate in 2022, technology and data analytics insights Strengthening the Team
we sought to make our banking services were also widely used to improve decision First through COVID-19 and now during
safer and more accessible to a wider making and customer value addition these extraordinary times, our team has
mainstream audience. It was this premise respectively. continued to prove beyond a doubt that
that led to the introduction of the Sampath they are indeed the Bank’s staunchest
Bank’s e-remittance service - a convenient, Our cloud migration programme, which allies. This I believe is thanks to a
fast and cost effective medium for Sri was launched in 2021, gathered combination of our robust people strategy
Lankans living overseas to remit much momentum with the latest updated and unique team-based culture.
needed foreign currency to the versions of the Human Resource
country safely and legally. Similarly, the Information System (HRIS) and the "Vidvan" As in the past, in this year too, we ensured
“eZ Banking” service which we launched in learning management platform, both our people were duly recognised for their
mid-2022 in partnership with Dialog Axiata introduced to the cloud environment performance and rewarded for their
PLC, is positioned as a convenient and cost during the year. willingness to go above and beyond the
effective solution to enable unbanked and call of duty to serve our customers and
underbanked populations to easily access With these latest developments, I can stay true to the “Sampath” brand values.
formal financial services. Both solutions confidently say that Sampath Bank is now
have been tremendously well received by digital to the core. This is not to say our Both financial and non-financial benefits
the respective target markets, which gives transformation is over, but only that we were also further enhanced to offer relief
me reason to believe that they will only have reached a new, more advanced to employees during these difficult times.
gain further traction in due course. phase in our digital evolution where For several months during the fuel crisis, a
everything we do is complemented by the luxury bus service was deployed on
Advancing the Digital Core latest technology. selected routes to help employees to
In the decade since embarking on our commute to work with ease. The “Cycle to
digital transformation strategy, we have That said, I would like to stress that the Work” initiative was also launched at the
made remarkable progress in integrating efficacy of the Bank’s information security height of the fuel crisis in June 2022.
digital technology to every aspect of our architecture too was assured following the
business. This past year was no different. ISO 27001:2013 recertification for a
In 2022, we intensified the focus on further 3-year period from August 2022 to

Our talent management programme

received a major boost in 2022, when we
hired a global consultancy firm to design
and develop a robust new Performance
Management System and Performance
Based Bonus Scheme. By establishing a
direct link between employee performance
and rewards, the proposed fully automated
mechanism is expected to create a
cohesive framework that will help to
further deepen the performance-driven
culture at a granular level.
Providing for the Community

As a bank, we consider it our duty to
provide for the wider community.
Through our flagship community initiative
- the “Wewata Jeewayak” tank restoration
programme, we invest in rehabilitating Inauguration of the '10,000 Trees Campaign' in collaboration with the Rotary Club of Colombo at the
long neglected irrigation infrastructure We Oya Estate of Kelani Valley Plantations
mainly in Sri Lanka’s dry zone, thus

providing a lifeline to countless small-scale extended towards new non-conventional “Best Retail Bank” at the prestigious World
rural farming families who live in renewable energy sector projects, of which Finance Banking Awards 2022 hosted by
surrounding villages. Including the 4 new 11.2% was for solar projects and 88.8% UK-based World Finance magazine.
restoration projects undertaken in 2022, towards wind energy.
the “Wewata Jeewayak” tank restoration At the LMD Brand Finance Awards,
programme has been responsible for the To ensure that sustainability principles are Sampath Bank was declared the #1 Most
restoration of 16 tanks to date. deeply etched into every one of our Loved Bank in Sri Lanka and also secured
strategic undertakings, a new a spot among the highly coveted Top 10 in
Formally endorsing our commitment to Environmental and Social Management the Most Valued Entities. The Bank
serve the wider community, we launched System (ESMS) Implementation Committee emerged in 7th place in the Business
the “Pohosath Minissu” campaign in was appointed to oversee the Today Top 40 rankings for 2021-2022.
September 2022. Our goal with this implementations of the CBSL directive on
campaign was to emphasise traditional Sri Sustainable Financing Activities In recognition of the progress made on
Lankan value culture and show how we as a for licensed banks. We also hired an the digital front, Sampath Bank secured 5
Bank appreciate these time honoured external ESMS consultant to assist the major Awards at the LankaPay
customs and will always give precedence to ESMS Committee in developing Technnovation Awards 2022, including
them over the creation of material wealth. appropriate policies and guidelines to the Overall Silver Award for “Outstanding
By reinforcing the key message that “values comply with the requirements of the Sri Achievements and Excellence in Interbank
are what bind us beyond a transaction”, the Lanka Green Finance Taxonomy guidelines Digital Payments” and 3 Gold Awards for
“Pohosath Minissu” campaign thus seeks to published on 6th May 2022. the “Most Innovative Bank of the Year”,
inspire national pride and encourage all Sri “Bank of the Year for Excellence in
Lankans to unite under these common Awards and Accolades Customer Convenience” and “Best
values, so that we as a nation may endure It has been another rewarding year in Acquirer on Lanka Pay Online Payment
for the future. terms of awards and accolades with Platform”.
Sampath Bank’s performance and
Advocating for Sustainability progress on many fronts being endorsed Our contribution to the wider community
both locally and internationally. For the 9th too did not go unnoticed. At the
Our most significant and impactful
consecutive year, Sampath Bank clinched Euromoney Awards 2022, Sampath Bank
contribution to sustainability is through
the titles of “Best Commercial Bank” and was honoured as the ‘Market Leader in
the financing of renewables. In 2022,
CSR’ and the ‘Best Bank in CSR’ by
Rs 5.6 Bn worth of financing facilities were

Asiamoney Magazine, while at the SLIM Sampath Bank’s path remains very clear. It was truly humbling to see the courage
Brand Excellence Awards 2022, Sampath We will focus on implementing the AOT and conviction shown by “Team Sampath”
Bank was recognised as the ‘CSR Brand of programme and thereby aim for a total in these difficult times. Let me take this
the Year 2022’. transformation of the Bank’s products, opportunity to thank each and every one
processes, pricing, business model and of you for coming together to ensure the
Sampath Bank’s commitment to customer approaches, all while Bank stays on course.
sustainability was acknowledged by the re-energising our teams through a more
Ceylon Chamber of Commerce at the holistic employee value proposition. I greatly value the support of our
annual Best Corporate Citizen shareholders and other stakeholders
Sustainability Awards 2022, where AOT is a sharp contrast to the more rigid who have continued to stand by us
Sampath Bank was declared the Overall transformative programmes we have through it all. Thank you for sharing this
1st Runner Up. The Bank also won the undertaken in the past, as it allows us the journey with us.
Triple Bottom Line - Social Sustainability flexibility to explore more sustainable
(People) Award as well as the Community ways of improving employee productivity My sincere appreciation to our Chairman
Relations Category Award and was ranked and helping to enhance their contribution and the Board of Directors for their
among the Top Ten Best Corporate towards meeting the bottom line tireless efforts in guiding Sampath Bank
Citizens, at the same forum. expectations of the Bank. To further through what has undeniably been one of
complement these measures, we will also the toughest years in the Bank’s 36+ year
Way Forward rethink how we collaborate for business history.
With the country’s economic situation still growth and value addition in certain key
quite fluid, I will not be so bold as to predict areas. A special word of thanks to the officials at
when the current uncertainties will end the Central Bank of Sri Lanka, the Securities
and a turnaround will materialise. I am confident that AOT, with its futuristic and Exchange Commission of Sri Lanka,
However, what I can say for sure is that outlook and adaptable approach will not the Colombo Stock Exchange and the
only provide much needed immunity Ministry of Finance for their advice and
against an uncertain future, but more support during the year.
importantly serve as a scalable platform
for Sampath Bank to grow sustainably and
help Sri Lanka to reinstate its economic
credentials in the years ahead.
NANDA FERNANDO
Appreciations
Managing Director
Even as Sri Lanka faced one calamity after
another and the pressure mounted, 17th February 2023
our customers remained a pillar of Colombo, Sri Lanka
strength throughout 2022. On that note, I
would like to extend my sincere gratitude
to all Sampath Bank customers for their
Sampath Bank was declared Sri Lanka’s “Best belief in our brand and what we do.
Retail Bank” and “Best Commercial Bank” for
the 9th consecutive year, at the prestigious
World Finance Banking Awards 2022

Trapeze artists rely on a
wealth of technical
knowledge and skills
which serve as the basis
for every strategy. In
pursuing and achieving
excellence, the artists build
confidence, and are
therefore able to rapidly
adapt and evolve in the
face of change.
EXCELLENCE IN
C O N F I G U R AT I O N
S T R AT E GY R E P O R T
The strategies and competencies we develop are executed with precision and
accuracy; ensuring that we demonstrate flexibility, adaptiveness and agility with every
movement we make.
Strategic Themes....................................................................................
Themes.................................................................................... 44
Our Approach Towards Sustainability.
Sustainability............................................... 48
Our Value Creating Business Model..................................................
Model.................................................. 56
Material Topics ....................................................................................... 58
Connecting with Our Stakeholders .................................................. 62
Our Sustainability Journey....................................................................
Journey.................................................................... 70
STRATEGIC THEMES
S Strengths
� Youngest bank in Sri Lanka to surpass � Strong in remittances business having

Rs 1 Trillion in assets, in just 33+ years a high market share.
since inception. � Capable, motivated, and loyal
� Strong 5-year CAGR (10.74%) in total workforce.
assets (2017 - 2022). � Strong brand blended with Sri Lankan
� 2nd highest CASA ratio (35%) among culture.
peers as at 30th September 2022.
� One of the highest NIM (Net Interest
Margin) among peer group;
Consistently growing prior to COVID.
At the heart of Sampath � Comparatively lower concentration of
Bank’s Strategy are four SLDBs and SLISBs in the Bank’s book.
fundamental interconnected � Adopted a conservative impairment
provisioning policy, resulting in 11.84%
themes: BUSINESS,
provision cover against loans and
SWOT
TECHNOLOGY, PEOPLE and advances.
SUSTAINABILITY, which
together represent the levers
through which the Bank
catalyses its short, medium O Opportunities
and long term strategic
objectives.
� Opportunity for consolidation
through Mergers and Acquisitions.
Considering the SWOT
� Leverage strategic partnerships with
(Strengths, Weaknesses,
service providers, Fintech companies
Opportunities and Threats) driving business growth and
� Market expansion to beyond
analysis conducted expanding offerings.
geographical boundaries using new
throughout the financial year � Regulator fast tracking tech adoption
technology such as Blockchain
2022, the aforementioned through digital banking, cashless
together with high level of IT experts
payments, e-KYC, fintech, sandbox,
strategic themes were to drive hyper growth.
crypto, etc.
deemed priorities by the � Digitise Customer Journeys to
� Opportunity to extend credit to new
enhance customer experience.
Bank’s leadership to ensure growth sectors in the economy such
� Build data and analytics capabilities.
Sampath Bank remains on as Exports, Logistics, Energy and
Power, Manufacturing, Local � The Bank can also look to target the
track to achieve its strategic
industries, supported by the attractive and rapidly growing capital
objectives amidst the market opportunities in Sri Lanka and
government.
backdrop of the highly off-shore.
� Target new segments like High Net
unpredictable environment Worth Individuals and Non-Resident
during the year. Sri Lankans with new products and
services.

Weaknesses
W
BUSINESS
� Pressure on high NPAs (Non- � Pressure on the capital base due to
Performing Advances) due to adverse adverse economic conditions. Safeguarding Credit Quality
economic conditions. � Shrinking economy limiting business � Prudent lending approach
� Less opportunities in Retail and SME opportunities. coupled with additional
sector due to prevailing economic � Low motivation of staff due to precautionary measures to
environment. adverse economic and social manage the Bank’s overall
conditions. exposure to the Retail sector.
� Stringent management of the
Bank’s concentration risk to the
housing and condominium
sectors and other risk elevated
industries.
� Establishment of a specialised
Credit Nursing Unit to offer credit
Analysis counselling and business
2022 advisory services to support

customer rehabilitation efforts.
� Conservative approach to curtail
credit card issuance in order to
Threats T minimise the vulnerability of the
card portfolio to economic
shocks.
� Prudent approach to impairment
provisioning in line with the
Stage-wise classification (Stage 1,
Stage 2 and Stage 3) under the
� Strong Mobile Operator infrastructure � Price controls of certain goods,
SLFRS 9 (Financial Instruments)
capable of tapping into banking trading, import, and distribution
accounting standard.
payments and deposit/lending activities impacting business volumes
business. and repayment capacity of some
Driving Loan Growth
� Fintechs with potential to disrupt the borrowers.
� Selective lending with new credit
entire financial services market. � Negative economic outlook can result
facilities granted mainly to
� COVID-19 and the resultant global in bad loans and high NPAs.
multinational corporates and
uncertainty having a disruptive impact � Stress on bank cash flows due to local corporates with a strong
on the global and local economy. ad-hoc moratoriums and NPAs. issuer rating to encourage
� Weak near-term economic outlook in � Increased Cyber Security threats. investment in local manufacturing
Sri Lanka due to fiscal and external and export related sectors.
imbalances. � SME lending to drive investment
� Possibility of a Rating downgrade in modern agriculture,
affecting our borrowing rates and information technology,
terms, including attraction of foreign e-commerce and education.
currency deposits. � Aggressive campaign to grow the
pawning portfolio.

STRATEGIC THEMES
BUSINESS TECHNOLOGY
Improving Fee-based Income � Revision of the credit risk stress Enhancing Internal System
testing methodology in line with Efficiency
� Focus on promoting “Sampath
the SLFRS 9 framework thus
e-remittance”, as a convenient, fast � Documentation and internal
replacing the conventional asset
and cost effective solution for record keeping processes were
classification guidelines with the
Sri Lankans living overseas, to digitalised.
new Stage-wise (Stage 1, Stage 2
remit money to the country safely
and Stage 3) breakdown. � End-to-end automation of work
and legally.
streams under the FINDAS -
� Implementation of Recovery Plan
� Initiated a Trade Assistance Finance workflow automation
(RCP) to safeguard Bank’s financial
Programme in partnership with the module and TTDAS - International
position from internal and external
India Exim Bank to enhance trade Operations module.
stress conditions, in compliance
facilitation services offered to local
with the Banking Act Direction � Introduced RPA (Robotic Process
importers.
No. 09 of 2021. Automation) to automate the
� Set up an internal advisory team to workload of operational support
Stringent Capital Planning and
offer specialist advice to exporters. units such as the Network Services
Liquidity Management
Centre, Credit Administration and
� New customer acquisition strategy � Review and updating the Bank’s e-Remittance.
focused on Multinational contingency funding plan.
corporates and rated corporates. � Launch of the cloud migration
Strengthening Governance programme to move all non-core
� Ongoing efforts to grow digital Systems internal processes to the cloud-
transaction volumes among retail
� Roll out of a Board-approved new based environment, including the
and corporate customers.
Cloud Computing Policy Human Resource Information
Managing Cost of Funds encapsulating the requirements of System (HRIS) and the Learning
� Emphasis on growing retail savings. the latest version of the ISO Management System (LMS)
27001:2013 standard and the platform “Vidvan”.
� Promote Cash Management Banking Act Direction No. 16 of
Solutions to corporates in order to Aligning with Information Security
2021 on “Regulatory Framework on
improve overall CASA ratio. Best Practices
Technology Risk Management and
Resilience for Licensed Banks”. � Obtained the ISO 27001:2013
� Preserving Foreign Currency
recertification for a further 3-year
Liquidity. � Implemented the new Policy on period (2022 - 2025).
� Prudent management of the Bank’s Anti-Bribery and Corruption (ABC
Policy) and further strengthened � Investment in the latest Data
Net Open Position by curtailing
the Policy on Accepting and Leakage Prevention (DLP) solution
spot and forward sales.
Presenting of Gifts and Favours offering for data security.
� Restricted foreign currency lending
(Gift Policy) to reinforce the culture Updating Digital Customer
with priority credit facilities
of ethics. Interfaces
extended to importers of essential
items. � The privacy policy on the Bank’s � Significant investments to acquire
corporate website was updated to necessary hardware, software and
Effective Risk Management and equipment to expand the network
comply with the requirements of
Control of digital banking centres.
the Personal Data Protection Act
� Updating the Bank’s credit risk No. 9 of 2022.
criteria in line with the Banking Act
Direction No. 13 of 2021.

PEOPLE SUSTAINABILITY
� Installed 12 new dual-function Driving Employee Productivity Promoting Financial Inclusion

CRMs, in line with the Bank’s
� Designing and developing of a � Introduction of a network of
efforts to enhance customer
fully automated new Performance 1,300+ eZ Banking agents in
convenience and reduce cost by
Management System and partnership with Dialog Axiata
minimising cash replenishments.
Performance Based Bonus PLC.
� Introduction of video agent Scheme to dynamically record,
Community Empowerment
consoles to facilitate self on- monitor and rate employee
boarding of customers at digital performance on an ongoing � 4 new projects and 2nd phase of
banking centres. basis. the restoration of Nalawagama
Wewa were undertaken during
� Improvements to the Sampath � 124,304 training hours were the year under the “Wewata
Vishwa Corporate online banking provided to elevate employee Jeewayak” tank restoration
platform to increase connectivity skills. programme of the Bank.
with a larger number of
� Back-office functions at branches Climate Action
government institutions.
were centralised and brought
� Credit facilities in excess of
Enhancing Customer under the control of relevant
Rs 10.3 Bn were extended to
Convenience authorities to enable branch
develop Sri Lanka’s NCRE (Non-
� Introduction of the Green PIN - a teams to be redeployed towards
Conventional Renewable Energy)
safe and secure mechanism to more value adding tasks, including
Sector.
allow customers to change their driving core business activities.
debit card PIN using any Sampath � Commissioned the National
Supporting Employee Wellbeing
Bank ATM. Cleaner Production Centre of Sri
� Upward revision of travel and Lanka (Sri Lanka NCPC) to
� Launch of the Sampath iPIN self accommodation allowances to conduct an Eco Office Audit/
onboarding facility which enables assist employees to overcome Waste Audit at the Head Office.
customers to register for the inflationary pressures.
Sampath Vishwa online banking � Obtained independent
� Provision of free transport to verification for 2022 GHG
platform using their debit card
enable employees to commute to Inventory Report, marking the
PIN.
work despite fuel shortages. commencement of Sampath
� Completed the QR integration to Bank’s commitment to achieve
� Invested Rs 8.7 Mn to update
the Bank’s IPG to simplify the Net Zero status.
fitness equipment at the Head
scanning experience for QR-
Office gymnasium. Green Finance Taxonomy and Its
driven online transactions.
� Dedicated doctor for the Bank Readiness
Supporting the CBSL’s
staff to obtain free of charge � Appointment of an ESMS
Technology Integration Roadmap
online and physical consultation. (Environmental and Social
� The Bank formed a Partnership Management System) external
with Paycorp International � The “Helping Hands” counselling
consultant to advice the Bank on
(Private) Limited to promote QR- cell was revamped with its
developing appropriate policies
based payments. management handed over to a
and guidelines to conduct
team of specialist third party
business in line with the
counsellors accessible 24/7 via
recommendations of the CBSL
the special counselling hotline.
directive on Sustainable
Financing Activities for licensed
banks.

OUR APPROACH TOWARDS

SUSTAINABILITY
Socially Responsive CSR Model
Strategic
Sustainability Strategic Sustainability Framework
Framework creates
a platform to Project Management and Evaluation Process
(PMEP)
ensure the Bank’s
ESG architecture Promote Support the Promote
is continuously Stakeholder
Engagement
Socio-Economic
Progress
Sustainable
Value Creation
evolving in order
to safeguard
Address Root
Causes
of Key Community
the wellbeing of
Community Enabling
Grievances/
Capacity Equal Access to
National
communities and the

Building Education
Priorities
environment, now Uplifting

National
and in the future.
Entrepreneurship
Development Healthcare
Environmental
Standards
Protection and
Conservation
Sampath Bank’s Strategic

Sustainability Framework United Nations
Sustainable
As a leading Bank in Sri Lanka, Sampath Development Goals
Bank has consistently articulated its
commitment to assist in the national
sustainability drive. By looking at its
operations through a 3600 lens, the Bank GRI 2-9,12,13,14,16,17,18
has continued to reform its approach to
Governance (ESG) integration into the Sustainability Governance
measure its overall performance in terms
day-to-day operations of the Bank via a The operational efficacy of the Strategic
of the triple bottom line, thus going beyond
comprehensive Environmental and Social Sustainability Framework is assured
profit to consider the actual business
Management System (ESMS) while on the through a top-down governance approach
impact on people and the planet as well.
other hand, tackling broader social and in place. The Board remains the ultimate
On this basis, the Bank has implemented a
environmental issues through its Socially decision making authority on the Bank’s
Strategic Sustainability Framework to
Responsive CSR Model. In this way, the Sustainability priorities and in doing so
ensure that the pursuit of profit is not at
Strategic Sustainability Framework creates considers the expert advice and
the expense of the environment or the
a platform to ensure the Bank’s ESG recommendations of the Board Marketing
wider society.
architecture is continuously evolving in Committee, where necessary.
order to safeguard the wellbeing of
The Bank’s Strategic Sustainability
communities and the environment, now The Sustainability Committee led by the
Framework is structured as a multi-
and in the future. Managing Director operates under the
purpose tool that on one hand seeks to
deepen Environmental, Social and delegated authority of the Board in
providing oversight for all sustainability
and CSR matters. The Sustainability
Committee also serves as a liaison
between the Board Marketing Committee
and Operational Teams.

Two-tier Governance Under the guidance of the Sustainability platform continues to be widely used to
Structure for Corporate Committee, the Corporate Sustainability conduct regular trainings to enhance the
Sustainability Department (CSD) gets involved in collective knowledge of Team Sampath on
planning, implementing and monitoring of socio-economic and environment
sustainability initiatives. As part of this sustainability, especially on ESG related
Board of Directors process, each project is put through a topics.
comprehensive Project Management and
Evaluation Process (PMEP) by the CSD to
determine its capacity to achieve one or
Board Marketing more of the stated objectives of the
Committee Socially Responsive CSR Model, which is
developed through the CSR policy and CSR
procedure of the Bank.
Managing Director Continuous and ongoing training and

awareness is a key pillar of the Bank's
TV discussion on “Philosophy behind Sustainability”
overall approach to sustainability with the Chairman of the Sustainability Committee of
governance. The “Vidvan” e-learning the Bank
Sustainability Committee
Project Management and Evaluation Process
GRI 2-16
Project Management Process
Executive Director/
Joint
Chief Financial Officer
Collaborations Business Units Corporate
(Branches and Sustainability
Community
Departments) Department
and Other
Chief Human Resource Stakeholders Identify Identify
Officer (Chairman) Grievances Grievances
Evaluate Evaluate
Assistant General Manager - Execute Execute

Special Projects & Review Review
Syndications
Feedback Feedback
Chief Manager -
Marketing Board
Board of Managing Sustainability
Marketing
Directors Director Committee
Committee
Corporate Sustainability
Department
Fund Allocation for CSR
Provide Strategic Direction
Programmes

OUR APPROACH TOWARDS SUSTAINABILITY
Comprehensive Project Evaluation Process GRI 2-16,25
Identification of Community Grievances/Issues (Critical Concerns/Burden Issues)
Align to Sustainability Parameters
Re-align Re-align
Serve the
Support the Comply with
Generate Facilitate United Nations Promote
Socio- Environmental
NO Sustainable Stakeholder Sustainable Sustainable
Economic and Social NO
Benefits Engagement Development Value Creation
Progress Regulations
Goals
Decline Decline
YES
Project Evaluation by the Sustainability Committee
Project Implementation, Monitoring and Stakeholder Engagement
Step Assigning a Unit Level Sustainability Committee, Comprising Sampath Team Members, Community
1 Leaders and Customers/Social (Non-Political) Interested Parties Representing the Area
Step
Preparation of a Priority List Based on Our Study Findings/Observations and Community Members' Views
2
Step Assigning Project Objectives, Key Actions, Resource Requirements, Time Frame and
3 Involvement of Sampath Team Members
Step
Implementing the Project in Line with a Detailed Action Plan and Timeline
4
Step
Continuous Monitoring and Evaluation of Project Credentials
5
Social and
Environmental Impact Grievance Solved? No
Assessment
Yes
Reporting and Record Keeping

Three Pillars of Sustainability
We Focus on
� Socially Responsible We Focus on
Products and Services Economic Sustainability
� Good Governance
� Equal Employment Contributing to long-term
� Ethical Business Principles
Opportunity economic growth in a way
that does not harm the � Digital Leadership
� Financial Inclusion
environment or damage the � Market Share
� Community Empowerment
social fabric of communities. � Productivity and Efficiency
Programmes
Social Sustainability
Sustainability Environmental
Mobilising resources Sustainability
to find solutions that Conducting business with
reduce negative minimal negative impact
impacts on to the environment.
communities and
strengthen positive
aspects.
We Focus on
� Digital Solutions
� Paperless Operations
� Green Lending
� Environmental CSR Projects
We Create Value for
Investors Employees Customers Communities Suppliers Government

Sustainability Priorities for 2022 GRI 413-1
Green Finance Taxonomy and its

Readiness
The ESMS Implementation Committee was model and also to provide advisory services
formed with the intention of strengthening to the Bank’s customers to help them
ESMS integration at all levels of the Bank. integrate environmental and social
One of the main focus areas for the assessment concerns as part of their
Committee in 2022 was to ensure business models.
Sustainable
implementation of the regulatory
Financing and
framework for sustainable financing Increasing Access to Financial
Green Banking
activities in compliance with Sri Lanka Assistance for Investment in
Concepts
Green Finance Taxonomy guidelines issued Renewables
by the CBSL. An external consultant was Financing of new renewable energy
appointed to advise and assist the projects: Rs 5,576 Mn (Solar: Rs 626 Mn,
Committee in this regard. The Bank also Wind: Rs 4,950 Mn).
began the process of recruiting an
environmentalist to ensure ongoing Digitalisation Agenda
compliance with all required standards Year-on-year reduction in paper usage due
across the Bank’s operations and lending to digitalisation and automation initiatives.
Best Practices Net Zero Transition

Obtained independent assurance to Tied up with the National Cleaner
reaffirm that the 2022 GHG Inventory Production Centre of Sri Lanka (NCPC, Sri
report is in alignment with ISO 14064- Lanka) to explore appropriate solutions to
1:2018. drive resource efficiency and enable the Advancing
Bank to transition into a zero-waste Climate Action
organisation.
Community Capacity Building Facilitating to E-commerce

Commenced 4 new tank restoration Facilitating to promote the mainstream use
projects and 2nd phase of restoration of of LankaQR for online payments in
Nalawagama Wewa under the “Wewata partnership with our Internet Payment Community
Jeewayak” tank restoration programme. Gateway service provider, Paycorp Empowerment
International (Pvt) Limited. Activities
Promoting Financial Inclusion
Introduction of 1,338 eZ Banking agents in
partnership with Dialog Axiata PLC.

Information Security System Efficacy

Secured ISO 27001:2013 certification for a independent third party to implement the
further 3 year period (2022 - 2025), SWIFT Customer Security Programme (CSP)
Business Resilience conducted the Annual Information Security in order to improve due diligence in the
Measures to Risk Assessment covering 62 business SWIFT system, commenced the
Safeguard against units and 15 branches, appointed an implementation of ISO/IEC 22301, ISO/IEC
Cyber Threats 27035 and ISO/IEC 20000.
Free Transport Facility and Flexible “Sampath Saviya” Business Startup

Working Arrangements Advisory Service
Enable team members to report to their A dedicated internal advisory team to offer
assigned work location and Work From guidance regarding the business
Home and Work From Nearest Branch registration process, information to
arrangements. connect with the relevant institutions and
Protecting the other vital information for new startup
Wellbeing of People entrepreneurs.
and Communities
During the “Cycle to Work” Initiative Launch of “Tap & Go” Tourist Fuel Pass
Economic and Fuel Promote cycling habit among team A prepaid card system for foreign nationals
Crisis members. to use US Dollars to purchase fuel.
Business Continuity Planning

Formulating a Recovery Policy setting out
Focus on detailed protocols along with appropriate
Emergency governance and oversight structure to be
Preparedness in activated in an unforeseen event.
Uncertain Times

Principles that Drive Our Commitment to Sustainable Development GRI 413-1
� Livelihood development through

“Sampath Saviya” entrepreneurship
development programme.
� “Wewata Jeewayak” tank restoration programme to

Integrating facilitate agricultural growing activities in Sri Lanka’s
sustainability into the dry and intermediary zones.
core business strategy
� “Gasai Mamai Pubudu Pothai” vegetable gardening
programme conducted in schools.
Support and encourage
customers to enable them � “Plant a Seed for Tomorrow” – vegetable gardening
to strike a balance between programme.
financial gain and their
responsibility to society and
environment � “Hope for a Life” programme to uplift
national healthcare standards.
� Free medical benefits offered to senior

citizens under “Sampath Sanhinda Saver”
Continuously updating the
account.
range of offerings to
promote product/service
responsibility � “Education for All” programme to
Committed to ensure all communities have equal
Sustainable access to high quality primary and
Development secondary education and career
Working continuously to guidance.
protect the environment,
respect human rights and
uphold labour standards
� Female representation in leadership
roles of the Bank’s management teams.
� Female representation in leadership

roles is a key aspect in the community
Promote sustainable
development programmes undertaken
lending and refrain from
by the Bank.
lending to industries that
are against Sampath Bank's � “Ladies 1st” saving account - specially
Environmental and Social designed product for females.
Complying with all Management criteria
applicable laws � "Wewata Jeewayak" tank restoration programme
and regulations to restore water related ecosystems.
� “Life to Our Mangroves” – Mangrove restoration

programme.

� Promote sustainable lending � “A Breath to the Ocean“ - Oceanic

through financing to renewable ecosystem restoration programme.
energy sector.
� “Life to Our Mangroves” – Mangrove
� Invest in solar migration projects at restoration programme.
branches to increase the share of
renewable energy in the Bank’s � Turtle conservation programme.
overall energy mix.
� Internship opportunities and career guidance � Invest in emission management and

for school leavers and undergraduates. energy management projects at the
� All confirmed employees were granted a 10.5% Bank's Head Office and branch
annual salary increment. network.
� Biodiversity conservation project at

Opatha, Galle.
� Contribution to the Wildlife and

Nature Protection Society of Sri
Lanka.
� Launched ‘Sampath Bank iPIN’, the latest trend to
self-onboard with Sampath Vishwa online banking � Tree planting programmes including
facility. "Gasai Mamai Pubudu Pothai",
“10,000 Trees Campaign”.
� Provide equal opportunities for all employees. � Vigilance to ensure that Bank’s
products are not used in the
� Zero tolerance of any form of unfair discrimination
furtherance of financial crime,
on the basis of race, gender or disability.
such as money laundering,
� Ratio of basic salary at the entry level for males and financing of terrorism, fraud and
females is 1:1. corruption.
� Sampath Bank has zero tolerance

� Structured housing loan solutions for customers. for bribery and corruption by any
Employee or Director.
� Year-on-year reduction in paper waste attributed � Strategic partnerships to address

to increased digitalisation. the issues on climate change,
� Wide range of products and services catering to a water, education, community
range of banking needs also enhancing empowerment and
convenience at affordable prices. entrepreneurship development.
� Invest in emission management and energy

management projects at the Bank's Head Office
and branch network.
� Biodiversity conservation project at Opatha, Galle
� Contribution to the Wildlife and Nature
Protection Society of Sri Lanka.
� Tree planting programmes including
"Gasai Mamai Pubudu Pothai", “10,000
Trees Campaign”.

OUR VALUE CREATING BUSINESS MODEL

GRI 2-6
CAPITAL INPUTS
The financial resources

� Rs 39.1 Bn Market
obtained from external sources
Capitalisation
(deposits, equity and debt capital) as
� Rs 126.4 Bn Equity Capital
well as retained profits that together create
a foundation to grow and sustain the business.
� Rs 1,103.2 Bn Deposit Base MATERIAL
TOPICS
Refer pages 79 to 84 for more information.
INFLUENCING
� Investment in Physical Channels
OUR
� Deployment of eZ Banking STRATEGY
The physical and digital infrastructure that enable the Bank Agents Refer pages 58 to 61
to carry out its core business activities. � Digital Banking Solutions

� IT Infrastructure
Refer pages 85 to 93 for more information. � Correspondent Banks and
Exchange Companies
� Corporate Value Proposition

The unique characteristics, systems and processes that safeguard � Information Security
Architecture Financial Capital
Sampath Bank’s reputation and competitive position.
� BCP Framework � PAT: Rs 13.1 Bn
Refer pages 94 to 100 for more information. � ROA (A/T): 1.01%
� ROE (A/T): 10.95%
CAPITALS
� EPS: Rs 11.48
� 3,948 Employees
� Remuneration and Benefits
The skills, expertise and commitment of Team Sampath that enable Structure Manufactured Capital
the Bank to implement its strategy and achieve corporate objectives. � Learning and Development � 1,338 eZ Banking
� Talent Development Agents
Refer pages 101 to 113 for more information. � 19 Digital Banking
� Motivation and Team Spirit
Centres
� Improving Product Relevance

� Product Innovation
The strength of the relationships with key stakeholders � Supporting Customer Digital For Our People
that enables the Bank to maintain its competitive edge. Adoption
� Learning and
� Customer Engagement
Refer pages 114 to 131 for more information. � “Wewata Jeewayak” Programme
Development
Opportunities
� “Sampath Saviya” Programme � Career Progression
� Recognition
� Environmental and Social Schemes
� Work-life Balance
Management System (ESMS)
The contribution made by the Bank to reduce Initiatives
� Resource Efficiency Programmes
� Competitive
the deterioration of natural resources. � Sustainable Financing Benefits Structure
� “Gasai Mamai Pubudu Pothai”
Refer pages 132 to 147 for more
Programme
information.
� “A Breath to the Ocean”
Programme
EXTERNAL ENVIRONMENT

VALUE CREATION PROCESS

To be “The Growing Force in
Our Vision Sri Lankan Financial Services”
G
VALUES AND CORPORATE CULTURE O
V
STRATEGIC THEMES E
R
Business People Technology Sustainability
N
STRATEGIC OBJECTIVES
A
Competitive Positioning Cost Management Customer Experience
N
� � �
C
� Operational Excellence � Business Resilience � Corporate Citizenship
E
UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS
FR
KEY ENABLERS OF VALUE CREATION PROCESS
AM
Business Lines Support Functions
� Corporate Banking � Global Banking � Operational Support � Other Business Units
EW
� Consumer Banking � Treasury � Legal, Administrative and HR Support � Customer Care Centre
� SME Banking � IT and Data Support
OR
OUTPUTS FOR CAPITALS
K, CO
Intellectual Capital Human Capital Social and Relationship Capital Natural Capital
� Best Commercial Bank and Best Retail Bank 2022, � Profit per Employee: � Persons Benefitted under � Solar Power Generation
Sri Lanka - World Finance Banking Awards, UK Rs 3.33 Mn the “Wewata Jeewayak” through Branch Network:
� 1st Runner-up - Best Corporate Citizen Sustainability � Staff Promotions: Programme: 4,370 348,775 kWh
MPLIA
Awards 2022 197 � Persons Benefitted under � Cost saving through Slipless
� Most Loved Banking Brand - LMD Brands Annual 2022 � Investment in the “Hope for a Life” Banking and Cash Deposit
� Overall Gold Award - National ICT Awards (NBQSA) 2022 Training and Programme: 7,440 Machines: Rs 406.2 Mn
� Dragons of Asia 2022 Awards Professional � Free Medical Benefits � Financing of Renewable
� LankaPay Technnovation Awards 2022 Studies: Rs 56.6 Mn offered under “Sampath Energy Projects: Rs 5,576 Mn
� CSR Brand of the Year - SLIM Brand Excellence 2022 Sanhinda Saver” Account: � Carbon Footprint of the
� Market Leader - CSR, Sri Lanka - Euromoney Magazine Bank: 11,645 tCO2e
NCE
Rs 211 Mn
2022 � Loyalty Points offered for
� Best Bank for CSR, Sri Lanka - Asiamoney Magazine 2022 Sampath Credit
Cardholders: Rs 288.4 Mn
AN
VALUE WE CREATE
For Our Bank For Our Investors and Shareholders For Our Local Communities For the Government
D
� Higher Business Volumes � Net Asset Value per Share: Rs 110.44 � Provide Internship Opportunities � Taxes Paid:
RI
� Strong Competitive Positioning � Gross Dividend: Rs 5,264 Mn � Groom Young Business Leaders Rs 14.9 Bn
� Increased Customer Loyalty � Dividend per Share: Rs 4.60 � Commenced 4 New Tank
S
Higher Customer Satisfaction Dividend Yield: 13.45 % Restoration Projects and 2nd
K
� �
Phase of Nalawagama Tank
� Enhanced Brand Value � Interest Paid on Debentures: Rs 3.2 Bn
Restoration Project
M
� Greater Employee Satisfaction

Reputation as an Employer of
A
� For Our Customers For Our Environment

Choice
N
Ì Customer Convenience � 536 Trees Saved through Slipless Banking

� Long Term Business
A
Ì Better Reach and Accessibility and Cash Deposit Machines G

Partnerships
Ì Financial Inclusion � 15,367 Trees Planted through
E
Environmental CSR Programmes
M
E
N
WAY FORWARD T
Art of Transformation
Rethink, Reconfigure, Rescale
OPPORTUNITIES AND CHALLENGES

MATERIAL TOPICS
GRI 3-1,3
Our Materiality Monitoring Process
Unprecedented
Identify Material Topics that have
Identification the potential to impact our earnings
economic, social and

of Material sustainability and ability to create
Topics value for our stakeholders
political challenges
prompted the
Prepare
Bank to consider
Cluster potential Material Topics to
Clustering and categorise and map them with the
“Macroeconomic Categorisation capitals
Headwinds” as a
new Material Topic
Analyse and identify organisation’s
for 2022. Management objectives, risks and impact on
Discussions stakeholders
Materiality
The principle of Materiality draws
attention to the most significant aspects
that affect the Bank's ability to create and Understanding the stakeholders’
Plan Materiality
preserve value over time and therefore perceptions on what is important to
Assessment
the management is of the view that the Bank
Survey
having a good understanding of what is
Material, helps business units to focus
their attention to ensure such matters
receive top priority in the Bank’s strategic
Prioritising Material Topics to
planning and risk management processes. Materiality
indicate its significance to the Bank
Information what is material is obtained Matrix
and stakeholders
in many ways - by assessing the risks and
opportunities in immediate operating
environment, studying the changes
to legal and regulatory frameworks,
analysing global trends, scrutinising Engage
Validation of the Materiality Matrix
research reports and other published
Validation by Sampath Bank’s leadership
information as well as through insights
gained from stakeholder interactions.
Information obtained through these

sources are further analysed to determine Integration into the Bank’s Business
the significance of each topic by comparing Strategy to achieve stakeholder
the probability of its occurrence against Integration
deliverables
the magnitude of its impact. The Annual
Materiality Assessment is the primary
tool that facilitates the determination of
Analyse and
Material Topics. Embed Continuous and ongoing monitoring
to take account of changes in the
Monitor and operating environment and respond by
Track Records realigning the Bank’s strategy to drive
and sustain business and find new and
innovative ways of doing businesses

GRI 3-2
Changes to Material Topics in 2022
The findings from the 2022 Materiality Assessment indicated that 21 Material Topics identified in previous years' remained
relevant for Financial Year (FY) 2022 as well. The topic referring to the “COVID-19 pandemic and its impact” which was
discussed in the FY 2021 Report was no longer considered to be material as the pandemic had seemingly dissipated by end
of 2021.
However, a new Material Topic titled “Macroeconomic Headwinds” was deemed important enough to be included as a new
Material Topic. The rationale for this inclusion stems from the need to consider possible realignment of the Bank’s strategy
in response to the risks posed by the unprecedented economic crisis that erupted in early 2022 along with the civil unrest,
fuel and energy shortages and political instability, all culminating in a never-before-seen level of uncertainty in the country.
Material Topics Level of Materiality Topic GRI Linked to Page Reference to

Boundary Relevance Strategy Management
To To through Approach
the Bank Stakeholders
Economic Topics
1 Profitability and H H Internal/ 201, 203, 207 Financial Capital 477
financial stability External
2 Macroeconomic H H Internal/ n/a All Six Capitals 478
headwinds External
3 Physical channels H H Internal/ 202 Manufactured
478 - 479
External Capital
4 Digitalisation agenda H H Internal/ n/a Manufactured
479
External Capital
5 Business continuity H H Internal/ n/a Intellectual
480
planning External Capital
6 Corporate brand H M Internal/ n/a Intellectual
480 - 481
image/goodwill building External Capital
7 Information security H H Internal/ 418 Intellectual
481
External Capital
Social Topics
8 Talent acquisition and H M Internal 401, 405 Human Capital
482 - 483
management
9 Learning and H M Internal 404 Human Capital
483 - 484
development
10 Employee relations H M Internal 402 Human Capital
484 - 485
11 Employee engagement H M Internal n/a Human Capital 485
12 Employee health and H M Internal 403 Human Capital

486
safety
13 Anti-corruption H H Internal/ 205 Human Capital
486 - 487
practices External

MATERIAL TOPICS
Material Topics Level of Materiality Topic GRI Linked to Page Reference to

Boundary Relevance Strategy Management
To To through Approach
the Bank Stakeholders
14 Customer convenience H H Internal/ n/a Social and

External Relationship 487 - 488
Capital
15 Customer health and H H Internal/ 205, 416 Social and
safety External Relationship 488 - 489
Capital
16 Sales promotions, H M Internal/ 417 Social and
marketing External Relationship
communication and Capital 489
information availability
on Bank’s products and
services
17 Customer privacy H H Internal/ 418 Social and
External Relationship 489 - 490
Capital
18 Complaint H H Internal/ 418 Social and
management External Relationship 490 - 491
Capital
19 Research and H M Internal/ n/a Social and
development External Relationship 491 - 492
Capital
20 Financial inclusion H M Internal/ n/a Social and
agenda External Relationship 492 - 493
Capital
21 Community H H Internal/ 413 Social and
development External Relationship 494
Capital
Environmental Topics
22 Environment H H Internal/ 302, 305 Natural Capital 495 - 496
protection and External
conservation
H High M Medium L Low

Materiality Matrix
High Medium Low Low Medium High

1
Materiality to Stakeholders
Materiality to the Bank
10
11
12
13
14
15
16
17
18
19
20
21
22

CONNECTING WITH OUR STAKEHOLDERS
GRI 2-29
As a financial services provider, relationships Being a large-scale banking institution, A stakeholder-specific management ethos
are a fundamental part of the way we Sampath Bank has numerous stakeholders, supports our endeavour to connect with
operate and we believe that by who for practical reasons have been and earn the trust of stakeholders.
understanding the most pertinent to our classified as internal and external. Internal
stakeholders, we are able to respond stakeholders are employees, while external
appropriately to deliver their expectations. stakeholders are further segregated based
Equally importantly, listening, engaging and on how they link to our core business
partnering with stakeholders helps to across our value chain and/or how their
reorient our business strategies to create actions affect the Bank’s ability to achieve
positive outcomes for the environment and its objectives.
the wider society.
Our Stakeholders and Management Ethos

External
Shareholders and Other

Investors
Management Etho:
Ensuring long-term shareholder/investor
value and upholding the rights of the
shareholder and supporting a broader
shareholder/investor constituency to
ensure their wealth maximisation.
Internal Customers
Regulatory Bodies
Management Etho:
Management Etho:
Ensure compliance with Uphold the customers’
all legal and regulatory right to demand a stable
requirements. Employees and progressive banking
environment which
Management Etho:
provides a superior
Commitment to create a service platform and
conducive environment for the promotes customer
employees to develop and reach choice/convenience.
their potential, both professionally
and personally.
Suppliers and Service

Community
Providers
Management Etho: Management Etho:
Striking the right balance between Working in tandem with global and
cost and quality and promoting local mandates which safeguard
ethical and transparent sourcing the environment and promote
practices. community empowerment.

Stakeholder Engagement Process

Given the diverse needs and expectations of our various stakeholder groups, we readily acknowledge that a one-size-fits-all engagement
strategy is unsustainable and therefore have implemented stakeholder-specific approaches to identify stakeholder perceptions, understand
their expectations and find bespoke solutions for their concerns. Moreover, we also use these engagement mechanisms as an opportunity
to report back on our progress, and review stakeholder satisfaction on actionable initiatives taken by the Bank.
� Evaluate the material topics and stakeholder � Identification of stakeholders.

feedback. � Segmentation of stakeholder
� Design and implement initiatives in line with the categories.
Management Philosophy for each � Determine the underpinning
stakeholder group. Management Philosophy for
Action Plan Stakeholder
� Measure effectiveness of the each stakeholder group.
and Post Mapping
initiative and monitor feedback.
Review
� Monitor deficiencies and get
corrective actions.
Stakeholder
Engagement
Process
� Identify and prioritise risks and � Identify levels of engagements.
opportunities. � Evaluate and review channels of
� Identify and prioritise material engagement.
Designing
matters. Engagement � Design the engagement model.
Engagement
� Engage and communicate with Model � Formulate policies and
stakeholders. procedures if necessary.
GRI 2-28
Memberships of Associations
Name of the Association Membership Status

Sampath Bank PLC held
membership of the The American Chamber of Commerce in Sri Lanka Member
industry based Association of Compliance Officers of Banks, Sri Lanka Member
associations as well as Association of Primary Dealers (APD) Member
national and international Clearing Association of Bankers Member
advocacy organisations Exporters’ Association of Sri Lanka Member
International Chamber of Commerce - ICC Sri Lanka Member
with the motive of
Italian Business Council Member
maintaining sustainable
Lanka Clear (Pvt) Limited Member
relationships with Lanka Financial Services Bureau (LFSB) Member
stakeholders and Lanka SWIFT User Group (LSUG) Vice Chairman and Treasurer
contributing to the Leasing Council of Bankers of Sri Lanka Member
betterment of the industry National Chamber of Exporters of Sri Lanka Member
and nation as a whole. Payment Card Industry Association of Sri Lanka Executive Committee Member
Society for Worldwide Interbank Financial Telecommunication (SWIFT) Member
Sri Lanka Bank's Association (Guarantee) Limited Member
Biodiversity Sri Lanka Patron Member
Sri Lanka Forex Association (SLFA) Member
The Association of Banking Sector Risk Professionals - Sri Lanka Member
The Ceylon Chamber of Commerce Patron Member
The Employers’ Federation of Ceylon Member
The Financial Ombudsman Sri Lanka (Guarantee) Limited Member
The National Chamber of Commerce of Sri Lanka Member

Stakeholder Engagement Mechanism
Shareholders and Other Investors Value Distributed to Shareholders and Other Investors
Market Capitalisation: Return on Equity (A/T): Earnings per Share: Gross Dividend:
Rs 39.1 Bn 10.95% Rs 11.48 Rs 5.3 Bn
Priorities/Expectations Engagement Engagement Frequency
Relevant to the Mechanism
Stakeholder Annually Quarterly Periodically Regularly 24 hours As and
7 days When
Required
� Shareholder Shareholder relations

engagement with the forums
Board
General meetings
� Shareholder views on
key governance and Annual Report
policy matters
� Development of Interim Financial
shareholder Statements
communication Disclosures and
channels announcements to the
� Return on equity and CSE
interest gains
Corporate website
� Strategy and business
continuity General
� Financial performance correspondence
CSR projects
Our Strategic Response to the Stakeholders Specific Stakeholder Priorities for 2022
� Maintaining a consistent bottom line � Financial resilience, managing liquidity, credit risk, capital
adequacy and discretionary costs amidst the economic
� Ensuring a sustainable return on investment
crisis
� Engaging in greater transparency in line with the
� Managing the Net Interest Margin (NIM) on the back of
Corporate Governance Codes
rising interest rates
� Maintaining the Bank’s reputation and credibility
� Safeguarding long term Asset Quality in light of economic
� Safeguarding asset quality uncertainty for the foreseeable future
Our Financial Capital Social and Relationship Capital Intellectual Capital

Response: Pages 79 - 84 Pages 114 - 131 Pages 94 - 100

Community Value Distributed to Community
Beneficiaries from CSR Projects: Investment on CSR Projects: Volunteered Employees Engaged:
82,535 Rs 31.3 Mn 2,743
7 days When
Required
� Community capacity Ground level

building interactions with
� Community community leaders by
empowerment staff
� Social welfare of Interactions with social

communities groups and volunteer
� Environmental organisations
protection and Community and
conservation environment grievance
� Preservation of local handling mechanism
culture
Discussions with
government
organisations
Discussion with other

organisations,
community and opinion
leaders on community
development efforts
Digital media-based
forums
CSR projects
� Socially responsive CSR model � Livelihood development amidst the challenges posed by the
current economic crisis
� Transparency and Governance
� Uplift National Healthcare Standards amidst the challenges
� Community engagement
posed by the current economic crisis
� Employee volunteerism
� Become a catalyst for change
Our Social and Relationship Capital Natural Capital

Response: Pages 114 - 131 Pages 132 - 147

Customers Value Distributed to Customers
eZ Banking Agents: Product Rationalisation “Sanhinda Saver” Free Medical Benefits Provided: Launching New Products
1,338 Process Rs 211 Mn

7 days When
Required
� Customer service One-on-one feedback from

customers who visit the
� Customer security
Bank
� Satisfaction on
Customer surveys
existing products
conducted via traditional or
� Brand perception non-traditional research
and reputation techniques
� Customer Social media interactions
convenience
Customer complaint
� Need for handling mechanism
innovations and ATL (Above the Line), BTL
customised (Below the Line) and digital
solutions communications
� Communication Correspondence
methods
SMS Alerts
� Special promotions
� Timely and relevant Corporate website
information on Sampath Vishwa (internet
products and banking) portal
services Customer Care Centre
� Customer touch-
CSR projects
points
� Customer benefits Feedback forms - paper
and rewards based/electronic mediums
� Loyalty recognition
Our Strategic Response to the Stakeholders Specific Stakeholder Priorities for 2022 Our Response:
� Effective complaint resolution � Provide financial advisory services

� Maintain service excellence to assist customers to manage the
Manufactured Capital
economic crisis
� Deliver technology-driven banking solutions Pages 85 - 93
� Improving customer touch points
� Continuous introduction of innovative products
which promote greater customer convenience � Increasing customer digital adoption
Social and Relationship
� Effective marketing and communication Capital
Pages 114 - 131
� Maintaining data security and customer privacy
� Promoting island-wide customer inclusiveness
� Better market share

Regulatory Bodies Value Distributed to Government
Tax Expense: Promoting Inward Supporting SME Sector Growth Promote Green Financing
Rs 24 Bn Remittances

7 days When
Required
� Proper and prompt Policy directives/

action on regulatory circulars, guidelines
requirements and operating
introduced from time instructions
to time
Meetings and forums
� Formulate the Bank’s
policies in line with the Press releases
broad objectives of
the Central Bank of Periodic and one-off
Sri Lanka and Monetary returns
Board On-site and off-site
supervision
Training programmes
� Compliance with regulations � Deepen the penetration to the SME sector

� Rectification actions on supervisory concerns � Promote inward remittances
� On-time submission of statutory returns and statutory � Support the government’s digital banking roadmap
payments
� Response and contribution at meetings/forums and to
initiatives of the regulators
� Micro, small and medium entrepreneurs lending and
entrepreneurship development
� Supporting the non-conventional renewable energy
sector
� Support to maintain stability in money and foreign
exchange markets
� Help investors to make better investment decisions
Our Financial Capital

Response: Pages 79 - 84

Employees Value Distributed to Employees
Internal Staff Promotions: Total Training Hours: Investment in Training and All Employees were Granted
197 124,304 Professional Studies: 10.5%
Rs 56.6 Mn Salary Increment in 2022
Priorities/ Engagement Engagement Frequency

Expectations Mechanism
Relevant to the Annually Quarterly Periodically Regularly 24 hours As and
Stakeholder 7 days When
Required
� Ethical Open-door policy

employment Employee forums
practices
Employee suggestion schemes
� Career
Grievance-handling procedure
development
opportunities Employee social committees
� Employee Feedback forms

communication Business unit level meetings
and feedback Intranet
� Rewards/ Memorandums/Directives
recognition
Newsletters
� Employee
Training
well-being
Get-togethers/Events
� Work-life
balance HR Hotline
CSR projects
Online groups
Our Strategic Response to the Stakeholders Specific Stakeholder Priorities for 2022 Our Response:
� Competitive rewards and benefits to attract � Support employees to manage the

and retain best talent in the market inflationary pressures and address
Human Capital
� Promote greater diversity and inclusion the challenges arising out of the fuel
Pages 101 - 113
� Develop from within through training and crisis
development � Develop and inculcate a Bank-wide Social and Relationship
� Encourage greater engagement performance-driven culture Capital
� Performance-based incentives Pages 114 - 131
� Focus on Women Leadership
� Effective handling of grievances Development
� Maintain high standards of occupational
health and safety
� Ensure employees‘ welfare
� Foster a sense of belongingness

Suppliers and Service Providers Value Distributed to Suppliers and Service Providers
Timely Payments Number of Registered Suppliers: Creating Opportunities for Supplier

745 Growth

7 days When
Required
� Developing strategic Interactions through

partnerships the purchasing policy
� Promoting transparent Feedback evaluations
and ethically
responsible business Meetings
practices
Visits to supplier
� Continuous
workshops/offices
communication with
suppliers and service Written
providers communications
� Regular reviews on (letters and e-mails)
quality of goods and Reviews and
services assessments
� Engaging in fair and equitable procurement � Supporting our suppliers by making payments on time to
manage their finances during the challenging period
� Supplier risk assessment mechanism
� Contractual agreements to promote sustainable

procurement
� Local sourcing
� Registration of multiple suppliers and service providers

as a BCP measure
� Maintenance of suppliers and service providers register
� Developing SME entrepreneurs whilst purchasing goods

which meet the Bank’s standards at a reasonable cost
thus enjoying a win-win situation for both the Bank and
the supplier
Social and Relationship

Our
Capital
Response: Pages 114 - 131

OUR SUSTAINABILITY JOURNEY
2022 2021
Ì Appointed a professional consultancy firm to strengthen the ESMS and suggest Ì Appointed the ESMS Implementation
improvements in line with the Green Financing Taxonomy and IFC performance standards. Committee to strengthen the
Ì Obtained SLSAE-3000 based Integrated Reporting Assurance Statement. Environmental and Social
Management System (ESMS).
Ì Commissioned the National Cleaner Production Centre of Sri Lanka (NCPC, Sri Lanka) to
conduct an Eco Office Audit and Waste Audit at the Head Office. Ì Structured and invested in a ‘Deep
Ì Obtained independent verification to reaffirm that the 2022 GHG Inventory Report is in Discounted Bond’ issued by LVL
alignment with ISO 14064-1:2018. Energy Fund PLC, which is thought to
Ì Launched “A Breath to the Ocean” Oceanic Biodiversity Restoration Programme covering be the first of its kind for a listed
the three pillars of coral replanting, mangrove restoration and turtle conservation. corporate in the energy sector.
Ì Gold recipient of “CSR Brand of the Year” organised by Sri Lanka Institute of Marketing. Ì Launched “Gasai Mamai Pubudu
Ì Sampath Bank was recognised as the “Market Leader - CSR, Sri Lanka” by the Euromoney Pothai” Tree Planting Programme for
Magazine 2022 and as the “Best Bank for CSR, Sri Lanka” by Asiamoney Magazine 2022. school children.
Ì Expanded the investment on

“Wewata Jeewayak” Tank Restoration
Programme by restoring three tanks
in Anuradhapura, Puttalam and
Kurunegala districts.
2013 2014
� Complied with GRI G4 Standards Ì Commencement of Integrated

- ‘In Accordance Comprehensive’ Reporting journey.
issued by Global Sustainability
Ì Obtained the Carbon Conscious
Standards Board.
Office certificate.
� Started measuring annual GHG
Ì Launch of the solar migration project
emissions attributed to the
to increase the share of renewable
Sampath Bank Head Office to
energy in the Bank’s overall energy
determine Bank’s Carbon
mix.
Footprint.

2020 2019 2018

Ì Expanded the “Sampath Ì The Bank was awarded the ‘Carbon Neutral Ì Initiated “Sampath Green
Saviya” Entrepreneurship Certification’ by Climate Smart Initiatives (Pvt) Inventor” CSR programme, a
Development Programme Limited (ClimateSI), declaring Bank’s Head national level competition to
to help businesses Office as ‘Carbon Free’ for the year 2018. promote eco-friendly
affected by the pandemic inventions.
induced economic Ì Conducted a series of special
slowdown, to strengthen entrepreneurship development workshops for Ì Joined hands with
their resilience against pensioners. Biodiversity Sri Lanka to
unforeseen externalities. restore 10 hectare of
Ì Collaborated with the Provincial Department
degraded forest in
of Agriculture - North Western Province to
Halgahawala, Opatha to
facilitate the “Wayamba Isuru” organic farmers
support conservation of
market.
biodiversity.
Ì Special recognition by the Small Hydro Power
Developers Association for the support
extended towards sustainable development
and energy security of Sri Lanka.
2015 2016 2017
Ì Sampath Bank 2015 Annual Report was certified as a Ì Launched the first-ever Ì Complied with GRI Standards
“Carbon Neutral Product” by Sri Lanka Carbon Fund (Pvt) Carbon Neutral Hotel -‘In Accordance
Limited. Stay programme in Comprehensive’ issued by
Sri Lanka. Global Sustainability Standards
Ì Became one of the first signatories of the Sri Lanka Banks’
Board.
Association (SLBA) led Sustainable Banking Initiative.
Ì The scope of the annual GHG
Ì Conducted the Carbon Neutral Corporate Social
Inventory Report was
Responsibility Award Ceremony for employees in the Bank.
extended to cover the
Ì Crowned as the winner of the “Best Corporate Citizen” at the Sampath Bank Head Office as
Best Corporate Citizen Sustainability Awards 2015 organised well as all 229 Branches for
by Ceylon Chamber of Commerce. the first time.
Ì Gold recipient of “CSR Brand of the Year” organised by

Sri Lanka Institute of Marketing.

The most complex
trapeze acts are rarely
achieved in isolation,
and require incredible
levels of trust between
each artist – based on
the implicit certainty
that the strength and
stability of one will
support and protect the
other performer.
BELIEF IN
CONNECTION
MANAGEMENT DISCUSSION
A N D A N A LY S I S
The connections and bonds we have formulated over time ensure that we remain
steadfast – we are always prepared to support and assist our partners as they
launch into a future of possibilities.
Operating Environment ....................................................................... 74 Business Reports

Consumer Banking.
Banking...............................................................................150
............................................................................. 150
Capital Management Reports
Deposits...............................................................................................150
Deposits ............................................................................................ 150
Financial Capital ..................................................................................... 79
Loans and Advances.......................................................................
Advances.......................................................................151
151
Manufactured Capital.
Capital............................................................................ 85
Cards...................................................................................................
Cards ...................................................................................................152
152
Intellectual Capital..................................................................................
Capital.................................................................................. 94
Bancassurance.................................................................................
Bancassurance.................................................................................153
153
Human Capital.
Capital.......................................................................................101
..................................................................................... 101
Corporate Banking...............................................................................
Banking...............................................................................154
154
Social and Relationship Capital.........................................................
Capital.........................................................114
114
Corporate Credit..............................................................................
Credit..............................................................................154
154
Natural Capital.
Capital.......................................................................................132
..................................................................................... 132
Corporate Finance...........................................................................
Finance...........................................................................155
155
Foreign Currency Banking Unit.
Unit.....................................................156
................................................... 156
SME Banking..........................................................................................
Banking..........................................................................................157
157
Global Banking......................................................................................
Banking......................................................................................158
158
International Trade..........................................................................
Trade..........................................................................158
158
Bank Notes Operation....................................................................
Operation....................................................................158
158
Remittance..........................................................................................159
Remittance ....................................................................................... 159
Nostro Accounts, Correspondent Banks and Exchange
Companies....................................................................................
Companies ....................................................................................160
160
Treasury..................................................................................................
Treasury..................................................................................................161
161
Operational Support ...........................................................................162
......................................................................... 162
Network Services Centre.
Centre................................................................162
.............................................................. 162
Central Cash Department..............................................................
Department..............................................................162
162
Recoveries...........................................................................................162
Recoveries ........................................................................................ 162
Performance of Subsidiaries
Sampath Centre Limited.
Limited.....................................................................164
................................................................... 164
SC Securities (Private) Limited.
Limited...........................................................164
......................................................... 164
Siyapatha Finance PLC........................................................................
PLC........................................................................165
165
Sampath Information Technology Solutions Limited..................

Limited..................165
165
OPERATING ENVIRONMENT
Global Economic Update alarming slowdown in economic activity in Advanced economies decelerated rapidly in
After growing by 5.9% in 2021 and 2022 comes a mere two years after the 2022 to record growth of just 2.5%
experiencing the strongest expansion in pandemic-induced recession of 2020, has (2021: 5.3%) amidst low investor confidence,
80 years, the global economy stumbled raised serious concerns regarding the high inflation and post-pandemic monetary
once again in 2022 with growth rates onset of a deeper worldwide recession in policy tightening. The US economic growth
struggling to reach 2.9%. The fact that the 2023. contracted sharply on the back of one of the
Key Global Trends - 2022
Inflation remained high worldwide, driven by demand pressures attributed mainly Global trade deteriorated throughout
to the lagged effects of accommodative policy support offered by governments 2022, in direct correlation to the
during the pandemic and the COVID-19 induced supply chain disruptions. The IMF slowdown in economic activity across
estimates that global headline inflation (based on the world consumer price index), major economies. Weakening trade
reached 8.8% in 2022, its highest level since 1996. Meanwhile, hyperinflationary was reflected in the slowdown in
conditions were also observed in some countries, being the result of significant global industrial production as well.
weakening of domestic currencies against the US Dollar. Global Trade Growth
%
World Inflation (Average Consumer Prices)
Weak Global Trade

12
%
High Inflation
10 10
8 8
6 6
4
4
2
2
2021 10.6
2022 4.0
2023E 1.6
0
0
2023E
2021
2011
2001
1997
1998
1999
2000
2002
2003
2004
2005
2006
2007
2008
2009
2010
2012
2013
2014
2015
2016
2017
2018
2019
2020
2022
Source: World Bank Publication, Global

Source: International Monetary Fund, World Economic Outlook Database, October 2022
E - Expected
Economic Prospects, January 2023
E - Expected
Global Commodity Prices, after hitting a peak in June 2022, gradually eased thereafter owing to slowing global growth.
Global Commodity Prices

%
200
Declining Commodity Prices
150
100
50
0
Dec-18
Mar-19
Jun-19
Sep-19
Dec-19
Mar-20
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Sep-22
Dec-22
Energy Metals Agriculture Index (Base year 2010 = 100)

Source: World Bank, Commodity Markets Outlook, October 2022

most aggressive monetary policy tightening the external sector, the Rupee was devalued in March 2022 and consequently the LKR to
cycles in recent history, while growth in the depreciate by 41.4% against the US Dollar by end April 2022.
Euro area continued to be stymied by
unprecedented energy shortages and rising Meanwhile, the massive scarcity of key imported raw materials and other essentials had
inflation triggered by the Russia-Ukraine a cascading effect that saw inflation soaring to historical highs, and sent disposable
conflict. incomes dwindling.
Key Indicators of Economic Health - Sri Lankan Economy 2022

These trends were mirrored across
Emerging Market and Developing Contribution to Quarterly Real GDP Growth (YoY) (Base year 2015 = 100)
Economies (EMDE) as well. Weaker global %
trade and investment along with tighter 20
financing conditions saw EMDEs as a 15
whole registering growth of just 3.4% in 10
2022 (2021: 6.7%). 5
0
(5)
(10)
Outlook and Prospects
(15)
for the Global Economy
(20)
Mar-19
Jun-19
Sep-19
Dec-19
Mar-20
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Sep-22
Global growth is forecast to soften
even more in 2023. The combination
of slow growth and tightening Agriculture Industries Services Taxes less Subsidies GDP
financial conditions will likely be Source: Department of Census and Statistics on Products
further exacerbated by higher
inflation, even tighter policy, Movements of Headline and Core Inflation (YoY) (Base year 2013 = 100)
financial stress, deeper weakness in %
80
major economies, and rising
70
geopolitical tensions, to the extent
60
that it is widely expected to trigger a 50
full scale global recession. As a first 40
step to safeguard against such an 30
eventuality, urgent global action is 20
needed to implement a systematic 10
debt distress framework to assist 0
Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Sep-22
Dec-22
EMDEs to achieve greater economic

stability.
Headline Inflation based on the CCPI Core Inflation based on the CCPI
Headline Inflation based on the NCPI Core Inflation based on the NCPI
Sri Lankan Economy Source: Department of Census and Statistics
The year 2022 will be noted as one of the

toughest years in Sri Lanka’s recorded Outlook and Prospects for the Sri Lankan Economy
history as the country battled with never-
before-seen levels of economic, social, and It is hoped that the IMF-EFF programme will provide an opportunity to embark on
political turmoil. The first half of the year much needed and long neglected structural adjustments in a more structured and
brought one crisis after another, from fuel timely manner, which will be instrumental in shaping the economy to progress on a
and energy shortages, civil unrest and trajectory of greater stability and sustained growth. Considering the progress that
political uncertainty to the unprecedented has been made thus far in relation to the IMF-EFF programme and debt restructuring
depletion in foreign currency liquidity negotiations, and the reforms that have already been undertaken and those that
leading to shortages of essential items and are to be implemented in the period ahead, the Sri Lankan economy is expected to
causing widespread disruption to economic transition onto the path to recovery from the latter part of 2023.
activity. In a bid to alleviate the pressure on

Moreover in April 2022, the Sri Lankan arrangement conditional on a long term Banking Sector Overview
government declared its intention to macroeconomic adjustment programme.
As was the case with almost all sectors of
suspend its foreign debt service A staff-level agreement for a proposed
the economy, the Banking sector too
commitments. The announcement had a EFF was reached in early September 2022.
faced a tough year in 2022. Muted
snowballing effect which triggered a
economic activity and weak investor
significant downgrade in Sri Lanka’s Nonetheless, with the economy still at a
confidence meant the Banking sector had
sovereign rating by all international rating critical juncture towards the end of the
to contend with limited opportunities for
agencies in April - May 2022. A culmination year, experts forecast that a contraction
credit expansion. Consequently, loans
of these factors saw the Sri Lankan economy of as much as 8.0% is likely for 2022, which
and advances grew by only 5.7% in 2022,
contracting by 4.8% during the first half of in effect would be the largest-ever
compared to 14.5% recorded during the
2022, compared to the growth of 9.3% in economic contraction in Sri Lanka on
previous year.
the corresponding period of 2021. record.
The Agriculture sector contracted by 7.6%

in the first six months of 2022, besieged by
shortages in agricultural inputs, particularly P Political
fertiliser and agrochemicals and the rising
cost of inputs coupled with fuel shortages. Key Factors Impact on Sri Impact on the
Faced with similar issues along with Lanka’s GDP Banking Sector
prolonged power outages, the industry
Political instability High High
sector registered de-growth of 7.1% for the
same period. The services sector Policy uncertainty High High
meanwhile, having shown strong resilience
against the headwinds, contracted
marginally by 0.6% in the six months ended
30th June 2022.
E Economic
Key Factors Impact on Sri Impact on the

Reflecting the setback in economic activities, Lanka’s GDP Banking Sector
labour productivity declined in the first half
of 2022 compared to the corresponding Prolonged economic slowdown, fuel
period of 2021. The issues in the external and energy shortages, hyperinflationary High High
sector worsened as import expenditure conditions
continued to outpace export income up Breakdown of economic fundamentals,
until the first quarter of 2022. Thereafter resulting in the foreign exchange High High
however, import expenditure declined liquidity crisis and LKR devaluation
notably, mainly due to the policy measures Decline in investor confidence due to
introduced to curtail imports amidst the High High
sovereign rating downgrade
foreign exchange liquidity shortage in the
banking system. And with export earnings
growing at an even pace throughout the
year, the overall trade deficit narrowed
S Social
significantly in the latter half of 2022.

Lanka’s GDP Banking Sector
Despite the odds being stacked against it,
the country was able to regain a measure of Social unrest High High
stability in the second half of 2022, thanks
to the multifaceted policy interventions Increase in poverty levels due to lower
High High
undertaken by the government to put the disposable incomes
economy back on track over time. In yet Food security issues and risk of
another positive, the government malnutrition due to the contraction in High High
commenced talks with the IMF to secure agriculture sector
financial assistance by way of an EFF

Outlook and Prospects for the Banking Sector

The Banking sector found itself in more Going forward, the capital position of the Banking sector will
distress due to poor foreign currency likely come under further pressure owing to deteriorating
liquidity and credit quality issues primarily credit quality arising from the prolonged economic downturn,
due to the foreign exchange crisis and higher inflation, lower disposable incomes, and declining
contractionary monetary policy measures revenues of SMEs. On this basis, it can be reasonably assumed
implemented by the government. that the profitability of the sector too will be compromised.
Data sources:
World Bank Publication, Global Economic Prospects, January 2023.
International Monetary Fund, World Economic Outlook Update, January 2023.
Recent Developments, Economic Highlights and Prospects for 2023 by CBSL.
Banking Sector Developments - December 2022 by CBSL.
T
PESTEL
Technological
Analysis 2022 Key Factors Impact on Sri Impact on the

Global trend towards QR-based Low High
payments
Promotion of cashless Moderate High
transactions by CBSL
E Environmental

Impact of climate change on
High Moderate
businesses
Green Finance Taxonomy Moderate High
ESG Advocacy Low Moderate
L Legal

Restrictions on imports High High
Tax reforms High High

78 ABOUT US HEAR FROM OUR LEADERS STRATEGY REPORT
Asset Base
The asset base of the Banking sector grew to Rs 19.4 Tn in
2022, a growth of 15.4% compared to an expansion of
15.1% recorded in the previous year. It should be noted that
asset growth was attributed primarily to the re-pricing of the
foreign currency denominated assets following the LKR
devaluation from March 2022.
Asset Quality
Asset quality of the Banking sector deteriorated in 2022.
Available data indicate that Stage 3 loans increased by 53.7%
to reach Rs 1.3 Tn as at end December 2022, from Rs 835 Bn
reported as at 31st December 2021. Accordingly, Stage 3
loans to total loans ratio rose to 11.3% by end December
2022 from 7.6% at end 2021.
Funding
The Banking sector continued to be funded largely by
deposits. Fuelled by high interest rates throughout much of
2022, the deposit base of the Banking sector registered
robust growth of Rs 2.4 Tn during the year to reach MANAGEMENT
Rs 15.3 Tn as at 31st December 2022, reflecting a growth of DISCUSSION AND
18.8% compared to 13.3% growth recorded in the previous
year. ANALYSIS
Despite ongoing stress, the Banking sector continued to
operate with acceptable levels of capital and impairment
coverage ratios. Liquid assets were also maintained above
the minimum regulatory requirement. The Statutory Liquid
Assets Ratio of DBUs was at 29.9% by 31st December 2022.
Despite adverse macroeconomic conditions, the Banking CAPITAL

sector as a whole maintained the Capital Adequacy Ratio
(CAR) above the minimum statutory requirements. As at end
MANAGEMENT
September 2022, the Banking sector operated with a Tier I REPORTS
CAR of 12.4% and a Total Capital Ratio of 15.2%, which were
both well above the Basel III requirements.
Profitability
Pressure from adverse macroeconomic conditions in 2022
were reflected in the profitability of the Banking sector.
Profit before all taxes of the Banking sector for the year
ended 31st December 2022 was Rs 252.6 Bn, representing
a decline of Rs 25.7 Bn compared to the profits of
Rs 278.3 Bn reported during the previous year. The increase
in impairment charges by Rs 298.5 Bn was the main reason
for the profit erosion in the Banking sector.

FINANCIAL CAPITAL
Value Creation Scorecard

Strategic Objectives
Competitive Positioning Operational Excellence Cost Management Business Resilience
Financial Capital Overview

The goals set by the Bank at the commencement of 2021 were based on the circumstances that existed at that time. However, given the
economic crisis that unfolded thereafter, the Bank was compelled to reorient its goals to adapt to the environment. As a result, a few
previously set targets were realigned in order to ensure the Bank stays responsive and agile in the face of changing market conditions.
Term Goals Set in 2021 Progress in 2022 - Key Initiatives Way Forward
Strategically diversify the lending Net Interest Margin (NIM) of the Bank increased to Ì Strategically
approach to boost interest income. 5.66%, 205 bps higher than the NIM registered in the diversify the
previous year. lending approach
to boost interest
Aggressive drive to grow the savings The unprecedented interest rate hikes during the year income and
portfolio. had a significant impact on the Bank’s CASA balances. strengthen the
Although the Bank witnessed a drop in CASA balances asset base.
Medium as a result of the rising interest rates, cost of funds was
Term managed effectively. Ì Ongoing cost
saving initiatives
Implement Bank-wide cost saving Sampath Bank has made some notable strides in mainly digitisation
initiatives on an ongoing basis. implementing process automation across all levels of of Bank’s
the business. While significantly improving workflow processes aimed
efficiencies and boosting employee productivity, at lowering
these efforts have also proven to be highly effective operating
lowering costs over the years. expenses.
Minimise the maturity mismatch between The ongoing economic uncertainty has caused Ì Closely review the
assets and liabilities. maturity mismatches between asset and liability provisioning
portfolios. However, Sampath Bank’s prudent requirements
strategies have helped to mitigate these impacts more frequently,
Long successfully. to make necessary
Term adjustments to
Leverage on digital technology including Reduction in paper usage attributed to digitisation
safeguard quality
RPA (Robotic Process Automation) and and process automation.
of the advance
machine learning tools to derive
portfolio.
sustainable cost savings over time.
Business Outcomes
5.66% Rs 19 Bn 11.84%
205 bps 2022 69.4% 2022 563 bps 2022
3.61% 2021 Rs 11 Bn 2021 6.21% 2021
NIM Net Fee and Commission Provision Cover Ratio
Income

FINANCIAL CAPITAL
Complementing Other Capitals
Manufactured Capital Intellectual Capital Social and Relationship Human Capital

Capital
Strategic allocation of Consistent improvement in Strong financial results will Better financial results allow
financial resources to financial performance over enable the Bank to the Bank to increase wealth
develop delivery channels in time, serves to enhance the consistently allocate created for employees by
line with the Bank’s Bank’s credibility and resources to meet the way of above average
expansion strategy will help reputation in the industry. needs of all key salaries and benefits, thereby
strengthen market reach. stakeholders. increasing motivation and
employee satisfaction, and
lowering employee turnover.
Analysis of the Statement of Profit owing to the Bank’s decision to prudently However, interest expenses too saw an
or Loss manage the lending activities in light of increase as banks were compelled to
Gross Income severe macroeconomic stress, the adverse increase interest rates on deposits in line
impact of this approach was offset by the with Treasury bill rates during the latter
Buttressed by strong improvements in all
continuous upward movement in market part of 2022. As a result, Sampath Bank’s
three key income sources - Net Interest
interest rates. With the AWPLR increasing LKR term deposit base increased by Rs
Income (NII), Net Fee and Commission
rapidly throughout the year, the Bank 158 Bn while the Bank’s LKR CASA base
Income (NFCI) as well as Other Operating
benefitted from frequent repricing of the reduced by Rs 111 Bn during the year.
Income, Sampath Bank’s Gross Income
loans and advances portfolio during 2022. Proactive and timely asset and liability
almost doubled to reach Rs 198 Bn for
Similarly, interest income from Treasury management ensured that the escalation
2022 from Rs 105 Bn reported in 2021.
Bills and Bonds increased due to the was well managed.
unprecedented rate hikes in 2022 while
Net Interest Income (NII)
interest income on FCY loans increased Furthermore, with interest income
NII increased substantially in the year substantially owing to LKR depreciation. As outpacing the interest expense, NIM for
under review from Rs 41.7 Bn in 2021 to a result, interest income for the year 2022 the reporting period reached 5.66%,
Rs 73.5 Bn in FY 2022, reflecting a solid reached Rs 158 Bn, denoting an increase 205 bps higher than the NIM registered at
76.4% growth. While interest income of 83.3% over the previous year. the end of 2021.
attributed to loans and advances declined
Net Fee and Commission Income (NFCI)
AWPLR & Bank’s NII With Card and Trade related activities
Rs Bn % generating robust results compared to the
previous year, total NFCI of the Bank grew
25 30 by 69.4% from Rs 11.5 Bn reported in
26.0 27.2
2021 to Rs 19.4 Bn in the year under
20 25
review.
21.9
20.2
22.3
15 20
17.9
A combination of volume growth and a

13.5
10 15
12.0
substantial tariff increase enabled trade

10.4
10.1
9.2
5 8.6 9.7 10 related services to establish itself as a

6.5
5.8 5.8 strong contender, contributing 42%
0 5
towards overall NFCI for the current
Q1 21
Q2 21
Q3 21
Q4 21
Q1 22
Q2 22
Q3 22
Q4 22
financial year and recording a growth of

159% over previous financial year.
Net Interest Income (NII) AWPLR - Weekly (RHS)

Meanwhile, SampathCards too posted a recorded in the last year. The Bank impairment provision of Rs 0.6 Bn has
significant growth of 67% over the previous reported Rs 18.5 Bn exchange gains under been recognised against credit related
financial year and accounted for 30% of other operating income in 2022 commitments and contingencies.
the total NFCI mix. (2021: Rs 4.2 Bn) and Rs 2.2 Bn unrealised
exchange loss under Net Trading Income Impairment on Loans and Advances
Net Trading and Other Operating for 2022 (2021: Gain of Rs 636 Mn). Customers‘ arrears position escalated
Income during the year due to the unprecedented
The net other operating income for the Impairment Charge erosion of disposable income,
year was Rs 19.7 Bn, an increase of 311% The Bank recorded Rs 62.7 Bn as total deteriorating business prospects amidst
year-on-year which was driven by the impairment charge for the year under the breakdown of economic fundamentals,
Rs 164.75 drop in value of the LKR against review, of which Rs 54.3 Bn relates to the fuel and energy crisis, social unrest
USD. Total net foreign exchange income provisioning on account of loans and and political instability. Having considered
reported for the period increased to advances, while Rs 7.8 Bn is attributed to these adverse movements, the Bank with
Rs 16.3 Bn in 2022, up from the Rs 4.8 Bn investments in financial instruments its conservative policy increased the
including SLDBs and SLISBs. A further impairment provisions booked against
loans and advances in the current financial
Composition of NFCI year.
%
3 3 4 6
Impairment on Individually Significant
Loan (ISL) Customers: The Bank has
8
evaluated substantial portion of its
30
45 13 customers under the ISL category giving
11 due consideration to their financial
2022 2021 strength as well as the external macro-
economic pressures. The adequacy of
17 impairment provisions in respect of ISL
30
customers in the tourism and other
30
similarly affected industries were also
further reviewed and where necessary
adequate impairment provisions were
recognised. Accordingly, the Bank charged
Trade & Remittances Loans & Advances
Credit & Debit Cards Deposits Rs 32.7 Bn as impairment provision against
Other Banking & Financial Services Guarantees ISL customers in 2022, an increase of
Rs 27.6 Bn compared to 2021.
T-Bill Rate & Bank's FD Rate Collective Impairment: The Probability of

% Default (PD) rates applicable on the
40 portfolio increased, reflecting financial
stress experienced by customers. The
29.53 29.85 29.46 stagnant economy and restrictions
30
24.30 30.50 29.60 29.27 imposed by regulators on foreclosures
24.09
created difficulties for the Bank in
23.84 20.00 20.00
20 recovering defaulted facilities. As such,
17.00
LGD rates also increased over the course
12.28 13.00 17.00 17.00 17.00
8.24 8.55 8.53
15.00 of the year.
10 13.00
7.50 Further, the Bank reviewed the probability

5.75 5.75 5.75
0 weightage for the worst-case economic
scenarios and increased it further during
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Sep-22
Oct-22
Nov-22
Dec-22
the reporting period. In addition, the Bank

continuously refined the economic factor
12-month T-Bill Rate
12-month FD Rate

FINANCIAL CAPITAL
adjustment methodology to reflect the of Rs 7.8 Bn was made against the

heightened economic vulnerabilities and
captured the latest available data for
total foreign currency denominated
Government Securities and the cumulative
Rs 48.2 Bn
2022
economic variables. This enabled the Bank impairment provision as at 31st December
to book adequate impairment provisions 2022 stood at Rs 18.3 Bn. Meanwhile, the
Rs 41.4 Bn 2021
16.5% Net Operating Income
to address the potential credit risk Bank was able to significantly reduce
associated with the current economic provisions made against SLDBs by
Rs 16.3 Bn
challenges. The Bank also continued to exercising the option to convert maturing
recognise impairment provision against SLDBs into LKR denominated bonds/bills.
the customers who exited the moratorium In this regard, Sampath Bank accepted 2022
at the end of December 2021 and June LKR bonds, bills etc. in place of Rs 4.8 Bn 2021
2022 as some customers have requested USD 162 Mn worth SLDBs that matured Total Foreign
further concessions given the current during 2022. The Bank expects to once 240% Exchange Income
economic outlook. again exercise the conversion option when
Industries considered under elevated risk

a further USD 104 Mn worth of the SLDB
portfolio matures in 2023.
40.08%
were further expanded to capture a
2022
broader range of industry-specific stress Net Operating Income 39.04% 2021
factors. The potential impact of rising Although improvements in Gross Income 104 bps Dividend Payout Ratio
inflation, higher interest charges and was mostly neutralised by the increase in
increase in taxes on the retail segment impairment charge, the Bank’s Net
were some of the other factors that were Operating Income witnessed satisfactory of Rs 2.7 Bn, which was paid in 2022. The
considered in recognising impairment growth compared to the previous financial Surcharge Tax was calculated at 25% of
provisions. year. Net Operating Income improved by the taxable income for the year of
16.5% from Rs 41.4 Bn in 2021 to assessment 2020/2021 and it was directly
Taking into account the increased credit Rs 48.2 Bn in 2022. set-off against opening equity in line with
risk, the Bank reclassified a substantial the Statement of Alternative Treatment
number of customers under Stage 2 on Operating Expenses (SoAT) on accounting for surcharge tax
prudential basis, in addition to the days issued by CA Sri Lanka.
Operating expenses increased by 35.7%
past due classification during the year
year-on-year, amidst higher personnel
under review. Accordingly, 33.2% of the The Value Added Tax on Financial Services
costs and a culmination of widespread
total advances portfolio as at 31st charge increased by Rs 1 Bn in FY 2022
price increases that drove up other
December 2022 is classified under Stage 2 compared to Rs 3.9 Bn charged in 2021.
operating expenses. Compared to the
(2021: 31.1%). This was due to the applicable rate
previous financial year, personnel costs
grew by 30.9% in 2022 mainly owing to increasing from 15% to 18% with effect
A combination of these measures saw from 1st January 2022. Furthermore, an
salary increases. Other operating
impairment charge on loans and advances additional tax charge of Rs 222 Mn in FY
expenses also increased by nearly 50%,
increasing to Rs 54.3 Bn in FY 2022, up by 2022 was attributed to the 2.5% Social
due to a combination of inflationary
328% from Rs 12.7 Bn in 2021. Security Contribution Levy on value
conditions and the high cost of imports
precipitated by the devaluation of the LKR addition, introduced with effect from
Impairment on Financial Instruments 1st October 2022.
against the US Dollar.
Following the announcement made by the
Government in April 2022 stating the Taxation The Bank has captured the income tax
Government’s intention to restructure its rate increase to 30% from 24% for the
Total tax expense of the Bank for FY 2022
external public debt and the subsequent latter six months of the year of assessment
was Rs 7.1 Bn, which is comprised of
downgrade of Sri Lanka’s sovereign rating 2022/23. The change in claimable loan
Income Tax (Rs 1.9 Bn) Value Added Tax on
by global rating agencies, the Bank moved loss provision method too was adjusted
Financial Services (Rs 5 Bn) and Social
to make substantial provisions in with transition impact. The deferred tax
Security Contribution Levy (Rs 0.2 Bn).
anticipation of possible haircuts on foreign assets/liabilities were recognised at the
currency denominated Government Not included in the above tax expense is revised rate of 30%.
Security instruments. For the year ended the newly imposed one-off Surcharge Tax
31st December 2022, impairment charge

Profit before Tax (PBT) and Bank's Performance 2022

Profit after Tax (PAT) Rs Bn
Sampath Bank posted PBT of Rs 15 Bn for 18.0 62.7
120
the year under review. Although this is
slightly lower than the Rs 16.8 Bn tabled in 19.4
90
the previous year, it is nevertheless a 73.5
commendable achievement that comes
amidst the significant increase in 60
28.0
impairment charges and overhead
expenses. Meanwhile, the Bank posted a 30
7.1
13.1
PAT of Rs 13.1 Bn for FY 2022, denoting
marginal growth of 5.4% over the previous 0
year.
Taxes on FS &
Other Income
Profit for the

Commission
Net Interest
Impairment
Income Tax
Operating
Net Fee &
Expenses
Other Comprehensive Income (OCI)
Income
Income
Charge
Year
The changes in OCI were attributed to
three key factors. Firstly, the Bank made
use of the one-time opportunity offered by
CA Sri Lanka to revalue its Government
Securities portfolio and reclassified it Cash and Cash Equivalents Liabilities
under amortised cost portfolio as at
Cash and Cash Equivalents increased to Deposits
1st April 2022, resulting in the reversal of
Rs 79 Bn mainly due to accumulation of On an overall basis, the total deposit base
mark-to-market losses of Rs 4.8 Bn.
Nostro balances, triggered by the lack of of the Bank crossed the Rs 1 Tn mark
investment opportunities in USD. during 2022. From the Rs 978 Bn recorded
Secondly, the Bank booked Rs 1.1 Bn
worth of actuarial gains against retirement at the end of the previous year, the deposit
Loan Growth base reached Rs 1.1 Tn at 31st December
benefit plans due to higher discount rates
arising from the upward shift in market The Bank’s gross loans and advances 2022, reflecting a growth of 12.76%. It
interest rates. increased to Rs 920 Bn at the end of should be noted however that much of
31st December 2022 from Rs 813 Bn as at this growth is attributed to the revaluation
And finally, the entire portfolio of Bank- end of December 2021. The LKR portfolio gain on the foreign currency denominated
owned freehold land and buildings was grew by Rs 35 Bn, reflecting an increase of deposits. Meanwhile, steps taken by the
revalued during the year resulting in a gain 4.9% compared to the portfolio balance of Bank’s Asset Liability Management
of Rs 978 Mn for reporting year. Rs 717 Bn at the previous year-end. The Committee to consciously manage the
FCY loan portfolio of the Bank expanded by high-cost term deposits portfolio
Analysis of the Statement of Financial Rs 71.6 Bn due to the LKR devaluation in contained the growth of LKR denominated
Position March 2022. However, if the LKR deposits to 4%.
devaluation is disregarded, the core loans
Asset Base
and advances portfolio shows only a Equity
Total assets of the Bank grew by 10.4% marginal growth of 3.2%. This low growth is
during the year under review to reach Total equity of the Bank increased by
consistent with the Bank’s conscious Rs 7.6 Bn during the year to reach
Rs 1.3 Tn on 31st December 2022, from decision to manage lending and engage in
the Rs 1.2 Tn registered at the previous Rs 126 Bn at the end of 2022. Profit after
more focused credit expansion activities. tax recorded for the year 2022, gains
year end. The increase in cash and cash
equivalents as well as net loans and arising from changes in actuarial valuation
Investments assumptions on retirement benefit plans
advances contributed to the
Overall, debt and other instruments and revaluations gains on freehold lands
aforementioned growth. One of the
decreased marginally compared to 2021, and buildings, together contributed
primary causes of the balance sheet
with material movement between FCY and towards the growth in total equity.
expansion is the LKR devaluation during
LKR instruments. This was primarily due to However, the one-off surcharge tax
the year.
the Bank’s decision to accept the offer to payment and dividend payment against
receive treasury bonds/bills in exchange 2021 negatively impacted the total equity.
for maturing SLDBs. Thereby, investment
in SLDB dropped by 33% during the year.

FINANCIAL CAPITAL

The Bank remained well capitalised in
11.92%
2022, with no requirement for capital
infusion during the year. All key capital
Having considered 2022
these adverse
Regulatory
ratios were consistently above the 8.5% Minimum
342 bps Tier I CAR
movements, the Bank
minimum regulatory requirements. As at
31st December 2022, the Tier I Capital
Ratio was at 11.92%, while the Total Capital with its conservative
Ratio was at 14.27%, both comfortably
above the regulatory minimum of 8.5% policy increased the 14.27%
2022
and 12.5% respectively. The Bank’s
leverage ratio as at the end of December
impairment provisions 12.5%
Regulatory
booked against loans

Minimum
2022 stood at 7%, well above the 177 bps Total CAR
regulatory minimum of 3%.
and advances in the
The Bank’s Statutory Liquid Asset Ratio current financial year. Summary of Group Performance
stood at 27.85% at the end of reporting Despite the adverse economic conditions,
year, ahead of the regulatory minimum all subsidiaries within the Sampath Group
requirement of 20%. Similarly, the Liquidity Dividend reported acceptable profits for 2022.
Coverage Ratio and the Net Stable Funding The Board of Directors has recommended A brief overview of the performance of
Ratio at 146.5% and 157.1% respectively a final dividend of Rs 4.60 per share subsidiaries is given on pages 164 and 165
were both well above the minimum (Rs 3.45 per share in cash and Rs 1.15 per of the Annual Report.
regulatory requirements. share in scrip) for the financial year ended
31st December 2022 subject to the At a Group level, consolidated profit before
Debenture Issue approval of the shareholders at the Annual tax for the year under review was
General Meeting to be held on 30th March Rs 16.4 Bn and profit after tax of
The Bank made an offer to issue 50 Mn
2023. The Bank will inform the Director - Rs 14.1 Bn, compared to Rs 18.8 Bn and
Basel III compliant - Tier II, listed, rated,
Bank Supervision of Central Bank of Sri Rs 13.9 Bn respectively for FY 2021.
unsecured, subordinated redeemable 5
year debentures (2023/28) with a non- Lanka, the Board approved detailed
viability conversion, of a par value Rs 100/- assessment carried out in deciding the
each to raise a sum of up to Rs 5 Bn with payment of cash dividends for the year
2022. The Dividend payout ratio for the Way Forward
the option to issue up to a further 20 Mn
of said debentures to increase the said year ended 31st December 2022 stood at Strategically diversify the lending
sum by up to a further Rs 2 Bn at the 40.08% (2021: 39.04%). approach to boost interest income
discretion of the Bank in the event of an and strengthen the asset base.
over-subscription of the initial issue and External Rating
with a further option to issue up to a Fitch Ratings Lanka Limited has revised Minimise the maturity mismatches
further 30 Mn of said debentures to their ratings of 10 Sri Lankan banks between assets and liabilities to
increase the said sum by up to a further including Sampath Bank on optimise liquidity and control cost
Rs 3 Bn, at the discretion of the Bank in the 12th January 2023 following the recent of funds.
event of an over-subscription of the initial sovereign downgrade and recalibration of
issue and the second tranche. the Agency’s Sri Lankan national rating Ongoing cost saving initiatives
scale. mainly digitisation of Bank’s
The above debenture issue was processes aimed at lowering
successfully oversubscribed on the very Accordingly, Sampath Bank’s National operating expenses.
first day, demonstrating investor Long Term rating has been revised down
confidence in Sampath Bank PLC and the to ‘A(lka)/RWN’ from ‘AA-(lka)/RWN’. Closely review the provisioning
Bank thereby exercised both options and Further, Fitch has assigned ‘BBB+(lka)/ requirements more frequently, to
raised Rs 10 Bn worth of Basel III compliant RWN’ rating for Bank’s Basel III compliant make necessary adjustments to
– Tier II funds on 9th February 2023. subordinated debentures. safeguard quality of the advance
portfolio.

MANUFACTURED CAPITAL

Cost Management Operational Excellence Customer Experience
Manufactured Capital Overview
Area Term Goals Set in 2021 Progress in 2022 - Key Way Forward
Initiatives
Medium Drive the adoption of the digital Implemented 14 digital banking Complete the digital branch
Term branch concept among centres under the digital branch roll out across the entire
Branch
customers. strategy - phase II. branch network by end 2023,
Network
while working simultaneously
Long Leverage technology to simplify Centralising back office functions
to convert all 229 branches
Term operating models in order to to transform branches into
into 100% frontline
minimise the requirement of 100% frontline operation
operations by end 2023.
brick-and-mortar branch focused on driving core business
model. activities.
Medium Systematically upgrade ATM/ 13 ATMs were replaced with Conclude the CRM
ATM/CRM Term CRM infrastructure on par with CRMs. replacement programme by
Network global standards. mid 2024 and pursue
opportunities to offer more
Long Improve the functionality of the Green PIN enablement initiative
value added services through
Term ATM/CRM with a focus to divert - a safe and secure mechanism to
the Sampath ATM network.
all customers towards digital allow customers to change their
channels for every routine debit card PIN using any Sampath
banking activity. Bank ATM.
Medium Triple the islandwide MyBank Appointed 1,338 sub-agents Increase the existing
Term agent footprint by end 2022 by authorised to offer the sub-agent network during the
appointing new agents in yet “eZ Banking service”. year 2023, activate phase II of
untapped regions of the the “eZ Banking service” to
Agent
country and also by increasing empower sub-agents to offer
Banking
the concentration in existing a wider range of basic banking
Channel
areas with visibly high growth services to their customers.
potential.
Long Replace the existing POS Partnered with Dialog Axiata PLC
Term terminal with new App based to introduce the “eZ Banking
solution thus creating a robust service”, which presents a low
ecosystem to enhance the cost operating model to enable
value proposition delivered the provision of basic banking
through MyBank agents, while services to unbanked and
also significantly lowering the underbanked communities
cost-to-serve ratio. around Sri Lanka.

Manufactured Capital Overview Contd.
Area Term Goals Set in 2021 Progress in 2022 - Key Way Forward
Initiatives
Medium Dynamically improve the digital Launch of the Sampath iPIN Reinforce Sampath Bank’s
Term onboarding process to ensure - self onboarding facility to competitive position in the
more efficient and convenient enable customers to register for digital banking space vis-a-vis
customer acquisition, leading to the Sampath Vishwa online innovations that enhance the
improved customer satisfaction. banking platform using their customers’ digital experience.
debit card PIN. Expedite digitalisation and
Digital process automation initiatives
Long Systematically increase Sampath Vishwa Mobile App
Channels with a view to improving
Term customer migration towards version upgrade to allow
employee productivity and
digital channels by creating a customers to benefit from the
reducing cost-to-serve.
digital payment ecosystem that omni channel experience.
significantly enhances the Expand the range of low cost,
customers’ overall digital value added digital channels in
experience. order to promote greater
financial inclusion across Sri
Lanka in order to support the
national digital drive as outlined
by the CBSL’s digital roadmap.
Medium Expand the current API API integration enablement to Establish open API platform for
IT (Application Programming support the eZ Banking agent the Bank, which will facilitate
Term
Infrastructure Interface) banking platform to channel roll out. business expansion planned
enhance the business. through Open Banking.
Leverage on cloud platforms to Migration of the HRIS and the Accelerate the Bank’s cloud
Long
migration journey to enable all
Term better serve stakeholder needs. "Vidvan" learning management
non-core activities to be hosted
platform to the cloud.
on the cloud in due course.
Business Outcomes
Volume of Digital On-boarding
through Video Consoles ATM, CDM & CRM Transaction Volume Sampath Vishwa & WePay Registrations
No. Tran. Mn No. 000
8,000 100 150
80 120
6,000
60 90
4,000
40 60
2,000
20 30
11.7
Q1 22 4,419
Q2 22 4,197
Q3 22 6,559
Q4 22 5,864
120.0
106.0
123.5
117.8
126.3
136.0
2019 75.0
2020 69.3
2021 82.4
2022 89.7
17.5
0 0 0
2022
2019
2020
2021
Vishwa
WePay

Business Outcomes
Investment in Property,
Green PINs Issued Plant & Equipment Investment in Intangible Assets
No. Rs Mn Rs Mn
1,000 400
800
300
600
60,558 200
400
100
32,971 200
2019 864
2020 478
2021 466
2022 887
2019 248
2020 199
2021 182
2022 310
0 0
Q3 22*
Q4 22
* Green PIN process introduced

from August 2022.
CAPEX Mix
%
4 3 3 3
3
16 28 28
2022 2021
49
23
26 14
Improvements to Lease Hold Properties Computer Equipment

Software Freehold Land & Buildings
Office Equipment Fixtures & Fittings
Financial Capital Intellectual Capital Social and Relationship Natural Capital

Capital
Multiple banking channels Reliability and high resilience Wider choice of channels Greater focus on digital
increase the number of of core systems ensure helps to gain the trust of banking solutions will result
income generating sources business continuity, in turn among diverse customer in lowering the use of paper
to boost the Bank’s income having a positive impact on segments. and thereby lessen the
and profits. the Bank’s reputation and Bank’s environmental impact.
enhance brand equity.

Contribution to Sustainable Development Goals
Target 8.2: Diversify, innovate and upgrade for economic Target 9.3: Increase access to financial services and markets
productivity Target 9.4: Upgrade all industries and infrastructures for
Target 8.10: Universal access to banking, insurance and financial sustainability
services
focused on driving core business activities, Another important branch initiative

Branch Network
was implemented for over 100 branches. undertaken by Sampath Bank - the digital
Under the programme, all back-office branch strategy launched in early 2021,
Sampath Bank’s network of 229 fully- functions typically handled by these moved into its second phase in 2022 with
fledged branches spanning all 25 districts branches, were centralised and brought the Bank investing in necessary hardware,
have long been the mainstay of the Bank’s under control of relevant authorities at software and equipment to set up more
operations. Over the years, the branch Head Office. As a first step, all internal digital banking centres. In addition to the
network as a whole has been subject to documentation and record keeping ATMs, CDMs (Cash Deposit Machine), and
several evolutionary cycles, which is processes were fully digitised enabling Cheque Deposit Kiosks, the newest feature
demonstrative of the Bank’s commitment day-end reconciliations etc. to be at these digital banking centres is the
to early adoption of the latest local and centralised under the purview of the video agent console to facilitate self on-
global banking practices. Bank’s Network Services Centre and boarding of customers.
routine balance confirmation requests
Geographical Distribution of the and handling other customer requests, Meanwhile, in keeping with the Bank’s
Branch Network etc. to be directed to the newly set up customer accessibility goals, the
% Central Branch Operations Unit (CBOU). Moratumulla and Karapitiya branches
4 4 were relocated to enhance customer
These initiatives also tie in with the Bank’s accessibility and reach.
6
principal efforts to drive operational
6 efficiency and manage branch overheads,
which over the years had led to the
7
44 centralisation of specialised activities such Way Forward
as credit evaluation and disbursement. In Improving the customers’ digital
9 this regard, the Central Credit Processing experience via the branch network
Unit (CCPU) was established in 2016 to will remain the key priority going
verify customer credit worthiness while forward. Focusing on increasing
10 10 the Loan Disbursement Unit (LDU) was set digital adoption among customers
up in 2019 to create a standardised loan from all around Sri Lanka, the Bank
Western Sabaragamuwa disbursement protocol. As a follow up to will target to complete the
Southern Northern these efforts, the Central Credit implementation of its digital branch
Central North Central
Documentation Unit (CCDU) was formed strategy across the branch network
North Western Uva
Eastern in 2022. The main function of the CCDU is by end 2023. The branch conversion
to provide assurance that customers’ strategy will also be expedited with
security documentation is in order prior to all 229 branches set to be converted
The year 2022 marked the latest phase in the actual disbursement. Centralisation of into 100% frontline operations by
this evolutionary journey, which saw the these functions have helped greatly in end 2023.
functional role of the branches being streamlining the work of branch teams to
revamped. The first phase of this enable them to be redeployed towards
transformation process to convert the more value adding tasks, including driving
branches into 100% frontline operation core business activities.

ATM/CRM Network ATMs, the Bank has further mandated that Bank’s ATM network ahead of peers. The
all new machines installed should also be Green PIN enablement introduced in 2022
CRMs. is the latest addition to the value added
The Bank’s ATM network serves as a key service portfolio offered through the
driver in Sampath Bank’s overall value Sampath ATM network. The Green PIN is
ATM & CRM Composition
proposition. Given that it remains one of designed as a safe and secure mechanism
% to allow customers to change their debit
the most heavily patronised customer
touch-point, the Bank maintains a very card PIN using any Sampath Bank ATM - a
clear expansionary policy to grow its ATM process that has proven to be a very
21 efficient and entirely more cost effective
network in order to reach out to more and
solution for the Bank as it eliminates the
more Sri Lankans around the country.
need for the customary printed PIN
Sampath Bank’s ATM currently comprises
notifications.
275 on-site and another 88 off-site ATMs.
On-site & Off-site ATMs

% Way Forward
79
While targeting to complete the
CRM replacement programme by
24 mid-2024, the Bank will actively
ATM pursue opportunities to increase
CRM
the suite of value added services
made available to customers
In the year under review, the Bank also through the Sampath ATM network.
began working on implementing a new
cash draining mechanism, which would
76 streamline the disbursement of notes
Agent Banking
through ATMs and thereby prevent
machine downtime triggered by the non-
On-site
availability of certain denominations. The Agent Banking Channel was a bold new
Off-site concept introduced to the local banking
Value added services such as the sector by Sampath Bank in 2021 as a
Cardless Cash, Mobile Cash, Balance proactive response to the national
Equally importantly, ongoing investments Inquiry, Touchless Cash Withdrawals etc. endeavour to promote greater financial
in the latest technology are aimed at are some of the key stand out features
inclusion among unbanked and
ensuring the ATM network is continuously introduced in the past that have been
underbanked populations across Sri Lanka.
upgraded to correlate with customer responsible for positioning Sampath
needs. Towards this end, Sampath Bank
has rolled out many upgrades in the past,
but the most notable in recent times is the
initiative to replace traditional ATMs with
more versatile CRMs (Cash Recycler
Machines). Since traditional ATMs are
restricted in their ability to accommodate
only cash withdrawals, steps were taken to
introduce the more versatile CRM that is
equipped to handle both cash withdrawals
as well as cash deposits. The CRM initiative,
which has been ongoing since 2017 made
progress by 2022, with new CRMs installed
in place of existing ATMs. As part of the
ongoing effort to phase out traditional
Transactions through eZ Banking Agents

GRI 2-6
Based on the findings of the initial rollout,

Jaffna District
a strategic decision was made in 2022 to 229
revamp the operational modalities of the Branches
Agent Banking Channel with a view to Kilinochchi District
scaling up the operations. Towards this 363

ATMs
end, Sampath Bank tied up with Dialog
Axiata PLC (DAP) to launch the “eZ Banking Mullaitivu District
service”. As per this new model, the Bank 360

has the authority to appoint selected sub- Mannar CDMs
District
agents from among DAP’s eZ Cash Vavuniya
District
merchant network, subject to the approval 98

of the CBSL. Sub-agents appointed in this CRMs
manner are allowed to offer basic banking Trincomalee
District
services (accepting cash deposits to
1,338
Anuradhapura
District
savings and current accounts and eZ Banking Agents
facilitating cash withdrawals from savings Polonnaruwa
District
accounts) to Sampath Bank customers. A Puttalam
District
formal operational protocol encapsulating Batticaloa District

19
the administrative controls including a Digital Banking Centres
predetermined limit framework and Kurunegala District
Matale
District
reporting requirements relating to the “eZ
Banking service” was also issued in order
Kandy District
to ensure effective control is maintained at Ampara
all times. District
Kegalle
Gampaha
District
District Nuwara Eliya
With necessary regulatory approvals

District
obtained from the Monetary Board, the Colombo District

Badulla
District
first batch of 1,338 sub-agents were

Kalutara Monaragala
appointed during year 2022. District Ratnapura
District
District
Geographical Distribution of
eZ Banking Agents Galle District
Hambantota
District
%
4 2 Matara
District
2
4
5 Scan this QR code for
more details on Bank's
8 Physical Customer
41 Touch Points
10
Way Forward
24 The Bank will work on the premise that growing the network of eZ cash sub-agents
will be critical to the future success of the “eZ Banking service”. Accordingly, the
Western Eastern medium term goal would be to increase the existing sub-agent network during the
Southern Sabaragamuwa year 2023. Over the longer term, it is hoped that phase II of the “eZ Banking service”
North Western Uva can also be activated in order to empower sub-agents to offer a wider range of basic
Central Northern
banking services to their customers.
North Central

Geographical Distribution of Physical Customer Touch Points
Province District Branches Automated Cash Cash eZ Digital Total

Teller Deposit Recycling Banking Banking
Machines Machines Machines Agents Centres
(ATMs) (CDMs ) (CRMs )
Northern Mullaitivu 1 1 2 - 1 - 5
Vavuniya 2 1 2 2 1 - 8
Mannar 1 - 1 1 3 - 6
Kilinochchi 1 1 1 - 2 - 5
Jaffna 8 8 9 3 16 - 44
Central Nuwara Eliya 4 6 8 1 25 - 44
Matale 3 6 6 1 7 - 23
Kandy 15 20 25 4 75 1 140
North Central Polonnaruwa 3 3 5 - 5 - 16
Anuradhapura 6 5 11 4 61 - 87
North Western Puttalam 8 8 10 4 15 - 45
Kurunegala 13 17 22 6 123 - 181
Eastern Ampara 7 8 13 1 24 - 53
Batticaloa 6 6 7 4 20 - 43
Trincomalee 4 3 4 - 12 - 23
Uva Badulla 5 6 8 - 16 - 35
Monaragala 4 5 6 - 9 - 24
Sabaragamuwa Ratnapura 8 11 12 - 28 - 59
Kegalle 6 7 7 3 24 - 47
Western Colombo 63 147 117 46 208 12 593
Gampaha 27 50 40 8 246 5 376
Kalutara 10 15 13 3 96 1 138
Southern Hambantota 6 5 5 1 16 - 33
Galle 10 10 11 5 205 - 241
Matara 8 14 15 1 100 - 138
Total 229 363 360 98 1,338 19 2,407
Province-wise Physical Customer

Touch Points
%
3 2
4
5
5
46
9
17
Relocation of Moratumulla Branch

Western Sabaragamuwa
Southern North Central
Central Northern
North Western Uva
Eastern

IT Infrastructure Data analytics was also used extensively to design customised, value added digital banking
solutions for specific customer needs, resulting in higher customer retention and
improved new customer acquisition.
In the current fast-paced digital banking
landscape, the Bank’s IT infrastructure The cloud migration programme that was initiated in 2021 with the aim of moving all non-
remains the backbone of its operations. core internal processes to the cloud-based environment, also made good headway in
Underpinned by a long range IT roadmap, 2022 with the latest updated versions of the HRIS and the “Vidvan” learning management
the Bank has over the years mobilised more platform, both introduced to the cloud environment during the year.
and more resources to build robust and
resilient IT infrastructure that is at the same Investment in IT Infrastructure
time fully updated on par with the latest
Investment (Rs Mn) YoY Change
global standards.
2022 2021
Existing IT systems were significantly Computer Hardware 189 321 (41%)

enhanced in 2022 in line with the ongoing Computer Software 310 182 71%
expansion of the Bank’s channel Total 499 503 (1%)
architecture. One of the major
developments was the API integration for
the eZ banking agent channel roll out. Other
notable initiatives included the system Way Forward
augmentation to facilitate digital The Bank will look into the possibility of expanding the use of predictive models to
on-boarding through video conferencing analyse different business scenarios by adding external environmental factors. In
consoles at all newly established digital parallel, the Bank expects to accelerate its cloud migration journey with the aim of
branches and the introduction of the green hosting all non-core activities on the cloud in due course.
PIN. The green PIN is a digitalised ATM pin
delivery mechanism that has replaced the Digital Channels
traditional printed PIN slip for ATM cards.
Since becoming one of the very first local banks to enter the digital banking space in Sri
Meanwhile, the focus on automation was
Lanka as far back as the 1980’s, Sampath Bank has time and again proven itself to be
also intensified with the Sampath Enterprise
among the top digital banks in the country. The Bank has adopted a holistic approach to
Business Management System upgraded to
strengthen its digital channel architecture based on its broader objectives to enhance
enable end-to-end automation of key work
customer convenience, drive customer digital adoption and also to promote greater
streams under the “FINDAS” (Finance
financial inclusion across Sri Lanka.
Document Approval System - the Finance
workflow automation module) and “TTDAS”
As part of the ongoing channel improvement strategy, several new initiatives were
(Telegraphic Transfer Document Approval
undertaken in 2022, most notably, the Sampath iPIN self-onboarding facility which enables
System - the International Operations
customers to register for the Sampath Vishwa online banking platform using their debit
module). Automation initiatives were further
card PIN. Another important development was the Sampath Vishwa Mobile App version
expedited with the use of RPA (Robotic
upgrade in mid-2022. This latest version upgrade which supports stronger real-time
Process Automation), where manual
integration between the Sampath Vishwa mobile app and online banking platforms is
processes including the e-Remittance
reconciliation, CEFT (Common Electronic expected to pave the way for delivering a more robust omni-channel customer experience
Fund Transfer) returns processes as well as in the coming years.
routine reporting to the CBSL were all
Investment in Digital Channels
streamlined. Efforts to increase the use of
data science also gathered momentum in Digital Channel Investment (Rs Mn) YoY Change
2022. Leveraging the Bank’s advanced data 2022 2021
warehouse capability, a range of data
Sampath WePay 9.9 1.2 722%
science models were developed and
Sampath Vishwa 1.5 - 100%
implemented to improve the decision
making capability of the credit and recovery Total 11.4 1.2 844%
operations.

launch the “Tourist Fuel Pass” - a unique

solution that serves a dual purpose of
supporting the tourism industry recovery,
The Bank also while drawing in foreign currency.
partnered with a The scope of the Cash Management

leading mobile network Solutions (CMS) framework was further
service provider in Sri

expanded. CMS, is a fully-fledged product
that allows user companies to seamlessly
Lanka to launch the automate a range of manual processes
“Tourist Fuel Pass”

and also benefit from real time updates of
financials, enhanced security, etc. A strong
- a unique solution uptake for CMS was observed in 2022 as
that serves a dual

corporates looked for convenient and cost
effective alternatives to cope with the
purpose of supporting practicalities of the fuel and energy crisis
the tourism industry

in the country.
recovery, while drawing At the same time, planned upgrades to the
in foreign currency.
Sampath Vishwa Corporate platform saw
the government payments module being Sampath Internet Payment Gateway Awareness
further enhanced, while the final phase of Campaign
The Sampath WePay wallet app was the trade related process automation,
updated with several new add-ons which involved digitalising the bank
allowing users to request for money from guarantee application, was also
another WePay customer, issue internal successfully completed during the year.
fund transfer instructions and activate Another notable development was the
push notifications. The QR integration to launch of an ambitious initiative to
the Bank’s IPG was also initiated which implement Open APIs that would enable
results in a more simplified scanning selected corporate clients to access their
experience for QR-driven online financial data in real time.
transactions.
A series of tailor-made solutions were

implemented to support customers in Way Forward
various sectors and industries, such as the Given the increasingly unpredictable economic environment, the focus for the
dedicated fee management and payment immediate future will be to reinforce Sampath Bank’s competitive position in the
solution for educational institutions. The digital banking space vis-à-vis innovations that enhance the customers’ digital
Bank also partnered with a leading mobile experience. Ongoing digitalisation and process automation initiatives will also be
network service provider in Sri Lanka to further expedited with a view to improving employee productivity and reducing cost-
to-serve.
Equally importantly, the Bank will strive to align its efforts to support the national
digital drive as outlined by the CBSL’s digital roadmap. Towards this end, the focus
will be on expanding the range of low cost, value added digital channels in order to
promote greater financial inclusion across Sri Lanka.
Tourist Fuel Pass

INTELLECTUAL CAPITAL

Competitive Positioning Operational Excellence Business Resilience
Intellectual Capital Overview
Area Term Goals Set in 2021 Progress in 2022 - Key Initiatives Way Forward
Medium To reinforce Sampath Bank’s Sampath Bank received top Continue to strengthen the
Term unique Brand identity as honours at the National Best Sampath brand identity to
Sri Lanka’s most digitally Quality ICT Awards 2021 (NBQSA), reflect a world-class bank
equipped commercial bank, clinching the overall Gold Award anchored by traditional
Brand Equity
while retaining its strong for the ‘Most Innovative Bank’ as Sri Lankan values.
traditional values of the well as the Gold Award - Banking,
country. Insurance and Finance Category.
Long To be positioned as a National Launched the “Pohosath Minissu”
Term bank by making the strongest campaign to reinforce the key
impact towards improving the message that “Values are what
country’s Economic, Social and bind us beyond a transaction”.
Environmental indicators.
Medium Ì Implementation of a In progress Ì Implement processes and
Term Security Information and controls to comply with
Event Management (SIEM) CBSL Direction No. 16 of
solution to create a 2021 on “Regulatory
centralised mechanism to Framework on Technology
capture data logs of all
Risk Management and
security devices across
Resilience for Licensed
Information the Bank coupled with a
Security Security Operation Centre Banks” and Personal Data
Architecture (SOC) to enable 24/7 - 365 Protection Act No. 9 of
monitoring of events. 2022.
Ì Invest in an EDR (Endpoint Ì Complete the ISO/IEC

Detection and Response) 22301 implementation by
solution to facilitate end 2024.
security of End Point
Terminals and Servers. Ì Complete the ISO/IEC
Implementation of ISO/IEC In progress 27035 and the ISO/IEC
Long
27035 20000 implementation by
Term
Implementation of ISO/IEC In progress end 2025.
22301
Implementation of ISO/IEC In progress
20000

Business Outcomes
ZERO 2022 ZERO 2022 Disaster Recovery Site

for Critical Functions
Data Leakage Incidents Cyber Attacks
Financial Capital Manufactured Capital Social and Relationship Natural Capital

Capital
Strong competitive Facilitates the provision of Builds trust among Working for a well reputed,
positioning enables the Bank required system support to customers, business strong, reliable organisation
to consistently improve its assist the performance partners and the builds loyalty and inspires
financial performance. efficacy of all delivery community. pride among employees.
channels.
Target 8.1: Sustainable Economic Growth
Awards and Accolades

Brand Excellence
� #1 Most Loved Bank - LMD Brand Finance Awards

� Top 10 in the Most Valued Entities Index - LMD Brand
Finance Awards
� #7 in the Business Today TOP 40 for 2021 - 2022
International Recognition
Two key awards at the Dragons of Asia 2022 Awards:

� Gold Award for “Best Mobile Marketing Campaign’’ for
“Touchless Cash Withdrawal”
www.sampath.lk
� Bronze Award for “Best Digital Campaign” for “Touchless
Scan this QR code for more details on
Cash Withdrawal”
Bank's Awards and Accolades

Business Excellence
Most number of awards at the LankaPay ‘Best Commercial Bank’ and ‘Best Retail Two most coveted awards at the NBQSA
Technnovation Awards 2022: Bank’ for the 9th consecutive year at - National ICT Awards 2022:
� Overall Silver Award for “Outstanding World Finance Banking Award (UK) � Overall Gold Award
Achievements and Excellence in
Interbank Digital Payments” � Gold Award - Banking, Insurance &
Finance Category
� Gold Award for “Most Innovative Bank
of the Year”
� Gold Award for “Bank of the Year for
Excellence in Customer Convenience” Awards received in 2022
� Gold Award for “Best Acquirer on acknowledge Sampath Bank’s desire
to drive excellence in every aspect of
Lanka Pay Online Payment Platform”
Merit Award for Bank of the Year for
the business.
�
Financial Inclusivity - Category A
Corporate Stewardship Other Awards
Four major awards at the Best Corporate � Gold Award for CSR Brand of the Merit Award for www.sampath.lk under
Citizen Sustainability Awards 2022 Year 2022 - SLIM Brand Excellence Best Corporate, Banking and Finance
conducted by the Ceylon Chamber of Awards 2022 Category - Bestweb.lk 2022 Award
Commerce: Ceremony
� ‘Market Leader - CSR’, Sri Lanka
� Overall 1st Runner Up - Euromoney Awards 2022
� Ranked among the Top Ten Best � ‘Best Bank for CSR’, Sri Lanka
Corporate Citizens - Asiamoney Magazine 2022
� Triple Bottom Line: Social Sustainability
(People) Award - Winner
� Community Relations Category Award

- Winner

Brand Equity
Since first opening its doors to Sri Lanka’s

banking public in 1987, Sampath Bank has
remained steadfast in its brand promise -
in that the Bank has continued to pledge
to support the country’s journey to achieve
economic empowerment and drive
sustained socioeconomic progress by
creating opportunities for individuals and
local businesses to achieve financial
security. In striving to live up to this
purpose, the Bank is guided by the time
honoured traditions and inherent cultural
values that form the identity of every Gold Award for “CSR Brand of the Year 2022” - SLIM Brand Excellence Awards 2022
Sri Lankan.
surrounding the COVID-19 pandemic and
With the country at a crossroads more recently as a result of the economic
economically and socially, the Bank crisis in the country. In this regard, the
embarked on a new corporate campaign Bank’s flagship CSR initiative - the “Wewata
in 2022 under the theme “Pohosath Jeewayak ‘’ tank restoration programme
Minissu” to reinforce the key message that was further accelerated, with 4 new tank
“values are what bind us beyond a restoration projects undertaken in 2022.
transaction”. The idea here is to create a The Bank has also undertaken to restore
fundamental distinction that unifies the canal system of Nalawagama Wewa in
Sampath brand with the country’s roots by Nochchiyagama as the 2nd phase of
establishing its connection to the much Nalawagama Wewa restoration project.
larger Sri Lankan identity. The “Wewata Jeewayak’’ initiative, which
was launched in 2007 and has since
To resonate the concept of “Pohosath continued to generate considerable
Minissu”, the Bank stepped up efforts to goodwill for the Sampath brand thanks to
support communities who had been its dedication to support livelihood
facing hardships, first due to challenges development of rural agri-based
Overall First Runner-up at the Best Corporate Citizen Sustainability Awards 2022 conducted by the
Pohosath Minissu campaign Ceylon Chamber of Commerce

communities across Sri Lanka. In

recognition of these long standing efforts,
Sampath Bank was bestowed the highly
coveted Gold award for the ‘CSR Brand of
the Year’, at the 21st SLIM Brand Excellence
Awards 2022. The commitment to CSR
received international acclaim as well in
the current year, with Sampath Bank
recognised as the ‘Market Leader - CSR ,
Sri Lanka by the Euromoney Magazine
2022 and as the ‘Best Bank for CSR’ by
Asiamoney Magazine 2022.
Continuing to demonstrate leadership in

difficult times, Sampath Bank joined a
National Best Quality ICT Awards 2022
number of peer banks in the spirit of
solidarity and partnership to launch the
‘Cycle to Work’ initiative. The effort was
designed to advocate eco-friendly, healthy,
and economical mode of transportation
and thereby offering a solution to the
challenges arising from the fuel crisis that
crippled transport infrastructure for
several months in mid-2022. The
programme was inaugurated in Colombo
on Thursday, 16th June 2022, with a
presence of nearly 100+ cyclists from all
participant banks.
Meanwhile, Sampath Bank’s unequivocal

commitment to service excellence despite
recent challenges, the ability to deliver LankaPay Technnovation Awards 2022
resilient financial performance and
maintain balance sheet stability even in brand equity in 2022. Sampath Bank based World Finance magazine, where
tough times, are the other key factors remained among the top three private Sampath Bank was declared Sri Lanka’s
that indelibly strengthened the Bank’s banks in Sri Lanka, backed by its total ‘Best Retail Bank’ and ‘Best Commercial
assets of Rs 1.3 Tn. Bank’ for the 9th consecutive year.
The numerous awards and accolades As always, Sampath Bank’s digital

received during the current financial year, superiority continued to receive
further endorses the Bank’s commanding commendations both locally and
position in the local banking industry. At internationally. Sampath Bank became the
the LMD Brands Annual Publication for first bank to win the overall gold in the
2022, Sampath Bank was again ranked as history of the National Best Quality ICT
the “Most Loved Banking Brand” in the Awards 2022 (NBQSA), by securing the
country, while also securing a spot among Gold Award - Banking, Insurance & Finance
the highly coveted Top 10 ‘Most Valuable in the consumer category for Sampath
Consumer Brands’ for 2022. These iPIN solution. At the LankaPay
achievements were further validated on Technnovation Awards 2022, the Bank
the global stage through the recognition won big, securing 5 top awards for digital
received from international awarding excellence, 3 Golds, 1 Silver and 1 Merit
bodies such as at the prestigious World award.
‘Cycle to Work’ initiative
Finance Banking Awards 2022 by UK

Information Security Architecture Routine internal audit programmes were In parallel, the annual Information Security
also conducted by the Bank’s Information risk assessment was conducted under the
Security Department and the Systems oversight of the Information Security
In the increasingly complex world of digital Audit Department to identify potential Department. Covering 62 Business Units
banking, Sampath Bank’s Information gaps in the Information Security and 15 Branches included in ISO
Security Architecture plays a vital role in Management System (ISMS) applied to the 27001:2013 scope, the Information
safeguarding the Bank’s integrity and Information Security Eco System. Security risk assessment serves as the
reputation. As such, the Bank remains fully
foundation for continuous and ongoing
committed to ensure that its information Quarterly vulnerability assessment and efforts to strengthen information security
security architecture continues to evolve annual penetration testing programmes architecture at a granular level.
in tandem with the latest global continued as usual, while threat alert
developments in the field. reports by FinCSIRT, VISA and other The Bank made good headway in
experts were carefully scrutinised and complying with the CBSL Direction No. 16
The ISO recertification audit was appropriate action taken to further of 2021 on “Regulatory Framework on
completed in 2022, enabling the Bank to strengthen the Bank’s systems against Technology Risk Management and
obtain the ISO 27001:2013 certification for such threats. Meanwhile, on the Resilience for Licensed Banks”. A gap
a further 3 year period (2022 - 2025). The recommendation of the SWIFT compliance analysis was completed and a detailed
CBSL regulatory compliance audit was also team, the Bank appointed an independent action plan drawn up to systematically
carried out as scheduled. These audit third party to implement the SWIFT address all gaps and ensure
findings did not reveal any significant non- Customer Security Programme (CSP) in implementation of corrective action ahead
conformities. order to improve due diligence in the of compliance deadlines. Phase I of the
SWIFT system. action plan which involved a detailed
review of the existing IT policies, saw the
following policies being further updated:
Response and Recovery Assessments and Audits
� Backup and Restore � Security Assessments
� Incident Response � Network and Wireless

Assessments
� Security Audits
Situational Awareness
� Continuous Monitoring
� Compliance and Reporting Information Security Architecture and Design
� Security Analytics Architecture � Current State

� Security Information and Documentation
Event Management (SIEM) � Design and Optimisation
� Security Awareness
� Zones and Conduits
Training
Endpoint Protection Network Security
� Patching and Anti-Virus � Firewall

� Application Whitelisting � Intrusion Prevention
� End Node Hardening
� Access Control
� Portable Media and Device Security
� Policy Development

� Access Control Policy
� Acceptable Usage Policy I de

P Bu ntify
BC
view sin
es Po
� IT Compliance Policy Re s
te
nt ts
Th
� High-Level Information Security Policy
ial
re
a
Board of Directors
� Email Access and Usage Policy
� Cardholder Data Management Policy Board Integrated Risk

Management Committee
� Information Systems Acquisition,
Development and Maintenance Policy
BCP Core Team
ent
� Third Party Organisation and Vendor
ssm
Test
Support Services Connection Policy BCP Implementation
sse
Teams/Operational
BC
kA
P
Additionally, to complement the data Management Teams
R is
classification initiatives undertaken in
ct
du
n
2021, the Bank invested in a new DLP Co
(Data Leakage Prevention) solution for the
protection of the Bank’s data in internal Es
Tea tablish BCP Recovery
systems and to safeguard data on the ma
nd R
ecovery Strategies
cloud. Awareness building initiatives also
continued. Bank staff were provided online
training, while email campaigns and social Business Continuity Planning Centre, Treasury, Customer Care Centre,
media banners were run to educate Finance, International Operations, Trade
The importance of a strong Business
customers on information security risk Services, FCBU, e-Remittance and
triggers. Continuity Plan (BCP) has never been more
apparent than in the past few years, first Secretariat continued to operate out of
during the COVID-19 pandemic in 2020 specific Disaster Recovery (DR) sites.
A new Cloud Computing Policy was
approved by the Board. The new policy and 2021 and the more recent fuel and
A special steering committee was also put
references the latest developments in the energy crisis in 2022.
ISO standard as well the CBSL Direction in place to provide continuous support to
No. 16 of 2021. In parallel, Sampath Bank’s Having taken broad-based measures to business units to enable them to maintain
information security way forward was also realign the BCP in response to pandemic uninterrupted functionality. The
reviewed and a new 3-year strategy related challenges, the Bank was able to committee was further tasked with
formulated taking into consideration the seamlessly mobilise its BCP protocols to reviewing and updating the BCP protocols,
latest developments in the local and global as needed to keep pace with the fast
overcome the challenges arising from the
context. evolving situation. Scheduled system
fuel and energy crisis and continue with
business as usual. Accordingly throughout simulations were conducted to ensure
much of 2022, mission critical core readiness of all critical functions, while DR
functions including Network Services sites for critical departments were
repeatedly tested to ensure uninterrupted
service.
Way Forward
Implement process and controls to comply with CBSL Direction No. 16 of 2021 on Meanwhile the Risk Management Unit
“Regulatory Framework on Technology Risk Management and Resilience for Licensed began the process of developing the
Banks” and Personal Data Protection Act No. 9 of 2022. Several ongoing projects are Recovery Policy (RCP) together with
also expected to be completed over the next few years. The implementation of a appropriate governance and oversight
Security Information and Event Management (SIEM) solution to create a centralised structure, which after being finalised will
mechanism to capture data logs of all security devices across the Bank coupled with likely require the BCP to be further
a Security Operation Centre (SOC) to enable 24/7 - 365 monitoring of events, are on updated in due course.
schedule to be completed by early 2024.
The implementation of ISO/IEC 22301, is on track to be completed by end-2024,

while the ISO/IEC 27035 started in the latter part of 2022 are expected to be
completed by end-2025.

HUMAN CAPITAL

Cost Management Operational Excellence Customer Experience Competitive Positioning
Human Capital Overview
Medium Expand the pool of internal Ì Certified Credit Practitioner Ì Develop and
Term specialist trainers in selected Programmes for Team implement a culture
areas such as Operations, Sampath (Level 1)/Team shaping initiative to
Credit and Recoveries in members nominated by the improve future
Learning and order to build a cohesive Management (Junior Executive orientation of teams.
Development performance driven culture I to Manager grades).
Ì Live activation of the
across the Bank.
Ì Discussion of Case Studies for Performance
Branch Managers, Assistant Management System
Branch Managers, Credit for the 2023
Officers of Branches and performance
Officers involved in Recoveries. evaluation cycle.
Medium Augment the Employee Ì Development of a new

Term Value Proposition (EVP) by Performance Management
Digital enhancing the employee System to ensure employee
Solutions digital experience. performance is accurately
reflected through rewards and
recognition.
Ì Invested in a more robust,

cloud-based Human Resource
Information System (HRIS)
architecture.
Business Outcomes
96.3% 81% 2.77

2022 2022 2022
Employee Employee Branch Bench
Retention Ratio Satisfaction Ratio Strength Score

HUMAN CAPITAL
Business Outcomes
Gross Income per Employee Cost per Employee Profit per Employee
Rs Mn Rs Mn Rs Mn
2022 50.0 2022 7.1 2022 3.3
2021 26.1 2021 5.2 2021 3.1
2020 25.3 2020 5.0 2020 2.0
2019 28.8 2019 4.9 2019 2.7
0 10 20 30 40 50 0 2 4 6 8 0 1 2 3 4
Financial Capital Manufactured Capital Intellectual Capital Social and Relationship

Capital
Performance driven culture Learning and development A highly talented and Empowered employees
supports the business interventions help motivated team enhances the are better equipped to
strategy to achieve higher employees to become more Bank’s competitiveness and deliver the Bank’s value
financial performance. productive through better bring in the competitive edge. proposition to its
use of resources. customers.
Target 3.4: Reduce mortality from non-communicable diseases and Target 5.1: End discrimination against females.
promote mental health. Target 5.5: Ensure full participation in leadership and
Target 3.8: Achieve universal health coverage. decision-making.
Target 4.3: Equal access to affordable technical, vocational and Target 5.B: Promote empowerment of women through
higher education. technology.
Target 4.7: Education for sustainable development and global Target 16.5: Substantially reduce corruption and bribery.
citizenship.

47 Rs 461 Mn Free
Transportation
124,304
team members who worth of ex gratia provided to of total learning
have served the Bank payments made to employees residing in hours.
for 25 years were the employees as a the Western province.
recognised with Long relief for the
Service Awards. economic crisis.
Governance and Best Practices Both policies were formally incorporated Measuring Employee
Governance and best practices are into the Bank’s online Employee Manual Satisfaction
fundamental principles that frame on 8th July 2022. In parallel, a specially
In a bid to obtain a more accurate
Sampath Bank’s approach to managing curated online training programme was
and objective view of employee
its Human Capital. The Bank has conducted to educate Branch Managers,
satisfaction levels, Sampath Bank
always given the highest priority to Assistant Branch Managers and Senior
commissioned an independent
complying with all applicable labour Management about policy guidelines
consultant to conduct a diagnostic
laws and the early enactment of new and their practical application. This one-
study in 2022. The study revealed
regulatory developments. The most day external training programme also
an overall employee satisfaction
recent regulatory change - the directive included a special segment on the Bank’s
average of 81%. The study also
amending the mandatory retirement age Grievance Handling Policy.
provided some important insights
with effect from November 2021, was fully regarding areas for improvement.
implemented Bank-wide. In related developments, the
Whistleblowing Policy was updated with
The new Performance Management
Moreover, Sampath Bank has consistently the inclusion of the Chairman of the
System and the Performance Based
demonstrated leadership in the adoption Board Audit Committee and the Company
Bonus Scheme developed in 2022
of global best practices to create a world- Secretary as additional contact points
is planned to be implemented in
class work environment that will allow for raising whistleblower complainants.
2023 in response to the suggestion
employees to grow and thrive. In 2022, the This was followed up with the structured
for a more streamlined approach to
Bank proceeded with the full-scale roll out training programme themed ‘Zero fraud
match rewards to performance.
of the “Anti-Bribery and Corruption Policy” culture and Whistleblowing Policy’ to
(ABC Policy) and the “Policy on Accepting inform all employees on the key functions
and Presenting of Gifts and Favours” (Gift and features of the policy. The updated
Policy). The ABC Policy aims to imbue the Whistleblowing Policy was also included as the Bank continued to further improve
culture of ethics among Bank employees a part of the mandatory reading material the relevance of the benefits offered to
and all other stakeholders authorised to in the digital on-boarding process for new employees.
act for and on behalf of the Bank, including recruits.
independent advisors, outsource In light of the ongoing economic crisis and
partners, third party contractors etc. The The Transfer Policy was also modified its related impacts, an ex gratia payment of
Gift Policy, which is more specific, seeks to to accommodate the creation of a Rs 461 Mn was offered to Team Sampath.
reinforce ethics by setting out terms and specialised resource pool for the Bank. Several of the existing travel allowance
conditions for the granting and accepting schemes, including the Disturbance
Remuneration and Benefits Allowance, Distance Travel Allowance,
of gifts by Bank staff. A key mandate of the
Gift Policy is that it strictly prohibits Bank Sampath Bank has always taken great Travelling Allowance for Outstation
staff from granting or receiving facilitation pride in its competitive and industry Branches, Accommodation Allowance
payments. leading remuneration and benefit and Regional Managers’ Allowance, were
structures. In the year under review,

HUMAN CAPITAL
all enhanced in response to inflationary to invest in a bicycle were offered a six- industry-wide effort with the patronage
conditions, while a number of additional month zero percent instalment plan of several peer banks. This new industry-
benefits were granted to assist employees under the Sampath Mastercard, Visa wide programme was launched in August
during the fuel crisis in mid 2022. A fleet or American Express credit card. Safe 2022 under the banner “Bankers’ Ride”.
of luxury buses were deployed across parking spaces in security-patrolled
selected routes to enable the team areas, facilities for showering and
members to commute to their assigned changing, were also provided by the
work location. This programme, which Bank. In August 2022, the Bank arranged
began at the onset of the fuel crisis, was for a one-day workshop where cyclists
continued up until the end of the year. were able to receive a free inspection of
Another novel programme was the “Cycle the condition of their bicycles by Wurth
to Work” initiative, a cost free, eco-friendly Lanka (Pvt) Limited, and obtain necessary
and healthy solution to help employees maintenance support including chain
to overcome the fuel crisis. The “Cycle to de-greasing and lubrication.
Work” initiative, which was implemented
on selected routes where a majority of Meanwhile, inspired by the massive Free transport service provided by the Bank
team members reside, was kicked off success of the “Cycle to Work” initiative,
in June 2022 at the Diyatha Uyana, with the programme was extended as an
the participation of over 100 cyclists.
Key Highlights - 2022
While the programme was inaugurated
in Colombo, the effort was a Bank-wide
one, where employees at all 229 Sampath
Bank branches across the country were
encouraged to participate. All participants
were offered a special incentive, along
with a complimentary cycling kit and as 10.5% Rs 1.58 Bn Rs 185 Mn Rs 4.56 Bn
well as training to promote rider safety Salary Increment New Housing New Vehicle New Emergency
on the streets, while employees inclined Loans Loans Loans
Sampath Bank Benefit Structure GRI 401-2
Description 2022 2021

Permanent Contract Differently- Permanent Contract Differently-
Employees Employees abled Employees Employees abled
Employees Employees
Profit Bonus
Salary Increment On renewal On renewal
of agreement of agreement
Allowances (as applicable)
Reimbursement of Course Fees/Exam Fees - -
Medical Facilities - -
Holiday Bungalow Facilities
Special Non-technical Training
Special Programmes for Children of
Employees

GRI 405-2
Basic Salary and Remuneration Ratio by Gender and Employee Category

The Bank has given an equal opportunity
Description 2022 2021 for all employees and does not tolerate
Male Female Male Female any form of unfair discrimination on the
basis of race, gender or disability. The
Corporate Management 1.00 1.00 1.00 0.88
ratio of basic salary at the entry level for
Senior Management 1.00 0.98 1.00 0.97
male and female is 1:1. However, this ratio
Executive Management 1.00 1.02 1.00 1.03
may change due to different service
Middle Management 1.00 1.00 1.00 1.02
periods of employees in the Bank and
Junior Management 1.00 1.00 1.00 0.99
elevation of the salary grade due to
Operational Staff 1.00 0.97 1.00 1.06
promotions.
Talent Management driven tools to measure and rate the first time in the 2023 performance
Talent management activities gathered employee performance, is geared to evaluation cycle, a Bank-wide
momentum in 2022. Stronger emphasis provide a more objective and impartial communication campaign was launched
on succession planning saw a special assessment of the individual and team to help employees understand the new
four-part training series introduced for performance and ultimately ensuring system and gain an insight into how their
KMPs (Key Management Personnel). rewards reflect performance. With the performance will ultimately be reflected in
new system expected to go live for their rewards.
A new batch of participants from middle
1,092 197
management on-boarded to the “Future
Leaders” programme – the Bank’s main
people development programme. 2022 2022
Meanwhile, job rotations offered as Job Rotations Staff Promotions
part of the Bank’s talent management
programme saw 1,092 employees across
the branch network benefitting from Future Leaders Programme Update - 2022
such opportunities. Job rotations have
proven to be an important capacity Programme Details Target Group
building tool, especially to improve the Certification programme on Board 1 Director
overall competency of branch teams. In Leadership
testimony to this, the overall BBS (Branch Networking and Mentoring with Board 2 Corporate Management Members
Bench Strength) Score saw 2.77 in 2022. Leaders
Women on Boards 5 Female Middle Management Employees
In 2022, the Bank took a major step WIM (Women in Management) 13 Female Middle Management Employees
forward in improving the effectiveness Leadership Series: Lead without Titles
of its talent management programme
by developing a new Performance
Management System and Performance New Recruits - Age Group and Gender GRI 401-1
Based Bonus Scheme. The proposed
Age Group 2022 2021
mechanism which creates a direct link
Male Female Grand % Male Female Grand %
between employee performance and Total Total
rewards, was custom developed for
Sampath Bank under the guidance 18-20 8 15 23 7.4 20 2 22 20
of a global consultancy firm. The new 21-30 94 163 257 83.2 42 34 76 69.1
Performance Management System and 31-40 11 12 23 7.4 6 4 10 9.1
Performance Based Bonus Scheme with 41-50 4 2 6 2.0 - - - -
its advanced algorithms and precision- Above 50 - - - - 2 - 2 1.8
Grand Total 117 192 309 100 70 40 110 100
Percentage [%] 38 62 100 64 36 100

HUMAN CAPITAL
New Recruits - Province and Gender
Province 2022 2021

Male Female Grand
Total
% Male Female Grand
Total
%
In 2022, the Bank
Central 17 24 41 13.3 - 1 1 0.9
took a major
Eastern 1 6 7 2.3 6 - 6 5.5 step forward in
improving the
North Central 3 3 6 1.9 - - - 0.0
North Western 11 6 17 5.5 1 1 2 1.8
Northern
Sabaragamuwa
-
8
4
4
4
12
1.3
3.9
1
1
-
-
1
1
0.9
0.9
effectiveness of its
Southern 21 18 39 12.6 1 1 2 1.8 talent management
programme by
Uva 7 4 11 3.6 1 - 1 0.9
Western 49 123 172 55.6 59 37 96 87.3
Grand Total 117 192 309 100.0 70 40 110 100.0 developing a
Percentage [%] 38 62 100 64 36 100
new Performance
Turnover - Age Group and Gender GRI 401-1
Management System
Age Group 2022
Male Female Grand %
2021
Male Female Grand %
and Performance
Total Total Based Bonus
Above 55 - - - - - - - - Scheme.
51-55 14 13 27 7.2 18 18 36 24.8
41-50 19 11 30 8.0 6 6 12 8.3
31-40 92 74 166 44.4 18 27 45 31.0 Learning and Development
21-30 78 68 146 39.0 30 18 48 33.1
The 3-year training plan established in
18-20 2 3 5 1.4 3 1 4 2.8
2021 was used as the basis for all training
Grand Total 205 169 374 100.0 75 70 145 100.0
activities undertaken in the current year.
Percentage [%] 55 45 100 52 48 100
Turnover - Province and Gender Investment

in Training
Province 2022 2021
Total Total Rs 52.1 Mn
Central 9 7 16 4.3 2 5 7 4.8

Eastern 14 1 15 4.0 2 2 4 2.8 Rs 56.6 Mn
North Central 5 3 8 2.3 - - - -
North Western 4 2 6 1.6 4 - 4 2.8 Rs 4.5 Mn
Northern 1 1 2 0.5 2 - 2 1.4 Total Investment
Sabaragamuwa 2 1 3 0.8 - - - - in Training and
Professional
Southern 3 12 15 4.0 5 4 9 6.2 Investment in Studies
Uva 2 - 2 0.5 1 - 1 0.6 Professional
Western 165 142 307 82.0 59 59 118 81.4 Studies
Grand Total 205 169 374 100 75 70 145 100.0
Percentage [%] 55 45 100 52 48 100

Training Update - 2022
Priorities and Objectives as per Key Activities for 2022

Training Plan Topics Covered Target Category
Talent Pipeline - Ensure 1:1 backup Certified Credit Practitioner Team Sampath (Level 1)/Team members
successors for identified Key Programmes nominated by the Management (JE I to
Managerial Positions Manager grades)
Customer Service - Set the benchmark Anti-Money Laundering and Front-line operational staff attached to
for the best in-class customer service Regulatory Compliance - Customer Branches
in the local banking sector Due Diligence
Canvassing Export Business Branch Managers, Assistant Branch
Managers, Credit Officers and Executive staff
Digital On-boarding Team Sampath
Product Knowledge - Provide Managing Risk in the Advances Zonal Managers, Regional Managers and
employees with the right knowledge at Portfolio Branch Managers
the right time to enhance their Foreign Exchange Operations Branch Managers, Assistant Branch
capacity to support customers to make Managers and Frontline operational staff
informed decisions regarding the attached to Branches
Bank’s products and services Deposit Mobilisation Assistant Branch Managers and Frontline
operational staff attached to Branches
Continuous Learning - Create an Discussion of Case Studies Branch Managers, Assistant Branch
environment to inspire employees to Managers, Credit Officers of Branches and
continuously improve their skills Officers involved in Recoveries
Information Security Team Sampath
Digital Transformation Team Sampath
Digital Awareness - New Version of Team Sampath
Sampath Vishwa
Workshop on the new Performance Executive staff attached to Departments
Based Bonus Scheme
Operational Excellence Team Sampath (especially for Frontline
operational staff attached to Branches)
Average Training Hours GRI 404-1 Average Training Hours per Employee - Category-wise
Description 2022 2021 Employee Category 2022 2021
Average Training Hours per Employee 31.5 38.2 Average Average

Training Hours Training Hours
Average Training Hours per Female 31.0 44.7
per Employee per Employee
Average Training Hours per Male 31.7 34.8
Corporate Management 42.5 6.0
Senior Management 38.1 16.8
Executive Management 74.8 32.3
Middle Management 38.3 43.6
Junior Management 45.8 59.0
Operational Staff 20.4 34.7
Other Grades 11.5 5.6

HUMAN CAPITAL
Competency Area-wise Summary
No. Competency Area 2022 2021

Number of Training Hours Number of Training Hours
Participants Participants
(1) Operations (Cash/Accounts Opening/Pawning/

Cheques/Clearing/Credit Cards) 8,768 7,698 5,891 6,931
(2) Credit and Recoveries (Credit/Recovery/SME/Micro
Finance) 4,890 9,058 5,810 8,688
(3) International Operations (Trade/Foreign Currency
Operations) 2,907 3,801 3,179 3,239
(4) Risk and Compliance (AML) 3,726 4,462 2,773 3,170
(5) Finance and Accounting 847 2,342 2,563 2,361
(6) Marketing (Products/Branding) 2,540 2,534 1,355 2,783
(7) Human Resource Management/Health and Wellbeing 2,751 3,041 2,124 991
(8) Legal and Good Governance 171 381 1,151 3,503
(9) Other Technical Programmes (Treasury etc.) 5,693 4,234 2,378 3,550
(10) Orientation Programmes 3,175 9,438 301 7,224
(11) Customer Service Excellence and Selling Skills 1,214 1,006 3,343 3,786
(12) Leadership and Management (Competency
Development Programmes/Strategic Management/
Change Management) 543 3,485 1,146 1,302
(13) IT Skills (Core Banking System/Digitalisation/Project
Management/E-Commerce etc.) 4,360 6,327 3,672 6,169
(14) Communication Skills (Business Writing/Effective
Communication) 926 1,168 214 280
(15) Other Non-Technical Skills (Train the Trainer etc.) 6,286 8,348 854 887
Sub Total (Excluding Learn with Vidvan - LMS) 48,797 67,323 36,754 54,864
(16) Learn with Vidvan - LMS (number of times participants
logged into LMS) 19,343 56,981 49,321 98,418
Grand Total 68,140 124,304 86,075 153,282

GRI 404-2,3
Average Training Hours per Year, per Employee by Gender and Employee Category - 2022
No. Competency Area Participants Training Hours Employee Category (Participants)
Operational Staff
Grand Total
Male
Female
Male
Female
Corporate
Management
Senior
Management
Executive
Management
Middle
Management
Junior
Management
Other
(1) Operations (Cash/Accounts
Opening/Pawning/Cheques/
Clearing/Credit cards) 5,913 2,855 5,174 2,524 9 183 816 1,853 1,751 4,075 81 8,768
(2) Credit and Recoveries (Credit/
Recovery/SME/Micro Finance) 3,608 1,282 6,641 2,417 22 250 864 1,192 854 1,683 25 4,890
(3) International Operations (Trade/
Foreign Currency Operations) 1,948 959 2,511 1,290 26 167 466 665 673 870 40 2,907
(4) Risk and Compliance (AML) 2,578 1,148 2,991 1,471 25 160 751 1,246 643 891 10 3,726
(5) Finance and Accounting 590 257 1,523 819 54 185 96 197 112 202 1 847
(6) Marketing (Products/Branding) 1,695 845 1,691 843 1 34 155 597 584 1,156 13 2,540
(7) Human Resource Management/
Health and Wellbeing 1,835 916 1,926 1,115 47 208 412 842 397 776 69 2,751
(8) Legal and Good Governance 117 54 139 242 - 24 64 44 13 26 - 171
(9) Other Technical Programmes
(Treasury etc.) 4,234 1,459 3,071 1,163 113 467 904 1,392 916 1,840 61 5,693
(10) Orientation Programmes 1,908 1,267 5,123 4,315 5 39 215 428 752 1,621 115 3,175
(11) Customer Service Excellence
and Selling Skills 807 407 661 345 4 31 100 220 255 550 54 1,214
(12) Leadership and Management
(Competency Development
Programmes/Strategic
Management/Change
Management) 357 186 2,381 1,104 105 195 199 29 2 6 7 543
(13) IT Skills (Core Banking System/
Digitalisation/Project
Management/E-Commerce etc.) 3,049 1,311 4,459 1,868 5 218 468 1,302 789 1,514 64 4,360
(14) Communication Skills (Business
Writing/Effective
Communication) 641 285 814 354 3 38 224 352 135 167 7 926
(15) Other Non-Technical Skills (Train
the Trainer etc.) 4,112 2,174 5,375 2,973 80 315 650 1,509 1,152 2,365 215 6,286
(16) Learn with Vidvan - LMS
(number of times participants
logged into LMS) 11,155 8,188 36,848 20,133 56 420 3,969 4,148 4,948 5,609 193 19,343
Grand Total 44,547 23,593 81,328 42,976 555 2,934 10,353 16,016 13,976 23,351 955 68,140
All employees receive regular feedback on performance and career development, and their level of performance is assessed on a
regular basis.

HUMAN CAPITAL
Employee Engagement Employee Digital Experience a focused group led by Sampath

With the COVID-19 pandemic restrictions Working with a clear vision, the Bank has Bank’s Managing Director Designate -
gradually being relaxed, the Bank resumed succeeded in automating many of its HR Mrs Ayodhya Iddawela Perera was the
many of its conventional employee processes over the years. To consolidate first of a series of events that kicked-
engagement activities involving physical and further strengthen these efforts, the off as part of international women’s day
interactions. Scheduled monthly SBEA existing Human Resource Information celebrations 2022. The focus group
(Sampath Bank Employees’ Association) System (HRIS) was replaced with a proved to be an important source of
meetings were held from mid 2022 new, more robust cloud-based system feedback to facilitate improvements.
onwards, while the HR Business Partner in 2022. Following the roll out of this In fact it was based on the suggestions
initiative was also reactivated with the latest version, a range of HR processes, received from the focus group discussion
Chief Human Resource Officer and the including Employee Information, Absence that a dedicating counselling hotline was
Deputy General Manager - Operations Management, Loan related functionalities established for female team members.
& Branch Banking visiting all branches and Payroll operations were migrated
across the network in rotation. to the cloud environment, which in turn Another notable initiative was “Let’s Talk”
has not only improved the efficiency of - an internal competition to recognise and
The Bank’s longstanding employee HR operations but also greatly enhanced reward talented orators among female
support arm - the “Helping Hands” the digital experience for employees by employees. A joint project organised by
counselling cell was also relaunched offering them convenient 24/7 system the HR Department and the Sampath
following the introduction of a specialist access. Bank Toastmasters Club, all contestants
team of independent third party expert were given the opportunity to be trained
counsellors accessible 24/7 via the special Diversity and Inclusion and mentored by veteran Toastmasters
counselling hotline. and present their skills to the judging
As a keen proponent of diversity and
panel at the main event held in September
inclusion in the workplace, Sampath
Additionally, the Bank commissioned a 2022.
Bank strives to lead by example the
global consultancy firm to conduct an advocacy of women in leadership
employee engagement survey in 2022, The Bank collaborated with a leading
roles. Each year, the Bank undertakes
which recorded an overall employee hospital in Colombo to conduct a special
various different programmes aimed
engagement score of 81%. wellbeing programme under the theme
at improving gender parity indicators.
“Women on Wellness” to raise awareness
Some of the most notable initiatives for
among female employees, regarding
2022 were Leadership development
common health afflicting women. A special
forums for female employees in middle
“Breast Cancer Awareness” workshop was
management. The forum which included
also conducted in December 2022 for the
benefit of female team members.
Other Employee Engagement Initiatives in place during 2022
24/7 HR Hotline for employees. Apart from these internal initiatives,

the Bank made a concerted effort to
MD’s Desk communication initiative used to share vital information, business progress support a number of external women’s
and convey the management expectations. empowerment programmes as well. The
MD’s Business Club, an internal blog that serves as a platform to receive open Bank hosted an open forum titled the
feedback from team members. “Wonder Women Initiative” to honour
the accomplishments of four women
"Sampath Sandeshaya” in-house magazine published quarterly to share the Bank’s leaders in Sri Lanka. The four leaders
clubs'/societies' news and employees’ articles and contributions showcasing their were Sampath Bank PLC former Deputy
creativity. Chairperson, Ms Dara Wijayatilake, Dialog
Special WhatsApp Group communications between Branch Managers, Assistant Axiata PLC Group Chief Customer Officer,
Branch Managers and the Head of HR. Ms Sandra De Zoysa, McLarens Group
Managing Director, Ms Shehara De Silva
“Sampath Sashreeka”, sustainable home gardening designed in line with Bank’s and Uber Sri Lanka General Manager
continuous effort to provide sustainable solutions to face the current social and Ms Bhavna Dadlani Jayawardena, who
economic concerns. shared their experiences and success
stories on achieving work-life balance.

Sampath Bank also signed up as one of the Annual Corporate Partners sponsoring the
‘Women on Boards’ training programme launched by the Women Directors Forum of
the Sri Lanka Institute of Directors.
Focus on Health and Wellness - Key Highlights for 2022 Online Workshops
Fire drills.
Free health screening for all staff.

Home Gardening
Webinar series on community safety for team members and their families.
Free consultations with a qualified general physician.
Free consultation from the “Counselling Cell” of the Bank with external
experts. Personal Financial
Management
COVID-19 vaccination drive.
Awareness on non-communicable diseases/health related issues, through

the publication of articles in the “Sampath Sandeshaya” in-house magazine.
Invested Rs 8.7 Mn to update fitness equipment at the Head Office

Photography
gymnasium.
Health and Wellness Challenges (both team and individual activities).
Cycle to Work initiative.
Lifestyle Transformation
Work-life Balance Initiatives
Way Forward
Ì Live activation of the
Performance Management
System and Performance Based
Bonus Scheme for the 2023
performance evaluation cycle.
Ì Develop and implement a culture

shaping initiative to improve
Sampath Bank Men’s Rugby team won the mercantile Sampath Bank Hockey “B” Team emerged champions
future orientation of teams.
seven-a-side bowl and the Women’s team was at MHA President’s Trophy (F-Division)
crowned runners up

HUMAN CAPITAL
Other Human Capital Statistics

Return to Work and Retention Rates after Parental (Maternity) Leave GRI 401-3
Description 2022 2021

Employees entitled to Maternity Leave 1,385 1,364
Employees obtained Maternity Leave 82 96
Employees returned to work after Maternity Leave 82 96
Employees still employed 12 months* after taking Maternity Leave 75 94
Return to Work Rate [%] 100 100
Retention Ratio [%] 91 98
*12 months considered from 01.01.2022 to 31.12.2022.
Reasons for Turnover vs Gender

Reason for Turnover 2022 2021
Total Total
To Join Other Competitor Organisations 9 5 14 3.8 4 1 5 3.4

To Join Other Organisations 40 12 52 13.9 20 7 27 18.6
Migration 84 53 137 36.7 13 18 31 21.4
Higher Studies 6 12 18 4.8 4 1 5 3.5
Personal Reasons 24 39 63 16.9 8 20 28 19.3
Retirement 19 18 37 9.9 20 22 42 29.0
Other 23 30 53 14.0 6 1 7 4.8
Grand Total 205 169 374 100.0 75 70 145 100.0
Percentage [%] 55 45 100 52 48 100
Composition of Governance Bodies and Breakdown of Employees per Employee Category According to Gender, Age Group,
Minority Group Membership and Other Indicators of Diversity - 2022 GRI 405-1
Age Group Corporate Senior Executive Middle Junior Operational Other Grand %
Management Management Management Management Management Staff Total
Female Male Female Male Female Male Female Male Female Male Female Male Female Male
18-20 - - - - - - - - - - 13 8 - - 21 0.5
21-30 - - - - 1 - 6 11 2 7 354 715 30 16 1,142 28.9
31-40 - - - 5 8 29 95 228 235 396 299 622 20 16 1,953 49.5
41-50 2 3 11 40 39 131 74 126 45 43 30 2 38 15 599 15.2
51-55 4 20 16 52 18 42 9 15 8 2 1 - 23 10 220 5.6
Above 55 1 3 - 3 1 3 1 - - - - - 1 - 13 0.3
Grand Total 7 26 27 100 67 205 185 380 290 448 697 1,347 112 57 3,948 100.0
Percentage
[%] 21 79 21 79 25 75 33 67 39 61 34 66 66 34

GRI 2-7,8
Type of Employment
Type of Employment 2022 2021
Female Male Grand Total Female Male Grand Total
Fixed Term Contract 19 18 37 49 33 82
Permanent 1,179 2,396 3,575 1,291 2,566 3,857
Probationers 73 50 123 21 10 31
Trainees 114 99 213 3 40 43
Grand Total 1,385 2,563 3,948 1,364 2,649 4,013
All categories indicated above are on full-time basis.
Province-wise Staff Allocation GRI 2-7
Province 2022 2021

No. of Female Male Grand No. of Female Male Grand
Branches/ Total Branches/ Total
Units Units
Central 23 73 188 261 23 72 194 266
Eastern 18 29 106 135 18 27 117 144
North Central 10 15 91 106 10 18 91 109
North Western 21 66 148 214 21 66 153 219
Northern 13 28 67 95 13 26 70 96
Sabaragamuwa 14 30 102 132 14 30 101 131
Southern 25 79 185 264 25 89 179 268
Uva 9 13 68 81 9 12 69 81
Western 179 1,052 1,606 2,658 174 1,024 1,674 2,698
Overseas Operations 1 - 2 2 1 - 1 1
Grand Total 313 1,385 2,563 3,948 308 1,364 2,649 4,013
Province-wise Employees by Type of Employment GRI 2-7
Province 2022 2021

Fixed Term Permanent Probationers Trainees Grand Fixed Term Permanent Probationers Trainees Grand
Contract Total Contract Total
Central - 259 1 1 261 - 266 - - 266

Eastern - 119 1 15 135 - 138 - 6 144
North Central - 105 1 - 106 - 109 - - 109
North Western - 203 2 9 214 - 218 1 - 219
Northern - 91 1 3 95 - 95 1 - 96
Sabaragamuwa - 129 1 2 132 - 130 1 - 131
Southern - 254 2 8 264 - 266 1 1 268
Uva - 78 - 3 81 - 80 - 1 81
Western 37 2,335 114 172 2,658 82 2,554 27 35 2,698
Overseas Operations - 2 - - 2 - 1 - - 1
Grand Total 37 3,575 123 213 3,948 82 3,857 31 43 4,013

SOCIAL AND RELATIONSHIP CAPITAL

Competitive Positioning Operational Excellence Customer Experience Corporate Citizenship
Social and Relationship Capital Overview
Medium Invest in creating unique Partnered with Paycorp Ì Drive greater digital
Term solutions to enhance International (Private) Limited, to adoption among
the customers’ digital become the first local bank to allow customers.
experience. businesses to benefit from near
Customer Ì Expand advisory
real-time payment and settlement
services in order to
using any LankaQR enabled apps
provide the impetus for
and digital wallets.
SMEs to grow
Long Term Diversify the product basket Launch of “Sampath e-Remittance” sustainably over time.
to drive more focused in partnership with a network of
customer segmentation. global Fintechs.
Medium Deliver sustainable solutions Undertook 4 new projects and 2nd Ì Prioritise the
Term for the community by phase of the restoration of development of
addressing root causes of Nalawagama Wewa, under the agri-entrepreneurs with
issues through the Socially “Wewata Jeewayak” tank restoration special emphasis on
Responsive CSR Model. programme. Value Added
Agriculture, Climate
Long Term Aim to develop industry- Extending the “Sampath Saviya” Smart Agriculture and
leading solutions to make a Entrepreneurship Development Water Management
Community
strong, impactful Programme to foster the Techniques.
contribution to the United entrepreneurship spirit among youth
Nations Sustainable and agri-entrepreneurs across the Ì Pursue collaborative
Development Goals. country. partnerships to support
community capacity
building programmes
for the benefit of a
wider cross section of
agri-based
communities.

Business Outcomes
2022
Digital Transaction Volumes
(Vishwa + Wepay)
Tran. Mn
High Volume ZERO
of Inward Incidents of
30 Remittances Customer Privacy
25 Violations
20
15
10
549 512
Direct Beneficiaries Acres of Paddy Lands
5 (Farming Families) from Benefitted from"
2019 10.8
2020 15.0
2021 23.9
2022 28.8
"Wewata Jeewayak" Wewata Jeewayak"

0
Programme Programme
Financial Capital Intellectual Capital Social and Relationship Human Capital

Capital
Enhancing the overall Insights gained from customers Building strong ties with Feedback from customers
customer experience help to prioritise the Bank’s customers and the helps to build employee
provides the opportunity investments across physical community enhances capacity by improving the
for the Bank to grow and digital channels. Sampath Bank’s brand relevance of training activities.
revenue streams. reputation over peers.
Target 1.4: Equal rights to ownership, basic services, technology Target 4.5: Eliminate all discrimination in education.
and economic resources. Target 4.7: Education for sustainable development and global
Target 1.5: Build resilience to environmental, economic and citizenship.
social disasters. Target 5.5: Ensure full participation in leadership and decision-
Target 1.a: Mobilisation of resources to end poverty. making.
Target 2.3: Double the productivity and incomes of small-scale Target 5.B: Promote empowerment of women through
food producers. technology.
Target 2.4: Sustainable food production and resilient Target 6.4: Increase water use efficiency and ensure freshwater
agricultural practices. supplies.
Target 2.A: Invest in rural infrastructure, agricultural research, Target 6.6: Protect and restore water-related ecosystems.
technology and gene banks. Target 6.B: Support local engagement in water and sanitation
Target 3.8: Achieve universal health coverage. management.
Target 4.4: Increase the number of people with relevant skills
for financial success.

Target 8.2: Diversify, innovate and upgrade for economic Target 10.C: Reduce transaction costs for migrant remittances.
productivity. Target 11.4: Protect the world’s cultural and natural heritage.
Target 8.3: Promote policies to support job creation and Target 13.1: Strengthen resilience and adaptive capacity to
growing enterprises. climate-related disasters.
Target 8.5: Full employment and decent work with equal pay. Target 15.1: Conserve and restore terrestrial and freshwater
Target 8.6: Promote youth employment, education and training. ecosystems.
Target 8.10: Universal access to banking, insurance and Target 15.5: Protect biodiversity and natural habitats.
financial services. Target 17.6: Knowledge sharing and cooperation for access to
Target 9.3: Increase access to financial services and markets. science, technology and innovation.
Target 9.4: Upgrade all industries and infrastructures for Target 17.11: Increase the exports of developing countries.
sustainability. Target 17.17: Encourage effective partnerships.
Target 10.2: Promote universal social, economic and political
inclusion.
Customer
As a responsible bank, Sampath Bank designed as a convenient, fast and cost obligations. A new Credit Nursing Unit was
continued to exercise its primary duty effective solution for Sri Lankans living formed in 2022 to advise both retail and
towards customers by supporting them in overseas to remit much needed foreign corporate borrowers in streamlining their
their journey to achieve financial stability currency to the country safely and legally. cash flows and when needed secure capital
and security. Taking into consideration the infusions etc.
rapidly changing operating environment, In light of the prevailing restrictions on
the Bank adopted a dynamic approach to outward foreign currency remittances, the A dedicated internal advisory team was
focus on creating targeted solutions that Bank offered special structured solutions also set up to offer specialist advice to
suit the needs of its diverse customer to importers of essential items, while exporters, especially SMEs and start-ups.
segments in the current economic climate. special credit facilities were extended to The export advisory team tied up with the
encourage investment in import Industrial Development Board (IDB) and
Product Innovation substitution and promote local Export Development Board (EDB) to
The Bank pursued product innovation as a manufacturing. A new LKR denominated conduct free webinars for entry level
means of allowing Sampath Bank pre-shipment facility was also rolled out to exporters. As part of this same initiative,
customers to benefit from market assist exporters to meet their working the Bank entered into a strategic
dynamics wherever possible. Following the capital needs. Meanwhile, selected retail partnership with Sri Lanka’s National
CBSL’s announcement of the policy customers were allowed to meet their Chamber of Exporters (NCE) to provide
interest rate hike in April 2022, rate foreign currency payments for education, export customers access to the NCE’s
structures for all term deposit formats medical and other necessities via their global networks.
were revised upward, while a series of Sampath Cards.
flexible tenor options (100, 200, 300 day Meanwhile, as part of the advisory services
deposits) were also introduced to give Financial Advisory Services offered to importers, the Bank undertook
customers the opportunity to leverage the With countless individuals and businesses to handle negotiations with foreign banks
high interest rates. under pressure owing to the ongoing on behalf of selected clients. Additionally,
economic crisis in the country, the Bank Sampath Bank became the first and only
The most significant product innovation significantly expanded its advisory services local bank to partner with the Indian Exim
for 2022 by far was the launch of “Sampath to assist affected customers to sustain their Bank to facilitate the smooth flow of
e-Remittance” in partnership with a operations and meet their debt service imports through the Indian credit line that
network of global Fintechs. The product is came into effect in March 2022.

Improving Customer Access support millions of Sri Lankans every day banking model, the new eZ banking service
Customer reach and accessibility have to attend to their banking needs. is a convenient and cost effective solution
been the cornerstone of Sampath Bank’s for customers to perform basic banking
success over the past 35+ years. The In 2022, the Bank took a giant step in transactions. In this way, the country-wide
Bank’s island-wide network of 229 fully expanding its channel architecture with network of 1,300+ eZ Banking agents
fledged branches, 363 ATMs, 360 CDMs, the launch of eZ Banking agents across greatly enhances Sampath Bank’s reach
98 CRMs and banking agents along with Sri Lanka in partnership with Dialog Axiata across Sri Lanka.
the suite of digital channels continue to PLC. Replacing the previous agency
Enhancing Customer Experience
Launch of the Sampath iPIN - self onboarding � Convenience of self-onboarding

facility through the Sampath Vishwa Online � Added security through the use of a virtual PIN
Banking Platform activated via dynamic key arrangement
� ATM Card PIN delivery process has been digitalised

Green PIN � Promote paperless processes by eliminating the need
for printing and mailing of PIN slips to the customer
Upgrading the Sampath Vishwa Mobile App with A Single Integrated App Solution that mirrors the features
the introduction of cutting-edge App features of the online platform
Introduction of new features to the WePay Ability to request money, manage internal fund transfers
Digital Wallet and activate push notifications feature
� Inclusion of video agent consoles to facilitate self

Updating digital banking centers at branches on-boarding of customers
through facilitating accounts opening via video
� Extended digital experience
conferencing
� Productive time saving to branch staff
Upgrading the ‘RemitWise’ app with the Allows users to track their e-Remittance transaction in real
inclusion of the end-to-end traceability function time
Enhancement of the Sampath Vishwa Corporate

facility with the inclusion of the automated DC Expedited processing of LCs (Letters of Credit) and both
(Documentary Credit) module and automated outward and inward TTs’ turnaround times reduced
TT (Telegraphic Transfer) module
Completion of the end-to-end digitalisation of

Speeds up the approval process and cuts overall
the Bank Guarantee request process linked to
turnaround times
LC opening
Relaxation of physical FD (Fixed Deposit) Promotes paperless processes to prevent customers from
certificates and Savings passbook issuance maintaining paper records
School fee management solution Enhanced accessibility and greater convenience for users

Increasing Customer Digital Adoption

Since first embarking on its drive to Children’s Savings
increase customer digital adoption in
2015, Sampath Bank has made excellent
The Bank achieved
headway in this sphere, most notably another first by
becoming the first
during the COVID-19 pandemic period
when digital adoption reached a peak.
Eager to keep the momentum going, the Sri Lankan bank to Sampath Pubudu Children’s savings
facilitate e-commerce
Bank activated several new measures in vouchers worth up to Rs 50,000/- to
2022 to encourage both corporate and
encourage progressive improvement
retail customers to migrate to digital transactions via in the savings balance.
mediums for routine transactions.
UnionPay International™
The Government Payments Solutions
portal on the Sampath Vishwa Corporate
(UPI) backed by its Children Art Competition
online banking platform was further latest 3DS 2.0 fraud

updated with Import and Export Control
Department, Employees' Provident Fund
protection software.
and Ceylon Petroleum Corporation added
in the current year. The Sampath Vishwa
Corporate online banking platform already Customer Communication and “Children Art Competition” in the
offers connectivity with a range of other Engagement following categories:
government institutions such as the
As was the case throughout the pandemic, � Age 4 - 8 years
Department of Inland Revenue of
the Customer Care Centre (CCC) team Topic: Good Habits
Sri Lanka, the Board of Investment of
Sri Lanka, Sri Lanka Customs and Sri Lanka took the lead in reaching out to customers
� Age 9 - 13 years
Ports Authority. In parallel, the Bank and maintaining ongoing communication
Topic: Good Values
continued to promote the use of its fully with various different segments in 2022 as
fledged Cash Management Solutions to well. The CCC ran several promotional A total of 2,662 entries were submitted
corporates and SMEs. campaigns and also conducted a series of via the branch network, with all
customer surveys to measure customer paintings received being displayed at
However, the main strategic thrust for the satisfaction on recent product launches the respective branches and a virtual
year was to promote the mainstream use such as customer on-boarding through art gallery created on the corporate
of QR payments. Leveraging its partnership video conferencing consoles at all new website to feature the winning entries.
with Paycorp International (Pvt) Limited, digital banking centres etc.
the Bank became the first local bank to
allow businesses to benefit from near real- Social media was another key platform
time payment and settlement using any used to connect with customers. However,
LankaQR enabled apps and digital wallets. with the gradual easing of COVID-19
The Bank achieved another first by restrictions, the Bank did resume
becoming the first Sri Lankan bank to traditional promotional activities to
facilitate e-commerce transactions via reconnect and engage more frequently
UnionPay International ™ (UPI) backed by with a wider customer base.
its latest 3DS 2.0 fraud protection software.
This new payment technology is equipped
with its secure payment processing,
payment gateway, and payment aggregator
services supported by direct connectivity
to UPI together with advanced fraud
protection capability for added user
security.

Women’s Savings Senior Citizens
Ladies 1st campaign offering additional Distribution of Sampath Sanhinda

rewards to acknowledge incremental medical benefit vouchers valued over
growth in the savings balance. Rs 200 Mn.
General Savings Beneficiaries of Inward

Remittances
Free LED Emergency Bulb campaign to Offering additional monetary incentives

promote general savings initiated in (in line with CBSL directions) for US Dollar
September 2022. for remittances made through the
‘Sampath e-Remittance’ service.
Managing Customer Complaints Customer Complaint Management Statistics

Sampath Bank has always placed great
Area of Complaint % of Complaint
importance on receiving customer
Resolution
feedback, including complaints. Towards
this end, the existing manual complaint Complaints regarding Digital Channels 100%
handling was replaced with the roll out of (Sampath Vishwa, WePay, etc.)
the new fully integrated digital Complaint Complaints regarding Staff Members 100%
Handling System (CHS) in mid-2022. As Complaints regarding Bank’s Procedures 100%
part of the new system, a new online
complaint form was also introduced via
Google Sheets. Customer Privacy The privacy policy on the Bank’s corporate
Safeguarding customer privacy is a critical website was also updated to provide more
The CHS which now serves as a central clarity to visitors to the site on the collection
component of Sampath Bank’s overall
platform to capture complaints from all and responsible use of their Personal
customer value proposition. In 2022, the
sources (except social media), which has Identification Information (PII). These
Bank took some important steps to further
helped to streamline the complaint changes were accompanied with a
strengthen its customer privacy
escalation process and also provide a customer awareness campaign conducted
management framework to comply with
range of complaint analysis data to support on multiple platforms.
the Personal Data Protection Act No. 9 of
ongoing improvements for the benefit of
2022 enacted in March 2022. Accordingly,
the customer. One of the key improvements There were no incidents of violations of
a Data Protection Officer was appointed to
made in 2022 was the extension of the customer privacy reported in 2022.
oversee the implementation of the
ATM card retention period to 10 days from
provisions of the act.
3 days to give customers a reasonable
time to reclaim their cards in the event
they were retained by the ATMs.

GRI 203-1,2/413-1
Community
A major part of Sampath Bank’s identity as

a National Bank stems from the willingness
to look beyond business to address the
Restoration of National
needs of the wider community. Over the Irrigation System
years, the Bank has pursued an integrated
approach to find solutions for systemic
issues that have prevented the country 2021
from achieving long-term socio-economic 2017 Urewa Kuda Wewa
Ambagaswewa
stability.
Driven by its strategic sustainability 2017 2018

Halmillakulama Wewa Dhanyawa Wewa
framework, the Bank continues to invest in
2022 2020
projects that challenge and empower Nalawagama Wewa
Kudagama Wewa
communities to elevate their socio-
2022 2022
economic status. The framework includes Korakahagolla Wewa
Rathmale Maha Wewa
a stringent Project Management and 2014
Evaluation Process (PMEP) to ensure every
2021
Dematawa Wewa
Athawatunu Wewa
project has the capacity to meet one or 2022
2021 Delikandali Wewa
more of the following objectives:
Pubbiliya Wewa 2020
Kindagalla Wewa
� Contribute towards resolving key
national issues. 2002
Ilukpelassa Wewa
� Support the socio-economic progress
2001
of Sri Lanka. Udamatthala Wewa
� Provide significant sustainable

2002
solutions that address the root cause Konkatiara Wewa
of socio-economic challenges faced
by communities.
� Promote sustainable value creation.

Tanks restored during past two decades by the Bank
� Promote increased stakeholder
engagement among community As part of its integrated approach to “Wewata Jeewayak” Tank Restoration
groups. community stewardship, the Bank also Programme (Restoration of National
� Serve the United Nations Sustainable
encourages its employees to engage in Irrigation System)
community work on behalf of the Bank. In The purpose of the Sampath Bank’s
Development Goals.
addition, regular internal communication flagship CSR initiative, “Wewata Jeewayak”
The Bank’s Corporate Sustainability and awareness sessions aim to help tank restoration programme is to restore
Department is responsible for managing employees understand core issues and to neglected/damaged irrigation tanks in Sri
PMEP as well as for providing oversight for motivate them to utilise their skills to Lanka’s dry and intermediary zones in
the execution and overall sustainability of deepen their involvement in grass root order to ensure farmers in these areas
all community projects undertaken by the level community activities. In this way, the have access to a reliable, year-round
Bank has succeeded in inspiring its branch supply of water to cultivate paddy in both
Bank to achieve the aforementioned
leadership to dedicate their time and in the ‘Yala’ and ‘Maha’ cropping seasons,
objectives. (Refer pages 49 and 50 of this
effort to community capacity building as well as any other ancillary crops
Integrated Annual Report for the Project
programmes. throughout the year. By creating the
Management and Evaluation Process).
ecosystem to facilitate year-round
cultivation, the project has helped small

scale farmers to earn a stable livelihood, Moreover, by reviving ancient and economic stress caused by the economic
while transforming them into agri historical infrastructure in this way, the crisis that materialised in the early 2022,
entrepreneurs capable of making a “Wewata Jeewayak” tank restoration Sampath Bank made a conscious decision
meaningful contribution to their respective programme also reaffirms the Bank’s to increase its investment in the “Wewata
local economies. On an overall basis, the commitment towards the preservation of Jeewayak” tank restoration programme,
project also makes a strong positive Sri Lanka’s national heritage. which saw the Bank undertaking 4 new
impact on resolving food security issues of projects and 2nd phase of the restoration
rural communities. In light of the long term economic of Nalawagama Wewa in the current
hardships caused by the COVID-19 financial year.
pandemic followed by the severe
“Wewata Jeewayak” - Project Summary 2022
Korakahagolla Delikandali Kudagama Rathmale Maha 2nd Phase of Total

Wewa Wewa Wewa Wewa Nalawagama
Wewa
Direct 100 94 families 115 90 150 549

Beneficiaries belonging to the
(Farming indigenous
families) community
Acres of Paddy 73 104 45 80 210 512

Lands Benefitted
Stakeholder Mahasen Dambana 401 Eksath Parakum Jayabima

Partnerships Farmers Delikandali Wewa Farmers Farmers Farmers
Association Farmers Association Association Association
Association
Department of Department of Department of Department of Department of
Agrarian Agrarian Agrarian Agrarian Agrarian
Development Development Development Development Development
District Office, District Office, District Office, District Office, District Office,
Matale Badulla Anuradhapura Kurunegala Anuradhapura
Community Community Community Community Community
Members Members Members Members Members
Korakahagolla Wewa in Aluthgama, sludge accumulation, which has caused over 90% of the tank surface to be covered by
Dambulla aquatic plants. The Korakahagolla Wewa became the 13th undertaking under Sampath
The Korakahagolla Wewa is situated in Bank’s “Wewata Jeewayak” tank restoration programme.
Aluthgama, Kalundawa located in the
historically significant Dambulla area.
Spanning approximately 15 acres, the
Korakahagolla Wewa supports around 120
families, who depend on the tank for
farming, animal husbandry and other
livelihood development activities.
Investigations undertaken as part of the

PMEP revealed that due to years of neglect,
the tank bund was severely damaged in
several places, while the tank bed had
become quite shallow due to years of Pre-condition of the tank Work in progress

Delikandali Wewa in Dambana,

Mahiyanganaya
The Delikandali Wewa is located in
Dambana in Mahiyanganaya - the
heartland of Sri Lanka’s indigenous
community, the 15 acres Delikandali
Wewa has been the primary water source
for these indigenous communities.
However, the dilapidated condition of the
Delikandali Wewa has left these mainly
farming families helpless due to the lack
of adequate water to irrigate their paddy
lands. Over 100 acres of paddy land have
been affected in this way, causing
Ground breaking ceremony Executive Director/Chief Financial Officer addressing
immense hardship to 350+ indigenous the gathering
people who depend on paddy cultivation
as their main livelihood. Testimonial
Following the urgent appeal made by the
Delikandali Wewa Farmers Association,
Sampath Bank immediately initiated a
PMEP to discover the scope of work
required for the restoration of the
Delikandali Wewa. The project
undertaken by the Bank involved the
restoration of the entire tank, including
rebuilding the damaged spill, sluice gate
Conducting traditional rituals at the ground
and water distribution canals. Once breaking ceremony
completed, the tank will enable the “On behalf of the indigenous
indigenous community to benefit from a community of Dambana, I would like
consistent, year-round water supply to to express my heartfelt gratitude to
irrigate their farmlands. Sampath Bank for undertaking to
restore the Delikandali wewa. While
The decision to undertake this project we had made countless requests
also coincides with Sampath Bank’s to numerous authorities over the
“Pohosath Minissu” campaign, signifying years, it was to no avail. But when
the Bank’s quest to portray those values we reached out to Sampath Bank,
are what bind us beyond a transaction. within a matter of days, officers from
their Mahiyanganaya branch visited
our community to assess our needs.
Pre-condition of the tank’s spill
And considering our desperate
situation, the Bank expedited the
tank restoration process. Thanks to
Sampath Bank, our community now
does not have to worry about water
for cultivation.”
Wanaspathi Uruwarige Wannila Aththo

Leader of the indigenous community, Sri Lanka
Community engagement during the restoration process

Kudagama Wewa in Thalawa, embankment, in turn leading farmers to install sandbags as a temporary solution to stem
Anuradhapura the outflow. The Kudagama Wewa became the 15th undertaking under Sampath Bank’s
The Kudagama Wewa, a 20 acres tank “Wewata Jeewayak” tank restoration programme.
situated in Thalawa, Anuradhapura, is the
primary source of irrigation for around 45
acres of paddy land supporting the
livelihoods of 115 farming families. It is also
a main feeder for a neighbouring water
project, which provides clean drinking
water for over 500 families in the
surrounding villages of Higuruwewa,
Tirappane and Acharigama. Through the
PMEP, it was found that at present, the
tank’s bund was subject to damage by a
slowly expanding tunnel resulting in water
Pre-condition of the tank bund and sluice Work in progress
seeping from the tank through to the
Rathmale Maha Wewa in covered by aquatic plants. The canal system was also found to be damaged in several
Rathmale, Maho places. To mark the commencement of the restoration, the Bank’s Corporate Sustainability
The Rathmale Maha Wewa situated in team conducted a stakeholders’ meeting which saw the participation of officers attached to
Rathmale, Nagollagama, Maho bears a the Department of Agrarian Development, District Office, Kurunegala and members of the
historical significance to the traditional Parakum Farmers’ Association, Government officers and villagers.
agriculture-based village communities in
the vicinity. With a surface area of 35 acres,
the tank has long been the main water
source to irrigate 80 acres of paddy land,
benefitting 90 farming families.
Investigations undertaken as part of the
PMEP revealed that due to years of neglect,
the tank bund was damaged in several
places, while the tank bed had become
quite shallow due to years of sludge
accumulation which has caused over 90%
of the surface of the tank surface to be
Pre-condition of the tank Stakeholders meeting
2nd Phase of Restoration of

Nalawagama Wewa in Nalawa,
Nochchiyagama
The latest undertaking under the “Wewata
Jeewayak” programme is the 2nd phase of
restoration of Nalawagama Wewa located in
Nalawa, Nochchiyagama. With a surface area
of 175 acres, the tank currently provides
water to irrigate 210 acres of paddy land,
benefitting 150 farming families. Phase 1 of
the project completed in 2020, saw the Bank
undertaking to restore the tank’s main sluice
and the two auxiliary sluice gates. Under the Pre-condition of the canal system Ground breaking ceremony
phase 2, the Bank hopes to restore water
canal system which has been damaged in
several places.

GRI 203-1,2/413-1
“Sampath Saviya” was “Sampath Saviya” - Entrepreneurship Development Programme

“Sampath Saviya” was initiated in 2013 with the intention of uplifting and
initiated in 2013 with the empowering Sri Lanka’s Micro, Small and Medium Entrepreneur (MSME)
intention of uplifting and

sector. Over the past 9 years, the Bank has conducted specially curated
workshops targeting various different sectors including youth, women,
empowering Sri Lanka’s innovators, exporters, undergraduates, differently abled persons, retirees
etc. Working with the theme - “Youth Entrepreneurship”, the Bank carried out
Micro, Small and Medium the following programmes in 2022:
Entrepreneur (MSME) sector.

“Future Business Leaders” -
Entrepreneurship Development
Programme for Youth
The programme which focuses on
inculcating entrepreneurial thinking of the
participants was conducted with the aim
of motivating youth to be job creators
rather than job seekers. A programme was
conducted for the benefit of students of
the Technical College, Galle and another
programme was conducted for
undergraduates of Wayamba University of Youth entrepreneurship development programme for Webinar on youth entrepreneurship development for
Sri Lanka. students of Technical College, Galle undergraduates of Wayamba University of Sri Lanka
‘BIZTEP’ - Youth Entrepreneurship � Finding solutions for problems and

Development Programme concerns faced by young
In 2022, the ‘BIZTEP’ - Youth Entrepreneurship entrepreneurs when starting a
Development Programme which was business.
initiated in 2021 under the “Sampath Saviya”
banner was continued. A collaborative effort The programme comprising 12 sessions
between Sampath Bank and the Ceylon was conducted via interactive webinar
Entrepreneurs’ Club (CEC), the ‘BIZTEP’ - series to enable participants to understand
Youth Entrepreneurship Development basic business concepts and learn about
Programme was designed to empower taking their business to the next level. The
young entrepreneurs in Sri Lanka via the programme also provided opportunities
following themes: for start-up entrepreneurs to connect and Awarding a certificate to an entrepreneur for the
network with CEC members to develop successful completion of the programme
� Innovate, ideate and commercialise and implement their own viable and
ideas of young entrepreneurs. innovative business models. The
programme ended successfully, benefiting
� Generate the entrepreneurship more than hundred start up
culture in Sri Lanka. entrepreneurs.
� Promote entrepreneurship ideas in
youth sector.
Facilitators of the webinar series

“Sampath Saviya” Business Startup relevant institutions and other vital

Advisory Service information. Through these efforts, the
Given the success of this initiative which designated team from Sampath Bank’s
was launched in 2021, the Bank decided to Corporate Sustainability Department
further expand the Business Startup assigned to manage the Business Startup
Advisory Service in 2022 to offer guidance Advisory Service continued to focus on
to start-up budding entrepreneurs nurturing the entrepreneurship culture
regarding the formal business registration around the island.
process, information to connect with the
Social media post on business startup advisory service
“Lead the Way - Explore Export including business planning and

Markets” - Webinar for Exporters budgeting. The webinar also included a
Reiterating the commitment to boost the special session focused on giving
country’s export revenue, Sampath Bank participants a basic understanding of
partnered with the Sri Lanka Export export markets and the latest e-commerce
Development Board (EDB) and the and digital marketing trends, coupled with
Industrial Development Board (IDB) to an overview of Sampath Bank’s expertise
introduce a special knowledge sharing in facilitating export oriented businesses.
webinar for entry-level exporters.
Conducted entirely in Sinhalese, the first
webinar saw several leading experts
offering guidance and tips on key topics, Webinar for exporters
“Wonder Women” Initiative - A Pursuing the objectives of the International Women’s Day 2022, with an aim to establish a
Special Women Empowerment society free of gender prejudice, the forum celebrated the accomplishments of women
Programme leaders in different industries, sharing their personal experiences on venturing towards
Sampath Bank PLC hosted “Wonder success in their corporate journey.
Women” Initiative, an open forum of
discussion on the significance of
celebrating women’s achievements and
addressing leadership roles and prejudice
that exist in today’s society for women
leaders.
Facilitators of the programme Panel discussion at the programme

GRI 203-1,2/413-1
“Education for All” - Projects to Support Equal Access to Quality Education

and Career Development
“Corporate Leadership” Programme for School Leavers and Undergraduates
Sampath Bank’s long-standing internship programme provides opportunities for youth,
mainly school leavers and undergraduates to begin their career by gaining exposure to
a world-class corporate environment. The programme is designed to build a more
disciplined work culture and foster professional work ethics among new entrants to the
workforce.
Career Fairs and Career Guidance Sessions

In view of improving quality education and providing opportunities among youth, Internship programme for school leavers and
Sampath Bank in 2022 conducted Career Fairs and Career Guidance Sessions at undergraduates
respective universities.
No. Programme Programme University Number of

Type Participants
1. Opening Ceremony of Industry Liaison Office Career Forum University of Sri Jayewardenepura 20
2. Session on Personal Branding Career University of Sri Jayewardenepura 25
Guidance
3. KDU Career Fair - 2022 Career Fair General Sir John Kotelawala Defence 150
University
4. Career Fair Career Fair University of Ruhuna 500
5. Talent Path 1.0 Career University of Moratuwa, Rajarata 100
Guidance University of Sri Lanka, General
Sir John Kotelawala Defence
University and University of Kelaniya
6. Career Fair Career Fair Sabaragamuwa University of 300
Sri Lanka
7. Industry Forum - 2022 Career Forum University of Sri Jayewardenepura 20
8. “Touch the Peak” - Annual Job Fair 1st Episode Career Fair University of Sri Jayewardenepura 500
9. Inaugural Ceremony - Online Job Portal System Career Forum University of Colombo 100
10. Industry Forum - 2022 Career Forum University of Sri Jayewardenepura 50

11. Stakeholder Meeting for Graduates’ Skills Career Forum Eastern University of Sri Lanka 50
Mapping
12. “Touch the Peak” - Annual Job Fair 2nd Episode Career Fair University of Sri Jayewardenepura 100
13. “Clash of Minds 22” - Welcome to the Banking Career Forum University of Sri Jayewardenepura 100
Industry

No. Programme Programme University Number of

Type Participants
14. “What next” - The Career Expo 2022 Career Fair University of Colombo 1,000
15. “Touch The Peak” - Annual Job Fair 3rd Episode Career Fair University of Sri Jayewardenepura 500
16. “Touch The Peak” - Annual Job Fair 4th Episode Career Fair University of Sri Jayewardenepura 500
17. Guidance for a Successful Interview Career University of Sri Jayewardenepura 40
Guidance
18. Mock Interview Career University of Ruhuna 100
Guidance
19. “Industry Day 2022” - A Career Fair for Science Career Fair University of Peradeniya 150
Graduates
20. Career Guidance Programme Career University of Peradeniya 100
Guidance
21. Session on Industry Best Practices Other University of Peradeniya 45
22. HR Camp Other University of Peradeniya 40
23. Industrial Visit Other University of Sri Jayewardenepura 30
24. 3rd Annual Conference on Business Economics Other University of Sri Jayewardenepura 100
(ACBE) 2022
25. “How to Crack the Interview Lock” - Career Career NSBM Green University 150
Guidance Programme Guidance
26. Awareness of HR Practices and Processes Other Saegis Campus 10
27. Industry Day - 2022 Career Fair University of Peradeniya 150
28. Industry Mentoring Programme 2022 Career Event University of Peradeniya 1,000
29. Virtual Career Fair - 2022 Career Fair Eastern University of Sri Lanka 200
30. Career Fair Career Fair University of Ruhuna 1,000
Career guidance session for undergraduates Guest lecture at career guidance session Conducting a career fair

GRI 203-1,2/413-1
“Hope for a Life” - Health Sector

Facilitation Programme
The “Hope for a Life” programme is a part
of the Bank’s strategic CSR focus to
strengthen the national health sector by
improving the quality and access to
healthcare services across a wider cross
section of the populace.
The projects undertaken in 2022 were

mainly aimed at providing life saving
medicine and medical equipment to state Endowment of essential drugs to Lady Ridgeway Endowment of essential drugs to District General
Hospital for Children Hospital, Mannar
hospitals facing a shortage of such items
due to the lack of imports as a result of the
foreign exchange liquidity crisis in the
country. The following state hospitals were
facilitated under this programme:
� Teaching Hospital, Batticaloa
� Teaching Hospital, Kurunegala
� District General Hospital, Mannar
� National Eye Hospital of Sri Lanka
� Provincial General Hospital, Badulla Endowment of medical equipment to National Eye Endowment of essential drugs to Teaching
Hospital of Sri Lanka Hospital, Kurunegala
� District General Hospital, Monaragala
� Base Hospital, Dehiattakandiya
� Lady Ridgeway Hospital for Children
� Teaching Hospital, Kuliyapitiya
Other Community Projects

Endowment of Nallur Kandaswamy
Temple Annual Festival
The annual historic festival of the Nallur
Kandaswamy Temple is the longest Endowment of medical equipment to Teaching Endowment of essential drugs to Provincial
Hospital, Batticaloa General Hospital, Badulla
religious festival as well as the largest
gathering of people in Jaffna peninsula and
more than 200,000 devotees take part in
every year. Sampath Bank has sponsored
this programme continuously for more
than 9 years including the year 2022.
Endowment of essential drugs to Base Hospital, Endowment of essential drugs to Teaching

Dehiattakandiya Hospital, Kuliyapitiya

GRI 413-1
Operations with Local Community Engagement, Impact Assessments and Development Programmes
Programme Number of Number of

Beneficiaries Volunteered
Employees
Engaged
Community SDGs Served

Capacity Building
� “Wewata Jeewayak” - Restoration of Korakahagolla Wewa in Aluthgama, Dambulla 480 30
� “Wewata Jeewayak” - Restoration of Delikandali Wewa in Dambana, Mahiyanganaya 470 30
� “Wewata Jeewayak” - Restoration of Kudagama Wewa in Thalawa, Anuradhapura 2,460 30
� “Wewata Jeewayak” - Restoration of Rathmale Maha Wewa in Rathmale, Maho 360 29
� “Wewata Jeewayak” - 2nd Phase of Restoration of Nalawagama Wewa in Nalawa, 600 30
Nochchiyagama
“Hope For a Life” - Endowment of medical essentials to meet drug shortage of
state hospitals due to the lack of imports as a result of the foreign exchange
liquidity crisis in the country
� Lady Ridgeway Hospital for Children 370 12
� District General Hospital, Mannar 100 17
� Teaching Hospital, Kurunegala 775 17
� Provincial General Hospital, Badulla 600 20
� District General Hospital, Monaragala 200 17
� Base Hospital, Dehiattakandiya 75 17
� Teaching Hospital, Kuliyapitiya 300 18
� Teaching Hospital, Batticaloa 5,000 20
� National Eye Hospital of Sri Lanka 20 17
Other Community Projects 7,020 57
Entrepreneurship SDGs Served

Development
“Future Business Leaders” - Entrepreneurship Development Programme for Youth
Ì Technical College of Galle 225 08
Ì Wayamba University of Sri Lanka 182 14
Ì “Biztep” - Youth Entrepreneurship Development Programme 360 70
Ì “Lead the Way - Explore Export Markets” - Webinar for Exporters 3,300 50
Ì “Wonder Women” Initiative - A Special Women Empowerment Programme 1,841 10
Ì “Sampath Saviya” Business Startup Advisory Service 30 08
Education for All SDGs Served
Ì “Corporate Leadership” Programme for School Leavers and Undergraduates 833 608
Ì Industry Forums and Career Guidance Sessions for Undergraduates 7,130 120
Other Educational Projects 1,000 17
Way Forward
Under the Agri-Entrepreneurs Development Programme of the Bank; Value Added Agriculture, Climate Smart Agriculture and
Water Management Techniques have been identified as priority areas for future investment. In this regard, the Bank will aim
to collaborate with like-minded organisations to engage in capacity building programmes for the benefit of a wider cross
section of agri-based communities.

Supplier
Suppliers play an integral role in ensuring covering over 50% of the existing supplier the initial system implementation in
business continuity and protecting the base, to assess their adherence to the progress, the live system roll out is
Bank’s ability to create stakeholder value. Bank’s supplier code of conduct. expected to be completed by end 2023.
As such, Sampath Bank strives to build a
strong, reliable supplier network to ensure Digital Solutions Sustainability Integration
day-to-day operations can be managed Taking a major step forward in streamlining Working to strengthen supplier alignment
smoothly and sustainably. the overall procurement process, the Bank with the Bank’s sustainability framework,
began developing a new end-to-end the procurement teams introduced a
Communication and Engagement ‘Procurement to Payment’ system to series of new guidelines in order to verify
Continuous and ongoing communication seamlessly integrate the Finance, Logistics, the suppliers’ ability to provide the
with key suppliers has always been a IT, Engineering and Marketing elements products and services as per the current
priority for Sampath Bank. In the current applicable to the procurement process. environmental rules and regulations. In
financial year, the Bank’s procurement Supported by digitally-enabled cloud this regard, it was made mandatory for all
teams resumed regular in-person based architecture, the new ‘Procurement new suppliers to furnish true copies of
engagements with suppliers. (In-person to Payment’ system with its enhanced relevant environmental certificates/
interactions were previously suspended functionality, greater transparency, registrations issued by relevant authorities,
due to COVID-19 restrictions). In-person reliability and reporting accuracy will as part of their application to be included
meetings were held during the year enhance overall efficiency in the in the Bank’s supplier registry.
procurement to payment process. With
Supplier Testimonials
The support of the Bank over the years has been

instrumental in growing our business. Today
Aiken (Pvt) Ltd has grown to become the leading
specialist in Sri Lanka for Banking Automation
with a product line covering a wide range of
banking products and services including Cash
Counting Machines, Cash Sorting Machines, Cash
Deposit Machines, Cash Bundling Machines, Bulk
Cash Deposit Machines, Cash Recycling Machines
and POS Machines, etc. The Company currently
provides direct employment to over 300 people.
Aiken (Pvt) Ltd Console Electronics (Pvt) Ltd
I wish to extend our heartfelt tribute to Sampath Console Electronics (Pvt) Ltd, better known as
Aiken (Pvt) Ltd, was incorporated in 1996 and is
Bank for standing by Aiken (Pvt) Ltd at all times. ‘CONSOLE’ was set up as a private limited
known as one of the pioneers in the field of
The close relationships we have built with the company in 1981, and initially focused on low-
Banking Automation and Consumer Electronics
Sampath Bank team has always been a great end power electronics. Shortly afterwards,
in Sri Lanka.
strength to our organisation and with the Bank’s CONSOLE envisaged the need for an advanced
Sampath Bank has been one of our major support, I know Aiken (Pvt) Ltd will grow to even product range in the field and ventured into
customers for more than a decade and has greater heights in the future. Power Protection Equipment (UPS systems etc.).
The first-ever UPS system commissioned by
contributed immensely to the success of our
Nalin Amarasinghe CONSOLE was at Sampath Bank’s City Branch in
organisation. We started our journey by supplying
Managing Director 1987, which marks the start of a long and fruitful
Sampath Bank with their requirement for basic
Aiken (Pvt) Ltd business relationship between the two entities.
currency counting machines and Casio
No. 267, Polhengoda Road, This partnership which now spans 35+ years has
Calculators and as of today, we provide the Bank
Colombo 05, Sri Lanka. been a great strength in helping CONSOLE
with the most sophisticated Cash Recycler weather various challenges. In fact, Sampath
Machines for the expansion of their ATM/CRM Bank has been the sole banking partner for
network. CONSOLE for the past 35 years.

Supplier Testimonials
In 1988, CONSOLE started operating a CONSOLE is delighted to continue offering our We at CONSOLE take great pride in being able
corporate current account with Sampath Bank advanced technology Power Protection to support this network now and in the future.
- Colombo 10. With the growth of our business Solutions, together with our dependable and
since then, CONSOLE has obtained many committed 24/7 maintenance support to S. M. Naveendran
banking facilities and benefitted from Sampath Sampath Bank’s branch and ATM networks Chief Operations Officer
Bank’s premier customer relationship service. around Sri Lanka. Console Electronics (Pvt) Ltd
09, Dewale Road, Pagoda.
Supplier Evaluation Model
� Industrial Safety
� Environmental
� Financial Stability Protection
� Market Dependability
� Availability
� Delivery Capability
� Human Resources
Industrial
Safety � Schedule
� Volume
Risk Quality � Effectiveness
Assessment
� Technical Handling
Categories � Packing
and Criteria � On-time Delivery
� Resources
Logistics Supplier
� Product Know-how
Innovation Mechanism
� Innovative Power Registry
� Co-operation
Commercial
Viability
� After Sales Services
� Availability of Supply Chain
Qualified Technical Staff Management
� Documentation
� Price Quotation
� Co-operation
� Behaviour
� Quality
� Contract Processes Management
� Co-operation
Supplier
Quality
Management
Supply Chain Supplier

Risk Performance
Management Management
Our supplier evaluation model remained unchanged in 2022 compared to the previous year.

NATURAL CAPITAL

Competitive Positioning Operational Excellence Corporate Citizenship
Natural Capital Overview
Term Goals Set in 2021 Progress in 2022 - Key Initiatives Way Forward
Medium Term Systematically expand the scope of Total lending to the NCRE sector: Ì Strengthen environment
the Bank’s lending model to focus Rs 5,576 Mn (2021: Rs 4,550 Mn). and social management
on growing the Non-Conventional policy to complement the
Renewable Energy (NCRE) portfolio Credit Policy of the Bank.
and also promote investment in Ì Continued to prioritise the
rooftop solar generation at financing of renewables.
residential level.
Ì Align with the CBSL
Long Term Pursue partnerships to create Formed a partnership with the Directions on Sustainable
sustainable, industry leading National Cleaner Production Centre Finance Activities of Licensed
solutions to issues such as climate of Sri Lanka (NCPC, Sri Lanka) to Banks.
change, waste, water, biodiversity explore appropriate solutions to Ì Invest in climate action
and energy management. promote resource efficiency and projects, with special focus
cleaner production. on marine ecosystem and
biodiversity.
Business Outcomes
Energy Savings from Solar Power

Generation through Branches Carbon Footprint - Total GHG Emission NCRE Financing - New Loans
kWh 000 tCO2e Rs Bn
350 12,000
300 10,000 2022 5.6
250
8,000
2021 4.5
200
6,000
150
4,000 2020 1.4
100
2,000
2019 11,057
2022 11,645
50
2020 9,138
2021 9,263
2019 181.9
2020 251.9
2021 340.7
2022 348.8
2019 2.7
0 0
0 2 4 6 8

GRI 302-3
Business Outcomes
Electricity Consumption per Employee
per Annum (Head Office)
kWh
Independently verified GHG Inventory In-house ESMS 2022 2,122

Report in accordance with ISO 14064-1:2018 Implementation Committee
2021 2,506
3,286 15,367 2020 2,678
Participants for training and 2019 2,667

capacity building programmes Trees planted through
environmental CSR 0 750 1,500 2,250 3,000
on Environmental Due-diligence,
Protection and Conservation programmes
Financial Capital Manufactured Capital Intellectual Capital Social and Relationship

Capital
Higher market share in the Provides the opportunity to Enhances Sampath Investing in environmental
green financing area will introduce innovative solutions Bank’s reputation as a projects helps to protect
help to drive revenue and to update/replace traditional bank that prioritises the wellbeing of people
profit targets. banking models. sustainable operations. and communities over the
long term.
Target 2.1: Universal access to safe and nutritious food. Target 13.3: Build knowledge and capacity to meet climate change.
Target 6.6: Protect and restore water-related ecosystems. Target 14.2: Protect and restore ecosystems.
Target 7.2: Increase global percentage of renewable energy. Target 14.5: Conserve coastal and marine areas.
Target 7.A: Promote access, technology and investments in clean Target 15.1: Conserve and restore terrestrial and freshwater
energy. ecosystems.
Target 8.9: Promote beneficial and sustainable tourism. Target 15.2: End deforestation and restore degraded forests.
Target 11.6: Reduce the environmental impacts of cities. Target 15.4: Ensure conservation of mountain ecosystems.
Target 12.2: Sustainable management and use of natural resources. Target 15.5: Protect biodiversity and natural habitats.
Target 12.5: Substantially reduce waste generation. Target 15.A: Increase financial resources to conserve and
Target 12.6: Encourage companies to adopt sustainable practices sustainably use ecosystem and biodiversity.
and sustainability reporting. Target 17.6: Knowledge sharing and cooperation for access to
Target 12.8: Promote universal understanding of sustainable science, technology and innovation.
lifestyles. Target 17.17: Encourage effective partnerships.

NATURAL CAPITAL
Since its inception, Sampath Bank has made a firm commitment to do its part towards � Significant investment towards
protecting the environment. Although as a service organisation, the business of banking environmental protection, reforestation
has a minimal impact on the environment, Sampath Bank has evolved beyond this and biodiversity conservation.
conventional ideology to consider Environmental Protection and Conservation to be a
material topic in its strategic sustainability framework. In this way, the Bank strives to Ongoing improvements to the ESMS has
manage the environmental and social risks associated with its own operations, while at over the years enabled the Bank to further
the same time, supporting customers and other stakeholders also to work towards streamline its activities to achieve the
reducing their own environmental footprint over time. above objectives. In 2022, the Bank took a
major step forward to benchmark the
Our Approach Towards Environmental Sustainability ESMS against the latest best practices, by
appointing a professional consultancy firm
to ascertain the efficacy of the existing
ESMS and suggest improvements in line
Resource Environmental
with the Green Financing Taxonomy of
Management CSR
CBSL and IFC performance standards.
and Best Environmental
Practices and Social Resource Management and Best
Management Practices
System (ESMS)
The Bank has always considered resource
efficiency to be a key enabler that facilitates
Green Products sustainable growth through the efficient
Responsible and Services use of resources. The efficient use of
Lending and Paperless resources brings multiple benefits - it
Operations lowers the Bank’s environmental footprint,
generates cost savings that provide a
distinct competitive edge while also
helping to address the wider challenges
Environmental and Social � Adherence to international best risk arising as a result of climate change.
Management System (ESMS) management practices when
Sampath Bank has a robust ESMS to financing, in turn significantly The Bank prioritises six actionable areas
support efforts to conduct its business in reducing the Bank's environmental for resource efficiency:
an environmental-friendly and socially and social risks.
responsible manner. The ESMS is designed
to effectively manage the environmental In seeking to achieve these objectives, the
and social risks associated with the Bank’s ESMS is framed by the following principles: Energy Management
own operations while also focusing on � Conditional credit granting based on
sustainable lending to encourage whether the project/activity is in Waste Management
customers to prioritise green ethics. The compliance with the applicable
main objectives of the ESMS are: environmental and social standards Water Management
� To enhance the Bank’s understanding set by country regulators such as the

Central Environmental Authority GHG Management
of environmental and social risks
associated with its operations. (CEA) of Sri Lanka.
Awareness and Training
� To promote improved environmental � High priority for financing on
and social risk management of client renewable and clean energy projects. Strategic Partnerships
companies. � Adoption of best practices on
environmental and social due
diligence.

Promote Green Building Concepts � Installation of Capacitor Banks for the

power factor correction at the Head
Ongoing modifications to the Head Office
Sampath Bank
Office.
building:
� Installation of EMS (Energy Monitoring
strives to
� Commissioning the 'Smart Technology
Magnetic Bearing Chiller' to replace System) to monitor energy and water
demonstrate the package type air-conditioning unit. consumption of each floor (ongoing).
leadership in
� Controlling and monitoring of � Connecting office area lighting systems
Mechanical Ventilation and Air to BMS system and preparing a
achieving energy Conditioning (MVAC) system through

the Building Management System
schedule through the BMS to operate
automatically (ongoing).
efficiency through (BMS) to operate in efficient and
� Demand control ventilation system
the early adoption
effective manner (ongoing).
has been established to control fresh
� Established a mechanism for air requirement according to the CO2
of global best monitoring, controlling and level of the entire building.
practices.
sequencing of equipment according
� Operating the central air conditioning
to the demand, in order to minimise
system at the maximum efficient point
the electricity consumption.
in the day time and during the part
� Installation of a double-glazed facade load condition, demand will be
Energy Management
with infrared colour absorption in provided through the separate system
Energy consumed in the day-to-day building fittings to limit the (VRF, inverter type split A/Cs) for the
operations for lighting and cooling transmission of heat. Thus, conserving required locations.
purposes, is the largest contributor to electricity and power.
Sampath Bank’s Carbon Footprint.
� Demolition of walls in the existing
Therefore managing energy consumption
floors and provide natural light for the
remains a top priority in the Bank’s
office area through the glass facade to
resource efficiency programme. Key
minimise electricity consumption
energy conservation initiatives undertaken
(ongoing).
by the Bank over the years include:
� Installation of motion sensors in
� Installation of inverter type A/Cs in
lavatory wash basins to minimise the
branches instead of conventional type
use of water and energy.
A/Cs.
� Installation of environmental-friendly
� Installation of reflective glass panels Surface Mount Diode (SMD) for
for branch exteriors to minimise heat illumination. 'Smart Technology Magnetic Bearing Chiller' placed at
transfer and improve the day light
the Bank's Head Office
integration to the building.
� LED lighting solutions by replacing

conventional lighting for branches.
� Changing all internal paint from dark

colour to white colour in branches
and Head Office to save light energy.
� Removing all blinds to prevent

blocking natural lights in branches to
increase the reflection in order to
reduce the lighting energy
consumption.
Before refurbishing the Bank's Head Office Newly refurbished Bank's Head Office in line with
green building concept

NATURAL CAPITAL
Solar Migration Project Architecture Designs Used to Reduce the

The Bank invested Rs 27 Mn in rooftop solar decks at Attidiya, Wattala, Matara Super, Impact of Natural Disasters on Building
Gampaha Super and Galle Super, Bank owned buildings (branches) during the year and
altogether 13 branches are equipped with rooftop solar decks. The Bank contributes to All architectural and structural
generate 348,775 kWh of clean energy during the year to meet energy requirement.
1 designs comply with the
guidelines provided by the
Solar Power Generation at Branches 2022 National Building Research
Organisation (NBRO).
Branch System Capacity (kW) Saving (kWh)
All architectural and structural
Colombo Super 35.0 38,383.64
constructions comply with the
Kalutara 32.0 40,755.48
Negombo Super British Standards: Code of
42.2 58,799.27
Narahenpita
Wellawatte Super
28.0
30.5
41,619.05
41,252.73
2 Practice on NNW Accessible
Buildings (wind calculations, geo
Piliyandala 39.4 50,634.50 technical investigations, seismic
Tissamaharama 20.0 27,142.91 zone C).
Anuradhapura Super 36.5 42,843.27
Attidiya 33.8 7,344.00 Appointment of a Project
Wattala 46.0 Consultant Group, with qualified
Matara Super 32.0 CEB commissioning
3
engineers and architects to
Gampaha Super 22.5 is in progress ensure guidelines and building
Galle Super 39.5
codes of practices in the
construction industry are met.
Total Capacity of
437.55 kW Lightning Protection System for
Solar Power to the National Energy 4 the Head Office and Branch
network.
Requirement including Newly
Added Projects in 2022
Surge Protection Systems to
5 protect equipment of the

GRI 302-1,2,4 Progress review meeting of the working committee on
energy management and waste management
Energy Consumption for the Year 2022 building.
Energy Consumption
Sources: Renewable and Non-Renewable
Fire Protection and Detection
6
Electricity Heating Cooling Steam Solar Power Systems.
Consumption 3,006,799 kWh No No No No

(Head Office)
Sold No No No No No
Reductions/ - - - - 348,775 kWh
Savings
Using any standards/methodology and assumptions used : No

Using any conversion rates : No
Energy used outside of the organisation : No
Best Practices
To demonstrate its willingness to benchmark global best practices for environmental
management, a specialist Energy Manager was appointed in 2022 to review the existing
practices and implement effective energy management strategies within the Head Office
Social media campaign on energy saving
and all 229 branches.

Waste Management
Waste, in particular paper waste generated during the daily business operations have
increased significantly in tandem with the growth in the Bank’s operations. Waste
management efforts have therefore become a key imperative in recent years, which has
Slipless Banking App,
led the Bank to accelerate its recycling programme and also expand its portfolio of digital WePay and Touchless
solutions to reduce the volume of paper consumed on a daily basis. Some of the most
notable innovative digital solutions introduced by the Bank such as the Slipless Banking Cash Withdrawals
App, WePay and the latest groundbreaking Touchless Cash Withdrawals from ATMs have
resulted in a consistent reduction in paper usage at branches. Moreover, the Bank has
from ATMs have
also made a concerted effort to systematically digitise and automate a significant portion resulted in a
of its backend processes (Refer pages 20 to 23 and 92 to 93 for Digital Products and
Process Automation Initiatives). These too have been responsible for a significant consistent reduction
reduction in average annual paper usage and thereby contributing towards minimising
Sampath Bank’s Carbon Footprint.
in paper usage.
Digital Trees Saved through

Waste
Savings From Recycling Paper Waste
Paper Products
No.
1,000
Paper Recycling Slipless Banking and
Cash Deposit Machines
800
649 Trees 536 Trees
600
Oil 67,013 Litres Oil 55,361 Litres
400
Electricity 152,736 kWh Electricity 126,180 kWh
200
2019 899
2020 885
2021 871
2022 649
Water 1,213,488 Litres Water 1,002,500 Litres
0
Landfill 115 m3 Landfill 95 m3
Reduce GHG emission by Reduce GHG emission by Water Management

38,184 kg of carbon equivalent 31,545 kg of carbon equivalent
Water usage at Sampath Bank is primarily
Note: Figures confirmed by Neptune Papers (Pvt) Limited. for utility and sanitation purposes of the
staff and is extracted from municipal water
lines. Since such used water is free of any
In 2022, the Bank commissioned the harmful substances or contaminants, all
National Cleaner Production Centre of water is thus released back to the
Sri Lanka (NCPC, Sri Lanka) to conduct an municipal sewage lines.
Eco Office Audit and Waste Audit at the
Head Office to identify waste sources and Water Discharged (Head Office)
to measure volume of waste generated 2022 2021
under each key category. The data
collected from the Waste Audit will be Water 33,040 m3 27,545 m3
used as the basis for determining the discharged
effectiveness of the waste management Water source: National Water Supply
strategies currently in place, and to identify and Drainage Board
the need for new approaches. Conducting a stakeholder meeting on Eco Office Audit
and Waste Audit

NATURAL CAPITAL
GHG Management
Since first embarking on its carbon footprint management strategy in 2013, Sampath
Bank has continued to report on its Greenhouse Gas (GHG) emissions through the annual
GHG Inventory report covering the Head Office and all 229 Branches. Over the years, the
findings of the report have proven to be invaluable in reorienting certain operational
aspects in order to improve the Bank’s GHG performance over time.
GHG Calculation GRI 305-1,2,3,4,5,7
The GHG calculation for 2022 was conducted by RR Associates (Pvt) Limited in accordance
with ISO 14064-1:2018.
Certificate of GHG verification
Carbon Footprint Calculation With the motive of reducing Scope 3

emission arising from staff commuting, the
Assessment Type : Organisational Greenhouse Gas Assessment Bank initiated two major campaigns in
Applied Standards : ISO 14064 - 1:2018 2022 – “Walk For Wellness to Sigiriya”, a
virtual walk competition and the “Cycle to
Fifth assessment report (AR5) of IPCC, 2019 refinement
Work” initiative.
The Greenhouse : A Corporate Accounting and Reporting Standard
Gas Protocol (revised edition), WRI/WBCSD
Reporting Period : 01.01.2022 - 31.12.2022
Base Year : 2022
Scope GHG Emissions (tCO2e) in 2022

Total CO2 N2O CH4
Emissions
Direct GHG Emissions (Scope 1) 1,321 1,317 3 1

Indirect GHG Emissions (Scope 2) 7,924 7,924 - - Internal communication on “Virtual Walk Competition”
Other Indirect GHG Emissions (Scope 3) 2,400 2,383 13 4 - Employees to reduce their own carbon footprint
Total GHG Emissions 11,645 11,624 16 5
GHG Emission per Employee 2.9
2022 2021 Change

Total GHG Emissions (tCO2e) 11,645 9,263 2,382
Note: Figures confirmed by RR Associates (Pvt) Limited.
GHG Verification
For the first time since beginning the GHG calculation process, the Bank sought the
services of B-Advancy Lanka Certification (Pvt) Limited to obtain independent assurance
to reaffirm that the 2022 GHG Inventory Report is in alignment with ISO 14064-1:2018.
This marks the first step in the Bank’s journey towards achieving the net zero certification. “Cycle to Work” initiative

Sampath Bank’s Approach to Net Zero
As a starting point to understand how best

to proceed with implementing these
principles, the Bank engaged with the Compensate
National Cleaner Production Centre of Offset unavoidable
Sri Lanka (NCPC, Sri Lanka) to explore emissions through
appropriate solutions to promote resource environmental
efficiency and cleaner production. projects
Eliminate
Substitute
Strategic decisions
to consider Key
Adopt low carbon
options to Principles
alternatives
eliminate carbon
emissions and
avoid carbon
intensive activities
Reduce
Use resources
efficiently to lower
our carbon intensity
Webinar on “Tips for Effective Management of Waste,

Water and Energy”
Awareness and Training

Raising awareness among Team Sampath
to help them understand how they can
contribute towards combating climate
change through their day-to-day actions, is
an important part of the Bank’s overall
approach to environmental protection and
conservation. All employees are
encouraged to adopt Sampath Bank
Environment Pledge, while regular training
on specific topics to help disseminate
information and solutions that will
ultimately pave the way for a broader
cultural shift in favour of the environment.
Environment Pledge of Sampath Bank

NATURAL CAPITAL
Accordingly, the following trainings and capacity building programmes were held during the year 2022:
Webinar on “Environmental and Social Due Diligence in

Credit Evaluation” conducted by Mr Chamath Abeysinghe,
Senior Environment Officer, Asian Development Bank for
Heads of Credit Departments, Zonal Managers, Regional Webinar on “Climate Change and Carbon Footprint
Managers, Branch Managers and Credit Officers. Management” conducted by Mr Rasitha Niroshan,
Director/Chief Sustainability Officer, Halcyon (Pvt)
Limited and RR Associates (Pvt) Limited for all team
Webinar on “Tips to Save Electricity” conducted by members.
Mr Sanath Kithsiri, Director (Industrial and Services
Sectors), Sri Lanka Sustainable Energy Authority for all
team members. Webinar on “Sustainable Home Gardening” conducted
by Dr Menaka Fernando, Senior Lecturer, Department
of Crop Science, Faculty of Agriculture, University of
Ruhuna for all team members.
Webinar on “Tips for Effective Management of Waste,
Water and Energy” conducted by Mr Samantha
Kumarasena, Chief Executive Officer, National Cleaner
Production Centre for all team members.
Webinar on “Environmental and Social Due Diligence Webinar on “Climate Change and Carbon Footprint Webinar on “Tips to Save Electricity”
in Credit Evaluation” Management”
In addition, the Bank also commenced

“Sampath Sashreeka”, a competition
aimed at inspiring the passion for
gardening. The competition which
was open to all team members was
designed to encourage participants
to grow their daily consumption
requirements, thereby creating a self-
sustaining solution.
Internal communication on “Sampath Sashreeka” Webinar on “Sustainable Home Gardening”

competition - Employees to engage in home
gardening

Strategic Partnerships
Strategic partnerships play an important
role in implementing the Bank’s
sustainable initiatives, be it in furthering
operational targets or contributing
towards the achievement of broader
national environmental goals.
In seeking to achieve operational targets, the

Bank has partnered with Neptune Papers
(Pvt) Limited as the primary recycling partner
for paper waste, while e-waste is disposed of
Ground mounted solar power project at Maho. Ground mounted solar power project at Pallekele, Kandy.
through on going partnerships with Infinity Project capacity: 3 MW Project capacity: 2 MW
Green International (Pvt) Limited and Ceylon
Waste Management (Pvt) Limited. As
Green Finance Taxonomy and Its Readiness
indicated above, the Bank’s GHG
measurement process is supported by Keen to comply with the newly released CBSL Directions on Sustainable Financing
partnerships with RR Associates (Pvt) Limited Activities for Licensed Banks, the Bank took a deep dive to analyse existing
and B-Advancy Lanka Certification (Pvt) systems and processes and their readiness to align with the Directions.
Limited.
Meanwhile, striving to contribute towards Green Products, Services and Paperless Operations
broader national environmental goals, the
In recent years, the Bank has undertaken to move as many of its products and services as
Bank has from time to time pursued
possible to digital platforms while working in parallel to automate internal work streams.
strategic partnerships with national
The main goal here is to bring about a significant reduction in paper usage in the day-to-
environmental bodies, such as Biodiversity
day operations, thereby lowering energy consumption and its related emissions. Some of
Sri Lanka, National Cleaner Production
the notable achievements in this area include:
Centre of Sri Lanka and the Wildlife and
Nature Protection Society of Sri Lanka.
Digital Products Process Automation Initiatives
Responsible Lending � Digitalising the Credit Card and LC application
� Slipless Banking App
Responsible lending to support the processes
development of renewable energy sector � Online customer
� “Vidvan” e-learning management platform
in Sri Lanka has long been a key platform onboarding tool
covering both banking and non-banking areas
that has allowed Sampath Bank to
� e-receipts for Fixed � Internal communication via e-mediums
showcase its commitment to combat
Deposits (e-circulars, e-forms, e-board papers)
climate change. Today, with a broad
portfolio of projects, spanning hydro, solar, � Digital Web Card � e-communication channels in marketing
wind and biomass, Sampath Bank is widely issuance communication
regarded as a leading financier of the
� Cheque Deposit � Sampath Green HR Initiative to digitalise internal
country’s Non-Conventional Renewable
Machines HR processes
Energy (NCRE) sector.
� Tourist Fuel Pass � Sampath Document Approval System (SDAS)
Financing of Renewable Energy
Projects in 2022 � Customer Risk Automation
Number of Capacity Investment � Green PIN implementation with new iCard

system
Projects (MW) (Rs Mn)
� New Call Recording System
Solar
Power 3 13.11 626 � FD advice creation and discontinuation of FD
receipts
Wind
Power 1 15.00 4,950 � Relaxation in passbook issuance
Total 4 28.11 5,576

NATURAL CAPITAL
Green Lending Schemes

In line with its commitment to promote
renewables, the Bank continues to extend
its support to the Sri Lankan Government-
led “Sooryabala Sangramaya” initiative to
promote investment in solar energy at a
residential level. In addition, the Bank also
offers special refinance facilities through
the ADB funded green credit line to
encourage industries to invest in
renewables.
Marketing communication campaign on solar energy
loan scheme
Environmental Special Projects GRI 413-1

We remain committed to combating climate change by promoting projects and activities that contribute to a greener, more sustainable
economy in Sri Lanka.
“A Breath to the Ocean” - Oceanic Eco-system Restoration Programme
“A Breath to the Ocean‘’ signals the first phase of a Oceanic Biodiversity Restoration programme undertaken by Sampath
Bank aimed at protecting marine resources in the waters off the coast of Mirissa. The programme in effect involves
underwater coral farming whereby trained scuba divers would engage in transplanting new coral clusters in the reef
polygons placed on sea bed. The next phase of the project would see marine biologists supervising the reintroduction of
Description native species of fish to help restore biodiversity to its natural state. Regenerating the coral reef and restoring the coral
colonies in this manner will allow its natural inhabitants to survive and thrive. In the spirit of partnership, the Bank has also
invited other environmentally conscious entities to participate in this programme.
� Restore coral and oceanic-eco � Conducted awareness workshops for the

systems in Bandaramulla, Mirissa community in the locality, hoteliers and the
� Restore coral reefs by the coral Bank staff
transplantation method � Conducted a beach clean-up project
� Improve oceanic biodiversity and � Establishment of reef polygons (New concept)
Primary reduce impact on climate � Transplanting live corals
Achievements
Objective � Support eco-tourism and thereby
contribute to the Sri Lankan
economic development
� Commencement of 2nd phase of the � Department of Oceanography and Marine

project at Bandaramulla, Mirissa Geology, Faculty of Fisheries and Marine
� New locations are identified to grow Sciences & Technology, University of Ruhuna
a nursery in Southern coast � Sri Lanka Navy – Southern Naval Command
� Launch Turtle conservation project at � Sri Lanka Coast Guard
Future Plans
Rakawa � Department of Wildlife Conservation
� Launch coral clean-up project � Marine Environment Protection Authority
Partnerships (MEPA)
� Department of Coast Conservation and Coastal
SDGs Served Resource Management
� Fishermen and Hoteliers of Bandaramulla,
Mirissa

Awareness workshop for the community The launching event Coral transplantation in a reef polygon
Life to Our Mangroves Project
Mangroves play a pivotal role in fighting climate change as unique and productive carbon sinks, and by acting as a
protective barrier for human settlements, against heightened natural disasters resulting from increased global
temperatures. Sampath Bank has undertaken to restore a section of degraded forest patches in the Anawilunda
Ramsar Wetland Sanctuary located on the coastal belt between cities of Chilaw and Puttalam in Sri Lanka’s North
Description Western Province. The project which commenced in 2022 will see the Bank working to restore an area of
approximately one hectare over the next five years.
� To enhance resilience and ecosystem services by the identified mangroves

� To demonstrate the value of mangrove restoration as a Nature-based Solution (NbS) to address the impact
of climate change and socio-economic development challenges, building resilience and community readiness
Primary � To showcase the value of partnership building in contributing towards the reduction of Sri Lanka’s climate
Objective change vulnerability
� Preparation of the nursery � Initiate similar projects to restore mangrove

� Constructing main and sub canals in forests
the project site
Achievements Future Plans
� Biodiversity Sri Lanka

� Department of Wildlife Conservation (DWC)
SDGs Served
� International Union for Conservation of Nature
Partnerships (IUCN)
Exchanging the agreement with Biodiversity Sri Lanka Newly developed canal system in the project site Preparation of nursery with the participation of the
community

NATURAL CAPITAL
Biodiversity Conservation Project - Restoration of Halgahawala Forest Reserve
Restoration of Halgahawala Forest Reserve, a 5-year project commenced in 2018 and continues to be a long-term
undertaking operationalised by way of a MOU between Sampath Bank and Biodiversity Sri Lanka. The International Union
for Conservation of Nature and the Forest Department of Sri Lanka continues to provide technical support towards the
Description project.
� Support to restore 10 hectares of degraded � Planting 30,000 endemic plants and

forest land in the Halgahawala forest reserve in restore the forest reserve
Primary Opatha in Galle District
Objective Achievements
� Developing a biodiversity credit accrual system � Initiate similar projects in other parts of the country
on par with international standards which would
enable biodiversity conservation project owners
Future Plans to generate accruable biodiversity carbon credits
� Biodiversity Sri Lanka

� International Union for Conservation of
SDGs Served
Nature (IUCN)
Partnerships � Forest Department of Sri Lanka
Partners field visit Plant nursery Community participation in restoration
“Gasai Mamai Pubudu Pothai” Tree Planting Programme
A programme to provide school children with fruit bearing tree saplings to be planted at their school premises and entrust
them with the responsibility of taking care of the trees over the long-term. When selecting schools for the programme,
priority was given to the schools which are located in the areas where Sampath Bank’s “Wewata Jeewayak” Tank Restoration
Programme was conducted. The programme reiterates Sampath Bank’s belief that entrusting students with the
Description responsibility of planting trees not only strengthens their bond with the environment, but also paves the way for them to
commit to long-term goals.
� Improve the environmental consciousness in � Inculcate their saving habits among the
children younger generation
� Promote cultivation among the younger � To generate an additional income source to
Primary
generation respective schools
Objective
� 115 schools were benefitted � Expand this programme to other areas of the
� 7,517 fruit plants were planted country
� Recognise the best performing Projects
� The Ministry of Education
� Respective Zonal/Regional Education Offices and
SDGs Served schools
Partnerships � The Department of Agriculture

Project at Jaffna Project at Aralaganvila Project at Thalawakele
Project at Dehiattakandiya Project at Bibile Project at Dambana
115 172 7,517

Schools Benefitted Employee Engagement Number of Fruit
Saplings Planted
Success Story
The Siri Samanpura Primary School, in the Eheliyagoda Educational Division (Ratnapura
District) was one of the schools on-boarded to the “Sampath Pasala” CSR programme
inaugurated by the Bank’s Corporate Credit Department in 2015. As part of the CSR
project, the Bank planted 75 Rambutan saplings in the school premises, with students
being given the responsibility to care and nurture their plants to ensure they bear
fruit. Of the 75 saplings planted in 2015, 73 have grown into fruit bearing Rambutan
trees, thus making a positive contribution to the environment and ecosystems in the
area. Further, the income generated from the sale of the Rambutan harvest is used
for school development activities. The success of this initiative is what inspired the
Bank to launch flagship “Gasai Mamai Pubudu Pothai” programme which is now in the
process of being extended as a National level CSR programme by Sampath Bank.
Fruit bearing trees at the Siri Samanpura Primary
School

NATURAL CAPITAL
“Gasai Mamai Pubudu Pothai” Vegetable Gardening Programme
This programme was initiated under the 2nd phase of the “Gasai Mamai Pubudu Pothai” Tree Planting Programme as a
long term measure to promote vegetable gardening concept among school children. Through this initiative the Bank aims
to inspire students to understand the value of consuming fresh produce and take pride in their contribution towards food
Description security.
� Promote cultivation among the younger generation

� Create a source of additional income for the respective schools
Primary � Improve the environmental consciousness among school children

Objective
� 100 schools were benefitted � Expand this programme to other areas of the
� 25,000 school children were benefitted country
� Zonal/Regional education offices and schools in

SDGs Served Colombo and suburbs
Partnerships � The Department of Agriculture
Inaugural event at Zonal Education Office, Piliyandala Ananda Samarakoon Vidyalaya, Piliyandala Daranagama National School, Kelaniya
“10,000 Trees Campaign” in collaboration with the Rotary Club of Colombo
Sampath Bank inaugurated the ‘10,000 Trees Campaign’ in collaboration with the Rotary Club of Colombo at the We Oya
Estate in Yatiyantota, which is part of Kelani Valley Plantations PLC. The programme marks the first step in Sampath Bank’s
long term plan to plant a total of 7,500 trees in a bid to reduce atmospheric carbon dioxide (CO2) and thereby protect the
Description environment and mitigate the effects of climate change.
� To enhance biodiversity in approaching � 7,500 trees were planted at

environmental sustainability Thalawakele Plantation by the Bank
Primary � To provide ecological solutions to address
Objective climate adaption Achievements
� To obtain Carbon Certification which can be � Rotary Club of Colombo

used to offset the Bank’s Carbon Footprint � Hayleys PLC
Future Plans Partnerships
SDGs Served

Handing over sponsorship cheque to the Rotary Club Tree planting at the inaugural event held at Kelani Participants from Sampath Bank, Rotary Club of
of Colombo Valley Plantations Colombo and Kelani Valley Plantations
“Plant a Seed for Tomorrow” - Vegetable seeds distribution programme in collaboration with the Rotary Club of Colombo
A vegetable seeds distribution programme was conducted with the collaboration of the Rotary Club of Colombo where
1,000 seed packets containing different kinds of vegetable seeds were distributed among the Bank’s customers to
promote home gardening concept in Sri Lanka.
Description
� To encourage home gardening among � 1,000 customers and their families

people were benefitted
� Provides the opportunity to make a positive
Primary environmental impact among people
Objective Achievements
� Rotary Club of Colombo
Partnerships
SDGs Served
Inaugural event at the Colombo Super Branch Handing over seed packets to customers at Branch branding of the campaign
Kiribathgoda Super Branch

148
Sampath Bank offers a full gamut of mainstream consumer banking solutions

Consumer from current and savings accounts, and term deposits to loans, leases and
pawning facilities as well as credit and debit cards and bancassurance services
Banking to cater to the banking needs of individuals and small businesses across
Sri Lanka.
Sampath Bank delivers a range of bespoke corporate banking solutions such

Corporate as project financing, special credit facilities, foreign currency facilities and
Banking advisory services to address the diverse needs of Sri Lanka’s corporate sector.
SME Sampath Bank presents tailor-made solutions to promote the advancement of

the local SME sector, which in recent years has been declared the backbone of
Banking the national economy.
Sampath Bank plays a vital role in facilitating the foreign currency requirements
of both corporates and individuals. Working closely with its partner network
Global of global correspondent banks, Sampath Bank serves as a key facilitator to
enable its corporate clientele to engage in International Trade. Also, Sampath
Banking
Bank's Bank Notes Operation contributes towards managing the demand for
currency from the market, and the Remittance Operation is geared to increase
the inflow of foreign currency to the country.
Sampath Bank’s Treasury is responsible for safeguarding the Bank’s liquidity

Treasury and managing the Net Open Position of the Bank and also offers a gamut of
products and services in foreign exchange, money and fixed income markets
to clients.
Operational Support provided by the Sampath Bank’s Network Services

Operational Centre, the Central Cash Department and the Recoveries Department
serve a vital purpose - they create an ecosystem to ensure the Bank’s
Support
ability to maintain uninterrupted services to customers and also safeguard
the continuity of business over time.

MANAGEMENT
DISCUSSION
AND ANALYSIS
Business
Reports
CONSUMER BANKING
standing Sanhinda Senior Citizen free CASA

Deposits
medical benefit scheme continued year Rs Bn %
round with benefits totaling Rs 211 Mn
500 50
Deposit mobilisation activities in 2022 distributed during the course of 2022. 45.7
were largely influenced by the upward 39.3
400 40
movement in policy interest rates from In line with its strategic endeavour to 35.2 32.7
April onwards. Taking a cue from the increase foreign currency inflows, the
300 30
market, the Bank introduced competitive Bank’s FC Prime Accounts were also heavily
rates across all term deposit formats, promoted with the industry-best bonus
200 20
along with a series of flexible tenor options interest and other value additions offered
(100, 200, 300 day deposits) to enable to encourage customers to grow their USD
100 10
customers to reap the benefits of the high balances.
2019 253
2020 349
2021 447
2022 360
interest rates.
0 0
Sampath Bank’s Cash Management
In parallel, an aggressive savings drive was Solutions (CMS) for Corporates also made
launched to boost volumes across all solid progress in 2022. Leveraging the
CASA
savings categories. Some of the notable versatile features, ultra convenient CASA % (RHS)
campaigns were the Ladies 1st campaign
launched in March 2022 offering additional
reward tiers to recognise incremental
growth in the savings balance and the free Tenor-wise Fixed Deposits Mix
LED emergency bulb campaign for the %
general savings initiated in September 3.8 6.2
2022. The Sampath Pubudu Childrens’ 9.5 9.1
13.3 14.4
savings reward mechanism was also 100 days 6 months
5
6.
further enhanced with the addition of gift 4 months 8.7
2.7
vouchers worth up to Rs 50,000 to 6 months
5.9
encourage progressive improvement in 2022 1.6 200 days 2021
the savings balance. Sampath Bank’s long 5.8 7 months
12 months .4 10
40 .5 300 days
Deposit Portfolio 61
.6
12 months
Rs Bn
1,200
1,103
1,000 978 0 - 3 months 13 - 24 months
887 735 4 - 12 months Above 24 months
511
800 718 522
451
600
implementation and cost effective
400 382
294 characteristics of the CMS model, the Bank Way Forward
294
200 217 succeeded in penetrating a range of Going forward, the Bank will look to
sectors, including education, healthcare, consolidate its deposit portfolio as
0 50 71 85 74
insurance, shipping and FMCG to serve economic conditions gradually
2022
2019
2020
2021
both SMEs and corporates attached to improve and pave the way interest
these sectors. rates also to stabilise in due course.
Term Deposits Demand & Other
Saving Deposits Deposits

cash flows and safeguard the continuity of

Leasing
their business in order to enable them to
Rs Bn %
Sampath Bank
meet their debt service obligations. Eligible
40 5
customers were granted the latest 4.7
initiated cohesive
4.4
extension of the CBSL mandated debt
4.2
moratorium to allow them to differ their 30 4
action to support repayment obligations up until end-2022.
distressed customers
The Bank continued with its own relief 3.1
20 3
measures to support affected borrowers,
by helping them with the newly formed specialist Credit

Nursing Unit (CNU) taking the lead in all 10 2
to repair their cash customer rehabilitation efforts. In this
flows and safeguard

capacity, the CNU was also actively involved
2019 32
2020 35
2021 34
2022 29
0 1
in providing credit counselling and
the continuity of their business advisory services to create

opportunities for businesses to reach out
business, enabling to potential investors, obtain seed capital,
Leasing
Leasing as a % of Total Loans (RHS)
them to meet
equity etc., if needed.
their debt service In the meantime, a prudent approach

underscored new lending activities and the Bank’s overall exposure to the leasing
obligations. saw the Bank selectively engaging in and housing loan portfolios. More
collateral-based lending to existing clients stringent internal controls and screening
and that too only to those exhibiting protocols were put in place to govern all
strong resilience against the current new leasing facilities, including additional
challenges. Additional precautionary conditions calling for customers to commit
measures were implemented to manage to a higher contribution. With regard to
Loans and Advances
the housing loan portfolio, the priority was
Housing Loans to mitigate the Bank’s concentration risk to
The tenuous economic climate in the
Rs Bn % the housing and condominium sectors.
country weighed heavily on the
performance and prospects of the lending 60 7
6.2 6.2 6.4 In keeping with the focus on collateral-
business in 2022. Precipitated by the
50 6 based lending, the Bank intensified its
current economic slump and rising cost of 6.0
campaign to promote pawning and gold
funds, general credit appetite remained 40 5 loans. Taking a cue from the market, the
sluggish throughout the year. To add to
advance quanta across all pawning
this, heightened stress triggered by weak 30 4
products were progressively increased to
economic activity and hyper-inflationary
20 3 reflect the rising world gold prices.
conditions raised serious doubts about
borrower repayment capacity. 10 2
2019 44
2020 47
2021 52
2022 55
Considering these tough operating 0 1

conditions, Sampath Bank initiated
cohesive action to support distressed
customers by helping them to repair their Housing Loans
Housing Loans as a % of Total Loans
(RHS)

CONSUMER BANKING
Pawning & Gold Loans Cards

Rs Bn %
80 7.4
8 A strong start to the year where the Credit cards
demand for cards grew exponentially in
the first quarter of 2022, was followed by
becoming the
most sought after
60 6
progressive decline in the credit appetite
4.6 5.4
solution for overseas
from the second quarter onwards as
4.8
40 4 deteriorating socioeconomic conditions,
mounting inflationary pressure and rising
interest rates began eroding disposable
payments, the
Bank stepped in
20 2
incomes. Amidst this backdrop, the Bank
to accommodate
adopted a conservative approach to curtail
2019 33
2020 37
2021 44
2022 68
0 0 credit card issuance in order to minimise

the vulnerability of the card portfolio to
economic shocks.
customer requests
Pawning & Gold Loans
Pawning & Gold Loans as a % of Total
on a case by case
Working instead to support customers in
Loans (RHS)
these difficult times, the Bank took action basis to facilitate
on multiple levels. The CBSL Circular No. 2
of 2022 announcing the suspension of all
their foreign currency
Way Forward
recovery action was promptly payments for
implemented. The Bank further extended
The prospects for the year ahead its own relief measures by offering education, medical
will depend on a number of key
developments expected to
customers structured solutions, including
special concessionary rates and staggered
and other necessities.
materialise over the next few payment plans.
months, among them the IMF staff In a key development to enhance the
level agreement and the Meanwhile, seeing customers struggling to capability of its merchant network,
government revenue consolidation cope with the rapid rise in inflation, special Sampath Bank leveraged its longstanding
measures that would signal greater promotional offers on essential items partnership with Paycorp International
economic stability. Stemming from remained in place throughout the year. A (Private) Limited to become the first local
this, it is predicted that market new partnership with Keells Supermarkets bank to enable local businesses to
lending rates too will gradually saw the introduction of real time rewards automatically generate dynamic merchant
become more competitive, thus points redemption at Keells Supermarkets LankaQR codes through the Sampath
paving the way for robust credit for the first time in Sri Lanka. This allows Bank Payment Gateway without any
appetite from the private sector. Sampath Credit Cardholders to redeem technical integration required by the
Leveraging this conducive their accumulated UltraRewards and merchant. This innovation, which was
environment, Sampath Bank will Ultramiles rewards points against day-to- launched in January 2022, allows
look to simultaneously grow the day expenses. businesses to benefit from near real-time
loan book and improve credit payment and settlement capability from all
quality by mobilising credit flows Moreover, with credit cards becoming the
LankaQR enabled apps and digital wallets
towards particularly fast growing most sought after solution for overseas
at much lower transaction costs than
sectors such as manufacturing and payments, the Bank stepped in to
traditional credit card payment methods.
exports. accommodate customer requests on a
Further strengthening its commercial ties
case by case basis to facilitate their foreign
with Paycorp International (Private)
currency payments for education, medical
Limited, the Bank achieved another first in
and other necessities.
April 2022 by becoming the first Sri Lankan
bank to facilitate e-commerce transactions

via UnionPay International ™ (UPI) backed

Bancassurance
by its latest 3DS 2.0 fraud protection
Relationships with
software. This new payment technology
enables secure payment processing, The year proved to be a challenging one
payment gateway, and payment
aggregator services with direct connectivity
for the Bancassurance operation. Given its
dependence on the Bank’s vehicle leasing
all major insurance
to UPI, thus becoming the backbone of the business, the dual impact of the ongoing partners were also
further strengthened
Bank’s transactional infrastructure, while restriction on vehicle imports and the
protecting businesses and consumers Bank’s own decision to curtail lending
from fraud. These initiatives also reflect
Sampath Bank’s continued efforts to
owing to the economic uncertainty
continued to affect the ability to canvass
to ensure customers
accelerate the pace of acceptance, new business volumes. Consequently, continue to benefit
from competitive
adoption, and integration of innovative customer retention was seen as the main
digital payment solutions in line with the priority for the Bancassurance operation
government and the Central Bank of
Sri Lanka’s efforts to implement new
in 2022.
rates.
technologies to streamline the payments As part of the customer retention strategy,
and settlements infrastructure. the Insurance Loan facility was extended
to a larger customer base. Under the
Insurance Loan facility, eligible customers
were offered a deferred payment plan to
enable them to stagger the settlement of
Way Forward
their premiums, while continuing to enjoy
The prudent approach adopted in
the complete range of benefits typically
2022 will likely continue to influence
offered only for fully paid up insurance
the card issuance strategy in the
policies.
near term. However, with solid
evidence pointing to the growing Relationships with all major insurance
customer propensity for partners were also further strengthened
e-commerce, the Bank will pursue to ensure customers continue to benefit
an integrated strategy to prioritise from competitive rates. Nonetheless,
merchant acquisitions across owing to a spate of disposals caused by
multiple digital platforms. the high vehicle market prices, overall
retention rates for 2022 showed a decline
compared to the previous year.

CORPORATE BANKING
Sampath Bank for its part pressed ahead Sector-wise Loan Portfolio
with broad-based efforts to support - Corporate Credit
Sampath Bank for its

corporate customers to confront these
Sector 2022 2021
challenges by providing tailor made
part pressed ahead

Others 1% 1%
solutions based on their cash flows while
helping to grow the potential sectors. Transportation & Storage 1% 2%
with broad based Importers who represent nearly 34% of Consumption 1% 2%
efforts to support
the Bank’s corporate loan portfolio were
Infrastructure 1% 2%
among the worst hit by the foreign Development
corporate customers currency shortfall in the country. Taking a

systematic approach to assist these
IT & Communication
Services
2% 1%
to confront challenges customers, the Bank moved to allocate Professional, Scientific &
Technical Activities
2% 2%
by providing tailor
foreign currency on a priority basis to
Health Care 2% 3%
support importers of essential items such
made solutions based as agriculture

pharmaceuticals.
inputs,
Special
food and
structured
Agriculture 8% 10%
on their cash flows

Construction 11% 12%
solutions were offered to these importers
while helping to grow

of essential items including allowing them Financial Services 11% 14%
to benefit from extended settlement Tourism 16% 13%
the potential sectors. terms. Corporate companies were

encouraged to expand to local Manufacturing 21% 14%
manufacturing by providing special credit Traders 23% 24%
Corporate Credit facilities, to minimise the imports. These 2022 2021

flexible and customer-centric approaches
were also responsible for driving new
The challenges emanating from the throughout the pandemic period and
customer acquisition especially in
economic crisis, fuel and energy shortages continue to remain at the forefront of
attracting top rated local conglomerates
and the Forex liquidity crunch affected economic growth in the current
as well as locally-based multi-national
corporates at various levels albeit for contentious environment.
companies.
some, more severely than others.
Especially for those who had borne the Equally importantly, the Bank continued to
brunt of the economic fallout from the assist customers operating in risk elevated Way Forward
COVID-19 pandemic, these new challenges industries such as tourism and With ongoing challenges set to
signalled continued stress for a construction sectors through special rate continue for some time to come,
foreseeable future. concessions, extended payment plans and managing portfolio exposures will be
other relief measures along with the the key priority for the Bank in future.
government-led debt moratorium. A In this context, the overall lending
Loan Portfolio - Corporate Credit
strategic decision was also made to curtail approach for the next year will be on
Rs Bn
new lending to these sectors in a bid to selected sectors who are resilient
manage sector concentration risks and under current market conditions.
2022 247 strengthen portfolio quality. Equally importantly, the Bank will
continue to empower existing clients
224 As part of its overall portfolio de-risking by presenting them with bespoke
2021
strategy, the Bank paced its lending solutions to grow and sustain their
activities to leverage the robust expansion businesses. Further, it is hoped that
2020 216 of the export sector, in particular to the implementation of the IMF bailout
increase the coverage to the agri-export plan in due course will be a stimuli
2019 191 and export manufacturing industries that needed to kick start economic activity
have shown consistent staying power and improve investor confidence, in
0 50 100 150 200 250 turn leading to a more conducive
environment for the resumption of
more broad-based lending.

Corporate Finance
Given the economic stress and the burden By realigning its lending strategies to
of high interest rates, the Bank consciously
curtailed lending to most sectors, including
target key systemically important sectors
the renewable energy sector. While of the economy, the Bank succeeded in
sustaining the momentum of its Corporate
admittedly the renewable energy sector
has long been the mainstay of Sampath
Bank’s Corporate Finance Department, the
Bank has supported new exposures to
Finance lending book even amidst adverse
renewable energy sector on a selective economic conditions in 2022.
basis.
Nonetheless, by realigning its lending

strategies to target key systemically Sector-wise Loan Portfolio
- Corporate Finance
important sectors of the economy, the Way Forward
Sector 2022 2021
Bank succeeded in sustaining the In the near term, the Bank will
Margin Trading & Custodian 1% 2%
momentum of its Corporate Finance continue to apply its conservative
Renewable Energy 22% 16%
lending book even amidst adverse approach towards new lending with
economic conditions in 2022. Interestingly, a strong focus on supporting
the Corporate Finance portfolio recorded fundamentally strong corporates in
a growth compared to the previous year, Infrastructure 31% 32% systemically important sectors of
supported by a solid improvement in new Development
the economy. Moreover, with
volumes. The local financial sector was the current indications suggesting that
main growth driver, accounting for the the renewable energy sector is also
majority of the volumes recorded during well on its way towards a
the period. Financial Sector 46% 50% turnaround, renewed interest in
investments in the sector and
Loan & Investment Portfolio consequently the Bank expects
- Corporate Finance
some very viable financing
Rs Bn
opportunities to materialise in
120
2023. The Bank will also look to
100 harness the resurgence of equity
market activity expected alongside
80 the finalisation of IMF programme.
60 2022 2021
40
Both margin trading activities and
20 custodian services, which gained traction
2022 104
at the start of the year driven by the equity

2019 93
2020 87
2021 98
0
market rebound in the first quarter,
gradually dissipated thereafter following
the economic turmoil in the country.

CORPORATE BANKING
Foreign Currency Banking Unit Sector-wise Loan Portfolio - FCBU
The foreign currency liquidity shortage in

Sector 2022 2021
With the ability
to grant new
Construction 2% 3%
the market was the main underlying factor
that had an impact on Sampath Bank’s
Foreign Currency Banking Unit (FCBU)
Tourism 3% 3%
facilities severely
hampered due to
operation. The situation was further
exacerbated by the prevailing regulatory
directive on the mandatory conversion of
surplus export proceeds to local currency
Others 4% 1% the lack of adequate
as well as the ruling preventing banks from dollar liquidity,
the focus turned
mobilising foreign currency deposits from
Agriculture 6% 22%
exporters.
With the ability to grant new facilities

towards portfolio
severely hampered due to the lack of Lending to Overseas
Entities
37% 38%
consolidation with
adequate dollar liquidity, the focus turned
towards portfolio consolidation with all all efforts centered
efforts centred on helping existing FCBU
clients to manage their ongoing facilities
Manufacturing 48% 33%
on helping existing
through various credit rehabilitation FCBU clients to
solutions including restructuring/
manage their
2022 2021
reschedulement plans and other relief
measures.
ongoing facilities
As a value added service, the Bank also Way Forward
through various
actively engaged in promoting its cash Needless to say the coming months
management solutions to help clients to would remain challenging for the credit rehabilitation
streamline their routine transactional
systems and improve their cash flows
FCBU, as the economic downturn is
likely to continue for the foreseeable
solutions including
wherever possible. future. However, with the proposed restructuring/
IMF negotiations expected to yield
Loan Portfolio - FCBU positive economic outcomes and reschedulement
USD Mn augment foreign currency to flow to
the country, the Bank will aim to
plans and other relief
2022 310
strategically boost its foreign measures.
currency liquidity position in order
to allow the FCBU to recommence
2021 322 lending over the medium term.
2020 341
2019 329
0 100 200 300 400

SME BANKING
Sector-wise SME Loan Portfolio

%
The Bank’s own

2 2 2 2
2 2
Sampath Saviya
3 4
5 5 27
credit line was kept

6 28
7
open for conditional 8 2022

10
2021
lending to encourage 9
6
investment in 18 20
selected sectors such

15
17
as renewable energy, Traders Others

Manufacturing Infrastructure Development
modern agriculture, Construction
Consumption
Transportation
IT & Communication Services
information Tourism
Agriculture
Health Care
technology,
e-commerce and
education.
The SME sector remained under severe refinance schemes, including ADB
stress throughout 2022, being the worst sponsored COVID-19 Emergency
Way Forward
affected by the adverse economic Response Scheme, ADB Tea Smallholder
conditions and regulatory restrictions on and JFPR Grant Scheme, ADB SME The focus for the immediate future
top of mounting inflationary pressures Component and We-Fi Grant Scheme, would be to continue assisting
and rising interest rates. SMILE III Revolving Loan, E-Friends II customers to reorient to the
Revolving Loan, Saubagya Prosperity Loan ongoing challenges, while
Seeing the day-to-day operational Scheme, Kapruka Ayojana Loan Scheme strengthening their defenses
struggles faced by many SMEs, the Bank and the NCRCS (Sarusara) Scheme. against future economic headwinds.
broadened its advisory services to assist Over the longer term, it is hoped
existing customers in their cash flow While a strategic decision to curtail broad- that the SME sector will make a
management efforts. Customer cash flows based lending remained in play throughout sustained recovery and reclaim its
were scrutinised and tailor-made solutions 2022, the Bank’s own Sampath Saviya position as the backbone of the
including payment moratoriums, credit line was kept open for conditional Sri Lankan economy, thus paving
restructuring and reschedulement lending to encourage investment in the way for Sampath Bank to
facilities offered on a case by case basis. selected sectors such as renewable capitalise on opportunities for
energy, modern agriculture, information credit expansion.
The Bank also continued to offer financial technology, e-commerce and education.
assistance to customers through various ADB funded credit lines too were used to
mobilise investments into these sectors.

GLOBAL BANKING
prevailing adverse macroeconomic

International Trade LC Volume
environment in Sri Lanka, which caused
Rs Bn
Indian exporters to demand a mandatory
250
As unprecedented challenges including bank guarantee from a reputed Indian
the foreign currency liquidity crisis and Bank for the LCs issued by banks in
200
Sri Lanka’s sovereign rating downgrade Sri Lanka. However, obtaining such
saw local corporates bracing for the confirmations from Banks in India proved
150
inevitable repercussions on the country’s to be challenging for Sri Lankan banks in
trading credentials, Sampath Bank moved the current context, especially given the
100
quickly to assist customers in maintaining high fee involvement for such approvals.
their transactional capability and assuring
50
business continuity for these Furthermore, the Bank continued to work
2019 100
2020 120
2021 200
2022 107
organisations. purposefully to fuel the expansion of the
0
country’s export sector. For exporters
In an effort to assist importers who were who, due to a regulatory directive were
handicapped by the foreign currency unable to access their export proceeds for
crisis, the Bank prioritised the allocation of working capital requirements, were
its available foreign currency to support granted a special LKR denominated
importers of essential food, pre-shipment facility to enable them to The Sampath Vishwa Corporate facility too
pharmaceuticals and agri inputs. Beyond meet their needs. The Bank also set up its was further enhanced with the inclusion of
this, the Bank also undertook settlement own internal advisory team to offer the automated DC (Documentary Credit)
negotiations on behalf of its import trade specialist advice to exporters, especially module and automated TT (Telegraphic
customers by reaching out to its network SMEs and start-ups to help them improve Transfer) module. These new modules
of global correspondent banks and often their business fundamentals to better have helped to expedite processing of LCs
even initiating new relationships with respond to market cues. Taking its advisory and both outward and inward TTs, leading
other overseas banks. In addition, services to the next level, the Bank entered to a significant improvement in customer
following the implementation of the into a Memorandum of Understanding service delivery outcomes.
USD 1 Bn import credit line by the Indian (MOU) with Sri Lanka’s National Chamber
Government in March 2022, Sampath of Exporters (NCE), to form a strategic
Bank moved quickly to assist local partnership with the NCE, to improve Way Forward
importers to import from India without visibility of Sri Lankan exports in global
With the foreign currency liquidity
any USD involvement. While adding a markets.
shortage likely to remain a headline
considerable boost to the Bank’s import
event for some time to come, the
transaction volumes, these efforts also
Inward & Outward TT Volumes Bank will focus on strengthening its
helped to manage the foreign currency
Rs Bn dollar liquidity position to be able to
scarcity to some extent.
1,000 offer trade facilitation solutions for
the continuity of import and export
Meanwhile, leveraging its longstanding
800 trade to and from Sri Lanka.
reputation and integrity, Sampath Bank
became the first local bank to secure a
600 Bank Notes Operation
Trade Assistance Programme (TAP) from
the Indian Exim Bank. Under this facility,
400
Exim Bank has in principle agreed to offer
100% coverage for the LCs (Letters of As was the case across the industry,
200
Credit) issued by Sampath Bank. The key Sampath Bank’s Bank Notes Operation
247
327
139
366
209
859
462
158
objective of the TAP arrangement was to (BNO) also continued to be affected by the
0
facilitate the confirmation of LCs issued by shortage of foreign currency in 2022.
2022
2019
2020
2021
Sampath Bank in relation to trade Although it was thought that easing of

transactions carried out between pandemic related travel restrictions would
Inward
Sri Lankan importers and Indian exporters. trigger Sri Lanka’s tourism sector boom,
Outward
This became necessary due to the the country’s economic woes further

dampened tourist arrivals which left the As specified by the “Incentive Scheme on
Remittance
country facing a shortage of foreign Inward Workers’ Remittances”, for
currency in the domestic market for the remittances received to Rupee accounts
third consecutive year. While a marginal With Sri Lanka as whole experiencing via licensed banks and other formal
improvement was observed in foreign lower inward remittance volumes on the channels, the Bank proceeded to
currency circulation in the market following back of exchange rate volatility and reimburse the transaction cost borne by
the relaxation of the CBSL’s exchange economic uncertainty, Sampath Bank Sri Lankan migrant workers through the
control regime in March 2022, the dearth redoubled efforts to attract worker payment of Rs 1,000/- for all remittances
in foreign currency was a critical issue that remittances and draw in higher volumes of above Rs 20,000/-.
persisted throughout the year. foreign currency into the country through
formal channels. Reiterating its commitment towards the
In light of these challenging circumstances, national initiative to raise awareness
the BNO adopted a proactive approach to Seeking to create a standout product that among both remitters and beneficiaries,
support its customers. Early action was is distinctly different from the generic the Bank undertook to promote the
taken to source foreign currency from solutions available in the market, the Bank RemitWise App. First unveiled to the public
alternative channels in anticipation of worked with its network of global Fintech in December 2021 to provide details
heightened demand during peak travel partners to position “Sampath regarding the Sampath Bank’s overseas
periods. Preemptive strategies of this e-Remittance” as the most convenient, fast BPO network, current exchange and
nature coupled with a systematic and cost effective solution for Sri Lankans deposit rates, location of remittance
management of currency flows, allowed living overseas to remit money to the agents etc., the RemitWise App was
the BNO to support customers’ foreign country safely and legally. Leveraging the further upgraded in 2022 with the
currency requirements for the purpose of strong global presence of its Fintech inclusion of the end-to-end traceability
outbound travel. partners, a series of targeted digital function to enable users to track their
marketing campaigns were initiated to e-Remittance transactions in real time.
Sampath Bank also further cemented its raise awareness among remitters both in Additionally a chat option has been
position as the preferred foreign exchange captive markets as well as in untapped included in RemitWise App as a value
partner in turn enabling the Bank to corridors in the EU and among APEC added feature for the migrant community
reconfirm its status as #1 foreign currency nations, particularly across the Americas’ to interact with the Bank.
repatriator in Sri Lanka. These efforts and the far east region.
combined with stringent ongoing cost The Bank’s participation was seen in many
containment measures saw the BNO Strengthening traditional remittance of the routine awareness sessions
ending the current financial year on a channels was also seen as a major priority. conducted by the Sri Lanka Bureau of
strong note reporting healthy In this regard, the Bank’s global Business Foreign Employment to inform prospective
improvements across all key performance Promotion Officer (BPO) network was migrant workers of the importance of
metrics. expanded with a new officer deputised in using formal remittance channels.
South Korea.
Proactive efforts to support the

Way Forward Way Forward
government to attract inward remittances
With the economic rebound and to the country saw the Bank complying The national goal to generate
tourism sector revival likely to take with the government mandated “Incentive incremental growth in inward
longer than initially predicted, the Scheme on Inward Workers’ Remittances” remittances will remain the
BNO’s near term action plan will that came into effect from 1st February overarching mandate driving
focus on data analytics to prioritise 2022. Accordingly, beneficiaries receiving Sampath Bank’s Remittance business.
and streamline foreign currency remittances through the ‘Sampath However, given the competitive
allocations to customers, together e-Remittance’ service and converting such pressure in the market, the Bank will
with other technology based proceeds into Sri Lankan Rupees, were explore strategies to develop an
solutions to drive process efficiency incentivised from day one. extensive portfolio of technology-
and control costs. based solutions that combine cost
effectiveness, improved traceability,
and 24-7/365-day customer
convenience.

NOSTRO ACCOUNTS,
CORRESPONDENT BANKS AND
EXCHANGE COMPANIES GRI 2-1
37 Nostro Accounts
609 Correspondent Banks Scan this QR code for a more

comprehensive view of our Nostro
Accounts, Correspondent Banks and
121
Exchange Companies
Exchange Companies www.sampath.lk

TREASURY
The Treasury’s fixed income securities options granted by the CBSL, the Bank However, taking advantage of volatile
portfolio recorded mixed results in 2022. converted a majority of its matured SLDB market conditions, Treasury recorded a
The notable 700 bps upward adjustment portfolio to LKR denominated instruments, robust FX income from market activities.
in policy rates by the CBSL in April 2022 which in turn helped to substantially Furthermore, with the steep depreciation
was the key factor influencing primary reduce impairment provisions made on of LKR over USD, foreign exchange reserve
market activity in the first half of the year. SLDBs. revaluation recorded significant gains over
In the immediate aftermath of this corresponding period.
announcement, interest rates of Treasury Anticipating the forthcoming market
Bills and Treasury Bonds shot up, with the uncertainty, Sampath Bank’s Treasury The BNO (Bank Notes Operation), which
91-day Treasury Bill rate showing a 9% moved quickly to ensure prudent also comes under the purview of the
year-on-year rate increase, while the management of its foreign currency Treasury, recorded robust results in 2022.
182-day and 364-day Treasury Bill rates commitments. In an effort to streamline Despite challenges, the BNO’s exchange
increased by more than 12% over the foreign currency cash flows and strengthen income was at an all-time high. (Please
figures reported in March 2021. Taking the Bank’s Net Open Position (NOP), spot refer pages 158 and 159 for
advantage of the increased demand for and forward sales were curtailed, while comprehensive details regarding the
Government Securities, the Bank managed USD allocations were prioritised to support current year performance of the BNO).
to register substantial capital gains only essential imports. Meanwhile,
through secondary market activities. substantial provisions were made in
Alongside these capital gains however, anticipation of possible haircuts on foreign
some notable Mark-to-Market losses were currency denominated government
also recorded in relation to Treasury Bills securities.
and Treasury Bonds procured during the
low interest rate regime. Amidst this
Government Securities Portfolio
backdrop, the Bank took advantage of the
Rs Bn
one-time reclassification leeway option
allowed by the Institute of Chartered 250
Accountants of Sri Lanka to reclassify a
portion of its Treasury Bond portfolio as 200
part of the amortised cost portfolio. In yet
another positive, the historically high 150
Treasury Bill and Treasury Bond rates in
the third quarter, allowed the Bank to 100
grow its customer base of Government
Securities Investors. 50
143
169
219
84
24
67
64
74
20
78
66
19
22
44
36
On the Forex front, it was perhaps one of 0

the most challenging times in recent years. 2019 2020 2021 2022
Weak economic conditions, an T-Bill T-Bond SLDB SLISB
unprecedented Balance of Payments
crisis, on top of the massive LKR
depreciation, and severe shortage of Exchange Income
foreign exchange liquidity in the domestic Rs Mn Way Forward
foreign exchange market, all culminated in 20,000 On the back of positive market signals
the CBSL resolving to default its debt
16,261 emerging in the fourth quarter of
servicing commitments to foreign banks
15,000 2022, it is envisaged that the year
and institutions. The subsequent
downgrade of Sri Lanka’s sovereign rating ahead would be somewhat more
from “C” to “D” by Fitch Ratings in May 2022 conducive for both fixed income
followed by S&P in August 2022 applied 10,000 securities and Forex trading.
further pressure on the LKR leading to Moreover, with the staff-level
never-before-seen exchange rate volatility. 5,000 agreement between the IMF and the
To add to this, the CBSL in April 2022 2,793 4,849 Sri Lankan government expected to
announced the inability to settle the SLDB 2,792 be reached soon, it is hoped that a
(Sri Lanka Development Bonds) maturities 0 potential new EFF (Extended Fund
2022
2019
2020
2021
in USD and proposed an alternate

Facility) will pave the way for the
settlement plan. By exercising these
country to pursue rate stability and
prevent further pressure on the LKR.

OPERATIONAL SUPPORT
digital tool to handle customer queries in a

convenient manner was also rolled out. 96.78%
2022
With the rapid
Including these latest developments,
nearly 40% of the NSC functions have now Average ATM Uptime
growth in the Bank’s been automated and converted into
paperless processes resulting in a
business as well substantial reduction in paper usage by maintain the Bank’s uptime target. Another
as expansion in
NSC. notable initiative by the CCD was the
launch of a dedicated hotline to encourage
digital channels, the Meanwhile, the scope of the NSC was
further expanded in the current financial
branches to immediately report any
NSC has in recent

observed delays by cash loading partners
year, with several routine back-office or maintenance service providers in
years focused quite

functions (system data entry, processing attending to on-site ATMs. A notice
bulk transactions, preparation of customer containing hotline details was posted at
extensively on account confirmations, processing
regulatory orders) at branches brought
off-site ATMs as well to enable customers
process automation
to notify the CCD of any machine downtime
under the purview of the NSC. A separate issues they may have experienced. The
to streamline the
unit was carved from within the NSC to CCD also began working to implement a
manage these functions with effect from new cash draining mechanism which
workload and keep mid-2021. This effort is seen as the first
step towards ensuring all non-essential
would streamline the disbursement of
overheads under
notes through ATMs and thereby prevent
branch back-office functions are handled machine downtime triggered by the non-
control.
in a more focused manner at a central availability of certain denominations.
point in order to improve productivity of A culmination of these efforts ensured the
branch teams and enhance overall desired 95%+ average uptime was
customer experience. maintained across the network in 2022.
Network Services Centre
Central Cash Department Meanwhile, the CCD also rolled out a
broad-based awareness campaign
As the central hub handling all back-office through the branch network to prevent
reconciliation processes, the Network The Central Cash Department (CCD) plays the circulation of defaced currency notes.
Services Centre (NSC) performs a critical an intermediary role in facilitating the cash
role in ensuring that day-to-day Bank requirements of the branch and ATM
operations run smoothly. Recoveries
networks. In 2022, the CCD took steps to
further strengthen monitoring activities in
With the rapid growth in the Bank’s
order to optimise cash availability at It was another challenging year for
business as well as expansion in digital
branches and manage day-end physical recoveries as the impact of the economic
channels, the NSC has in recent years
cash reserves in line with internal crisis began to have a telling effect on
focused quite extensively on process
parameters and in adherence to CBSL corporates, SMEs and individuals alike.
automation to streamline the workload
guidelines. Seeing as how industries that had
and keep overheads under control. Good
struggled for over two years due to
progress was made in the ongoing As the key custodian of the Sampath ATM pandemic related challenges were once
automation programme with the ATM/ network, the CCD continued to work again under stress, Sampath Bank
CRM and CEFT reconciliation processes closely with the Bank-appointed third continued to emphasise its two-pronged
partly automated during the current party cash loading partners to push for recovery approach focused on prevention
financial year. As part of the NSC’s ongoing on-time cash replenishment at ATMs. This and reduction of non-performing loans.
automation programme, the regulatory was coupled with a focused programme to
reporting process was automated to drive maintenance service providers to
support accurate and timely submission of attend to ATM breakdowns in order to
regulatory reporting requirements. A new

Stage 3 Impairment to Stage 3 Impaired Loans (Stage 3)

Loans Ratio - 2022 Ratio - 2022
Working closely
% %
60 5
4.1
4.4 to understand
55
53.8
4
the customers’
50
50.5
3 3.3 predicament,
tailor-made solutions
49.7 3.2
were offered to assist

47.0
45 2
40 1 stressed customers.
For example;
Q1 22
Q2 22
Q3 22
Q4 22
Q1 22
Q2 22
Q3 22
Q4 22
many customers
There were some key initiatives At the same time, working closely to in the tourism and
implemented in this regard, most notably
the automation of key Management
understand the customers’ predicament,
tailor-made solutions were offered to
construction sectors
Information System (MIS) reports and the assist stressed customers. For example; were offered tailored
rollout of a comprehensive data capture many customers in the tourism and
platform to enable real time data tracking construction sectors were offered tailored restructuring and
of acquired assets. restructuring and rescheduling solutions
to help them tide over the current crisis.
rescheduling solutions.
Alongside the strong focus on MIS,
monitoring and review procedures were From an operational perspective,
also further strengthened. Various commissioning of the new digital
different information perspectives and Delinquent Management System (DMS)
analyses were shared with branch teams went ahead as planned in mid-2022. The
with zonal recovery heads called in for a fully integrated new system will see the full
monthly meeting with the Head of spectrum of recovery work streams from
Recoveries for a detailed review of stressed monitoring and follow-up of credit facilities
portfolio under their purview. Leadership to the operational procedures related to
oversight of infected customer portfolios recovery and including the steps taken by
was also increased with the Head of the Legal Department, all consolidated on
Recoveries and where appropriate, the a single platform. Phase 1 of the DMS roll
Senior Deputy General Manager in charge out saw a centralised call centre being set
of Recoveries, getting involved in reviewing up to handle customer reminders at the
the progress of individual customers’ files. pre-NPA stage. The next phase of
In addition, the performance of third party monitoring Non Performing Credit
recovery agents was rigorously monitored, Facilities (NPCF) involves work stream
while resources at the Legal Department integration commenced in the latter part
were further enhanced in order to bring in of 2022 and is expected to be completed
more stringent monitoring of legal files. by end-2023.

PERFORMANCE OF SUBSIDIARIES
GRI 2-2
Sampath Centre Limited SC Securities (Private) Limited
Sampath Centre Limited was established Total asset base of the Company increased SC Securities (Private) Limited is a
in 1996 as the first subsidiary of the by 1.9% from Rs 7.9 Bn as at end-2021 to fully-owned subsidiary of Sampath Bank
Sampath Bank Group. The Company owns Rs 8.0 Bn as at the reporting date. The which is engaged in providing stock
and manages the building at No. 110, Sir main asset of the Company is the building broking services to local and foreign
James Peiris Mawatha, Colombo 02, which situated in Colombo 02. In order to meet investors. The Company is a licensed
houses the Bank’s Head Office. The main the demand of additional office space member of the Colombo Stock Exchange
source of income for Sampath Centre is requirement of its tenant, the Company (CSE) and has been operating in Sri Lanka’s
the rental income earned by leasing out constructed an additional 6 floors on top capital market since 1992.
commercial space in the building. At of the 8th floor at a total cost of Rs 1.9 Bn.
present, Sampath Bank is the Company’s As of today, floor No. 10, 11, 12, 13, 14 and The financial year 2022 saw SC Securities
only tenant, occupying the entire building part of the 9th floor have been completed produce a satisfactory performance.
except 6th floor which remains under and handed over to the tenant. The curtain Brokerage income of the Company
construction/renovation. Sampath Centre wall (cladding) and new centralised air decreased to Rs 436 Mn in 2022 from
Limited tabled a pre-tax profit of conditioning (Heating, Ventilation and Air Rs 720 Mn reported in 2021, and
Rs 345 Mn for FY 2022, compared to Conditioning - HVAC) system installation consequently, post-tax profit for the year
Rs 520 Mn in 2021, a YoY decrease of 34%. have also been completed. also fell to Rs 146 Mn from Rs 326 Mn
This decline is mainly attributed to the reported in the previous year. These
93% decrease in fair value gain on With the purpose of upgrading the existing results are commendable as they come
investment property. The Company 8 floors of the building to the same amidst extreme political and economic
recorded a post-tax profit of Rs 17 Mn in standard of upper floors, the Company uncertainty in the country.
2022, compared to Rs 509 Mn in the commenced the Phase 2 of the building
previous year. This drastic drop is expansion project. Under Phase 2 the Amidst various monetary policy decisions
attributed to the increase in deferred tax renovation of the 7th floor was fully by the CBSL, political unrest, policy
expense owing to the change in income completed and handed over to the tenant inconsistency and uncertainty surrounding
tax rate. in June 2022, while the 6th floor was fully restructuring of the foreign/local
vacated to enable renovation work to borrowings, the All Share Price Index (ASPI)
commence in August 2022. Refurbishment declined by an unprecedented 30.6%
of the ground floor interior also remains in year-on-year. Total market turnover at the
progress as at end-December 2022. CSE also decreased to Rs 687 Bn in 2022
Phase 2 which started in September 2020 from Rs 1,173 Bn reported in 2021,
is scheduled to be completed by end- reflecting a YoY decrease of 41.5%, while
2024. total market capitalisation declined to
Rs 3,847 Bn. The turnover to market
capitalisation ratio fell to 17.8% in 2022
from 21.4% in 2021.
Sampath Centre building after renovation

The performance of SC Securities during government, in particular import

this difficult period in the local equity restrictions have forced the NBFI sector to
market, is attributed to the expertise of diversify its credit portfolio away from its
the Company’s investment advisors and leasing and hire purchase model leading
research teams as well as the strategic to a higher concentration on pawning/gold
Sampath Information Technology
decisions taken by the management to loan products. As a cascading effect of this,
Solutions Limited
leverage both the positive and negative leasing and hire purchase products as a
market sentiments. share of total loans and advances
continued to decline in 2022. To add to Sampath Information Technology
Scan this QR code this, the CBSL’s decision to raise policy Solutions Limited (SITS) is a fully-owned
for more details on
SC Securities
interest rates in 2022 brought further subsidiary of Sampath Bank PLC. The
(Private) Limited pressure on net interest income and Company specialises in providing end-to-
www.sampathsecurities.lk ultimately on profitability of the NBFI end system integration and consultancy
sector. services to support corporates accelerate
their digital transformation journey.
Even amidst these challenging Managed services, software solutions, and
circumstances, tactical strategies adopted enterprise solutions are the key pillars of
by the Siyapatha management enabled the SITS’s value proposition. In 2022, SITS
the Company to declare a satisfactory received the bronze award at the NBQSA
performance for FY 2022, with pre-tax and - National ICT Awards 2022 for its “PRIME”
post-tax profits of Rs 1,064 Mn and software solution platform for corporates.
Rs 755 Mn respectively. However, owing to
Siyapatha Finance PLC
the aforementioned challenges, the net Despite economic disruptions, social and
lending portfolio decreased by 5.5% to political unrest, the Company continued to
Siyapatha Finance PLC (Siyapatha), is a Rs 34.6 Bn as at the end of year 2022. produce solid financial results, tabling a
fully-owned subsidiary of Sampath Bank Meanwhile, having booked additional revenue of Rs 1.3 Bn and a post-tax profit
PLC, incorporated in March 2005 and provisions as management overlay for of Rs 111 Mn for FY 2022.
initially named as Sampath Leasing & 2021 on a forward-looking basis, the
Factoring Limited. Over its 17 years of Company was not required to effect a Scan this QR code
for more details on
operation, Siyapatha Finance has grown significant increase in the impairment Sampath Information
into the largest subsidiary of Sampath provision during the current period and Technology Solutions
Bank and in September 2013 the entity consequently Siyapatha was able to Limited
was rebranded to its current name maintain 58.74% impairment coverage www.sits.lk
subsequent to receiving the Finance against gross non-performing assets in the
Company License from the Monetary period under review.
Board of the Central Bank of Sri Lanka
under the Finance Business Act No. 42 of Scan this QR code for
2011. more details on
Siyapatha operates within the NBFI (Non- www.siyapatha.lk
Banking Financial Institutions) sector,
which has been severely affected by
adverse economic conditions in the
country in the recent years. Contractionary
monetary policy measures by the

Characterised by a
high-risk environment,
trapeze acts often have
in place the necessary
safeguards and
precautionary
mechanisms to mitigate
risk and provide the
assurance of safety.
ASSURANCE IN
PROTECTION
GOVERNANCE AND
RISK MANAGEMENT
Uncertainty is negated by minimising risks, and we continue to assess the
surrounding environment to insulate ourselves and our partners against the
challenges that lie ahead.
Corporate Governance
Chairman’s Introduction to Corporate Governance.
Governance....................168
.................. 168
Corporate Governance Report.........................................................
Report.........................................................170
170
Corporate Governance Compliance Disclosure...........................
Disclosure...........................179
179
Governance Structure.
Structure.........................................................................180
....................................................................... 180
Board of Directors.
Directors................................................................182
.............................................................. 182
Corporate Management.
Management......................................................186
.................................................... 186
Committee Reports
Board Audit Committee Report........................................................
Report........................................................190
190
Board Human Resources and Remuneration
Committee Report...........................................................................
Report...........................................................................194
194
Board Nomination Committee Report.
Report............................................196
.......................................... 196
Board Integrated Risk Management Committee Report.
Report............198
.......... 198
Board Related Party Transactions
Review Committee Report.............................................................
Report.............................................................201
201
Compliance Report.
Report...........................................................................203
......................................................................... 203
Risk Management Report ............................................................
............................................................204
204
CORPORATE GOVERNANCE
CHAIRMAN’S INTRODUCTION TO CORPORATE GOVERNANCE

Dear Stakeholders,
Strong corporate governance The Bank received applications for over

principles continue to underpin Rs 10 Bn for the above issue and the same
Sampath Bank’s ability to deliver was successfully oversubscribed on the
results and meet stakeholder opening day, demonstrating investor
expectations. confidence in Sampath Bank PLC.
I am indeed pleased to report that Strategy, Risk Management, Internal

Sampath Bank’s well established corporate Control, and the Adoption of
governance has helped the Board to lead Environmental, Social and
the Bank through a multitude of challenges, Governance (ESG) Principles
including severe economic headwinds and The Board continued to execute its
growing competitive pressure that we responsibility to ensure the efficacy and
HARSHA AMARASEKERA experienced during the year. adequacy of the Bank’s risk management
Chairman framework and internal control systems.
I believe our ability to counteract these Supported by the Board Integrated Risk
Governance Highlights for 2022 challenges is in no small part due to strong Management Committee, the Board
and decisive action by the Board to frame undertook a deep dive to understand
Board Strength
the Bank’s response to ongoing challenges. contextual factors that could potentially
Ì Appointment of Mr Hiran I refer in particular to some of the key affect the Bank’s risk profile which saw
Cabraal to the Board actions taken by the Board to steer some key structural reforms being
Ì Re-designation of Mr Dilip de S Sampath Bank forward, despite the tough introduced to reinforce risk management
Wijeyeratne as Senior times; overseeing the strategic realignment fundamentals. In parallel, the Board also
Independent Director of the of the core business in response to the worked with the Board Audit Committee to
Board current context; expediting the further strengthen due diligence activities
implementation of the digital roadmap; carried out under the purview of the
Leadership Succession authorising the expansion of the Bank’s Internal Audit Department.
Ì Appointment of Mrs Ayodhya community empowerment programme, to
Iddawela Perera as the name a few. Meanwhile, in light of the growing global
Managing Director - Designate emphasis on ESG matters as well as the
The Board, as the key custodian of the CBSL’s recent Directive aimed at promoting
Board Committee Effectiveness Bank’s capital planning activities, also Sustainable Finance Activities among
Ì Review of the Board Sub- announced in October 2022 its intention Licensed Banks, the Board moved to
Committee composition to raise capital of Rs 5 Bn through the establish a new Environmental and Social
issue of 50,000,000 Basel III compliant - Management System (ESMS) Committee.
Managing Conflict of Interest Tier II, Listed, Rated, Unsecured,
� Review of the procedure of Subordinated, Redeemable, five-year Board Quality and Succession
handling the Related Party debentures with a Non-Viability Planning
Transactions by improving the Conversion, for a par value of Rs 100/-. The
I am pleased to report that the annual
dissemination of information to initial issue was structured with an option
Board performance evaluation process
all relevant stakeholders to issue up to a further 20,000,000
applicable for the year 2021 was concluded
� Introduction of a Policy on debentures at the discretion of the Bank in
in the early part of 2022, which gave us
Anti-Bribery and Corruption the event of an over-subscription of the
valuable insights into the collective and
retrospectively initial issue and with a further option to
individual strengths of the Sampath Bank
issue up to a maximum of another
Board, while highlighting areas for
ESG Principles 30,000,000 debentures in the event of an
improvements that will enhance the
� Establishment of the over-subscription of the initial issue and
overall effectiveness of the Board.
Environmental and Social the second tranche.
Management System (ESMS)
Committee

It was on this basis that a leading Sampath Bank as a licensed commercial Board Declaration
personality Mr Hiran Cabraal was bank holds ethics and integrity as its On behalf of the Board, I wish to declare
appointed to the Sampath Bank Board on highest virtues and strives to conduct its that the Bank and Team Sampath,
30th June 2022 as an Independent, Non- business on the principles of good including the Board of Directors, Corporate
Executive Director. Mr Hiran Cabraal, who governance, ethical conduct and Management and Employees have
is highly respected in his respective field, sustainability. The Bank is also committed complied with the principles of good
certainly makes an impactful addition to to transparency in all its dealings, which governance as set out by the regulatory
the Board credentials of the Bank. includes transparency in managing actual, frameworks applicable for licensed
potential or perceived conflict of interest, commercial banks, including the Banking
Meanwhile, Mr Dilip de S Wijeyeratne was and transparency in dealings with the Act Direction No. 11 of 2007 on Corporate
re-designated as the Senior Independent Customers, Suppliers, Directors and Governance for Licensed Commercial
Director (SID) on 6th May 2022 in place of Agents. The Bank’s commitment to Banks issued by the Central Bank of Sri
former SID, Mr Deshal de Mel who transparency also extends to the way in Lanka and its amendments, the Code of
resigned from the Board on the same which relationships are managed with Best Practice on Corporate Governance
date. people who are politically exposed, 2017 issued by the Institute of Chartered
dealings with the regulators and potential Accountants of Sri Lanka, the Listing Rules
I am also very pleased to note that our customers and employees. These of the Colombo Stock Exchange as well as
succession planning programme for KMPs principles were formally documented in Bank’s internal policy guidelines, best
is proving to be a tremendous success, as the Board approved Policy on Anti-Bribery practices and all other applicable
evinced by the formal appointment of Mrs and Corruption introduced on 8th July regulations.
Ayodhya Iddawela Perera as the ‘Managing 2022 with retrospective effect from 11th
Director – Designate’ of Sampath Bank. November 2021. Way Forward
As Chairman of the Board, I wish to
Board Committee Effectiveness Shareholder Rights and Annual
reaffirm that the Sampath Bank Board will
Focused efforts to improve the General Meeting (AGM)
continue to support good governance and
effectiveness of Board Sub-Committees, In view of the COVID-induced two-year the application of sound corporate
saw the Board taking steps to review the hiatus, the Board resolved to conduct the governance principles based on effective
composition of the Board Sub-Committees AGM as an in-person meeting. Accordingly, and ethical leadership. Further, we will
in order to bring in more specialised the 37th AGM is scheduled to be held on ensure best practices on governance are
knowledge on topics that have become 30th March 2023 at 9.30 a.m at “Balmoral” also in place and comply with statutory
relevant in the current economic context. The Kingsbury, No. 48, Janadhipathi governance requirements to ensure long
Mawatha, Colombo 01. term sustainability of the Bank at all times.
Managing Conflict of Interest
Towards this end, we will remain vigilant
As part of ongoing emphasis on In such an eventuality, I wish to reassure regarding the evolving business landscape
strengthening measures to support our shareholders that the Board will make while managing the ongoing uncertainties
proactive identification of Directors’ all necessary arrangements to ensure associated with the challenging economic
interest, the procedure for handling of maximum participation. conditions in order to uphold our
Related Party Transactions was further reputation for good governance
enhanced with a view to improving the Further information about the AGM,
leadership.
dissemination of information to all relevant details of the resolutions to be proposed
stakeholders. This was coupled with the and the relevant voting procedures are set
introduction of new technology systems to out in the Notice of AGM, which has been
facilitate the capturing of share dealings by made available alongside this Annual
Directors, their respective close family Report. HARSHA AMARASEKERA
members and KMPs. Chairman
17th February 2023

Colombo, Sri Lanka

CORPORATE GOVERNANCE REPORT

Governance Approach and Key � Facilitate the proper segregation of � Promote ethical leadership, good
Principles duties and responsibilities between corporate citizenship and sustainable
Sampath Bank’s approach to good the Board and Corporate development to ensure that they are
governance is anchored to the principles Management applied in the best interests of all
of accountability, delegation and effective � Support the efficient use of resources, stakeholders
oversight to support sound and prudent and promote accountability and Corporate Governance Framework
decision-making that will reinforce responsible stewardship of those
Sampath Bank’s Governance Framework
stakeholder trust and validate the Bank’s resources
regulates the application of policies and
licence to operate. � Ensure the Bank complies with all standards and ensures that the Bank’s
legal and regulatory requirements governance requirements on legal and
Towards this end, the Bank has
and encourage the voluntary adoption regulatory compliance, financial management,
implemented a robust governance
of governance best practices internal controls, disclosure controls, risk
mechanism to serve as the backbone for
its operations. Framed by the regulatory � Preserve accountability to management, internal audit, human resource
requirements, voluntary codes and best stakeholders management, information management,
practices, and the Bank’s governance � Safeguard the Bank’s culture of stakeholder relationships, ethics, voluntary
structure and internal constitutional business integrity and responsible codes and sustainability are complied with.
frameworks, Sampath Bank’s governance business practices The framework also defines the roles and
mechanism seeks to achieve the following responsibilities at each level of authorities
objectives; within the Bank.
Governance Structure
Regulatory Requirements Internal Frameworks Voluntary Codes and Best Practices
� The Companies Act No. 7 of 2007 and its � Articles of Association � The Code of Best Practice on
amendments Corporate Governance 2017 issued
� Board-approved Terms of
� The Banking Act No. 30 of 1988 and its by the Institute of Chartered
amendments Reference (TOR) of Board
Accountants of Sri Lanka
� The Banking Act Direction No. 11 of 2007 Sub-Committees
on Corporate Governance for Licensed � Global Reporting Initiative (GRI)
� Board-approved policy
Commercial Banks issued by the Central Standards issued by the Global
Bank of Sri Lanka and its amendments frameworks for governance,
Sustainability Standards Board
� The Anti-Money Laundering Laws and risk, compliance and
Regulations and Financial Transaction operational areas � Integrated Reporting Framework
Reporting Act No. 6 of 2006 and its issued by the International
amendments � Codes of Conduct for Bank
Integrated Reporting Council (IIRC)
� The Listing Rules of the Colombo Stock Employees, Key Management
Exchange Personnel and Directors � ISO 27001 Information Security
� The Securities and Exchange Commission Management
of Sri Lanka Act No. 36 of 1987 and its
� United Nations Global Compact
amendments thereto, as repealed by the
Securities and Exchange Commission of (UNGC) Sustainability Principles
Sri Lanka Act No. 19 of 2021
� International Labour Organisation
� The Inland Revenue Act No. 24 of 2017
(ILO) Convention for Social and
and its amendments
Labour issues inducing Human
� The Shop and Office Employees Act No.
19 of 1954 and its amendments Rights
� The Sri Lanka Accounting and Auditing � United Nations Sustainable
Standards Act No. 15 of 1995
Development Goals (SDG)
� The Foreign Exchange Act No. 12 of 2017
and its regulations
� The Code of Best Practices on Related
Party Transactions issued by Securities
and Exchange Commission.
� All other applicable regulations
Sampath Bank Corporate Governance Framework

GRI 2-12
Board of Directors Independent & Non-Independent Directors
Sampath Bank is led by a strong and well-

balanced Board. A majority of Board
members being Non-Executive Directors
bring a wide range of skills and experience 7 4
to enable them to make sound judgement, Independent Directors Non-Independent Directors
provide constructive challenge, monitor
performance and help to develop the
Bank’s strategy. Non-Executive & Executive Directors
Recognising the value of diversity at Board

level, the Bank has in recent years adopted
a more inclusive approach to strengthen
diversity of gender, age and skills to induce
9 2
fresh perspectives that will foster robust Non-Executive Directors Executive Directors
debate and support effective decision-
making.
Diversity of Age Diversity of Gender
As at 31st December 2022, the Bank Board 53 59 Women Men
comprised eleven (11) Directors, of which
Nine (09) including the Chairman, function
in a Non-Executive capacity. The two (02)
Executive Directors are the Managing
45
51 55 58 60
62
2 9
Director (MD) and the Chief Financial
Officer (CFO), who are also considered to
be Key Management Personnel (KMP) of
Tenure on the Board (Years Completed)
the Bank. Seven (07) out of eleven (11)
Directors are independent bringing
independent judgement and objectivity to
the Board deliberations. 0 1 2 3 4 5
6
Duties and Responsibilities of the
Board
The Sampath Bank Board operates as per Directors’ Expertise
the powers vested on it by the Bank’s
Articles of Association and Code of
Conduct and Governance Requirements
for Directors, which declares the Board as
the chief custodian of the Bank’s purpose 3 9 2 1 1
and values. In this capacity, the Board Business Banking, Finance Law Marketing Corporate
Management and Insurance Strategy
provides stewardship and strategic
direction to guide the Corporate
Management towards achieving short,
medium and long term growth objectives.
The Board ensures the availability of
adequate resources and necessary 2 1 2 2
cultural alignment to meet these Engineering and Human Capital Risk Management Investment Banking
objectives, and that proper internal control Information Technology and Engagement and Compliance and Treasury
systems and appropriate reporting
frameworks are in place to measure and * an individual Director may represent more than one discipline.
report on performance.

The Board has taken up the challenge to exceed

the performance expectations of stakeholders while
ensuring the Bank remains fully compliant with all
applicable laws and regulations.
The Board recognises its accountability The Board considers the Bank’s
towards a wider range of stakeholders Vision to be “The Growing Force in
such as employees, suppliers, customers Sri Lankan Financial Services”; to be
and society at large and seek to provide the key underlying premise
relevant information to range of such influencing corporate strategy.
connected stakeholders. When Beyond this, the Bank’s core values
determining the scope and scale of provide the foundation for the
reporting, the Board is guided by Board to establish the Bank’s
the Articles of Association of Str strategic direction.
at
the Bank, the laws under eg
y
which it is incorporated ty F
Conformance
ili
or
and the requirements of
ab
Functions
ul
regulatory bodies
nt
ati
ou
governing the
on
Ac c
activities of the
Bank.
Board’s Focus
Towards
Governance
Challenges
Mo
ing
nit
Performance
The Board refers to
or
ak
Functions
in
the financial statements an

g
lic
y-
d
and accounting systems Su
pe Po Board-approved policies
as the primary source for rvi
sio and procedures serve as the
monitoring the state of the n
basis for operationalising the
Bank and the performance of its
Bank’s strategy. These policies,
KMPs. To be able to keep a better track
procedures and plans provide the
of executive activities, the Board also
criteria against which the Board can
relies on regular reports from the
subsequently monitor and oversee
budgetary control system where actual
the effectiveness of the Bank’s
revenues and expenditures are measured
Executive Management.
against budgets.

GRI 2-12,26
As the apex governing authority in charge Board Responsibility for IT Board Responsibility for Promoting
of the effective stewardship of the Bank, Governance Ethics and Good Business Conduct
the Board provides direct oversight for The Board discharges its responsibility for The Board sets the tone from the top and
Risk Management and Internal Control, IT IT Governance through the Board IT leads by example in promoting a culture of
and Sustainability as well as for prompting Committee (BITC) which is tasked with ethics and good business conduct. Every
a Bank-wide culture of ethics and good making recommendations to the Board member of the Board complies both in
business conduct. The Board holds itself regarding the Bank’s digital strategy, letter and in spirit, to the Code of Conduct
accountable to shareholders for the policies, formulating expenditure budgets and Governance Requirements for
proper management of the Bank and to to ensure the Bank’s IT infrastructure and Directors thus executing their duties
act in the best interest of shareholders. information security systems keep pace ethically and in align with the Bank’s values.
with the evolving requirements of the
Board Responsibility for Risk business. The recommendations made by Additionally, the Code of Conduct for
Management and Internal Control the BITC are reviewed and approved by Employees and the Code of Conduct for
Risk oversight is a primary Board the Board as appropriate prior to being Corporate Management, both set out
responsibility. The Board together with the implemented. specific guidelines that serve as the basis
Board Integrated Risk Management of promoting good business conduct
Committee (BIRMC) is responsible for The BITC works closely with the Chief among employees. In particular, the Anti-
establishing a holistic risk control Information Officer (CIO) to oversee the Bribery and Corruption Policy and the Gift
framework to enable proactive implementation of the Bank’s digital Policy which are encapsulated within these
identification and effective management initiatives and infrastructure upgrades and codes seek to prohibit any Bank
of any and all risks affecting the Bank at a with the Chief Information Security Officer employees from paying or accepting
given time. The internal control framework (CISO) to safeguard the Bank’s data bribes/gifts to obtain any improper
includes Board approved risk appetite systems against both information security business or other advantage.
limits, policies and procedures and is breaches and cyber threats.
further supported by a fully-fledged risk Meanwhile, the Whistle Blowing Policy
assessment programme and a Board Responsibility for functions as a channel for employees and
comprehensive monitoring mechanism, Environmental and Social other third parties to anonymously report
both implemented under the purview of Governance (ESG) potential irregularities or financial
the Bank’s Risk Management Unit (RMU). The Board has always placed strong misappropriations. All Whistleblower
The RMU is headed by the Chief Risk emphasis on strengthening Sampath complaints are reviewed by the Board
Officer who reports to the BIRMC. Bank’s ESG credentials. In 2022, the Board Audit Committee. Throughout the
took a major step forward to cement this investigation process, two-way
Recognising a well-defined Internal Control commitment with the establishment of the communication is maintained to keep the
System is vital for the effective Environmental and Social Management whistleblower updated regarding the
management of risk. The Board has System (ESMS) Committee. The ESMS progress of the investigation. In 2022, the
established an Internal Audit function to Committee has been tasked with putting Board authorised the Group-wide roll out
perform routine due diligence to provide in place a framework of policies and of the Whistleblower process with an
independent assurance regarding the procedures to drive the principles of authorised team appointed at each
efficacy of the existing risk control sustainable lending while simultaneously subsidiary to receive and coordinate the
framework. The Internal Audit function is creating a foundation to integrate global investigation of Whistleblower complaints.
headed by the Chief Internal Auditor who best practices for environmental
reports directly to the Board Audit management into the Bank’s own Board Responsibility for Upholding
Committee (BAC). operations. Shareholder Rights
The Board is committed to the responsible
The Risk Management Report on pages The duties of the ESMS Committee also treatment of all shareholders. Towards
204 to 217, the Report by the Chairman of include reviewing of the Bank’s Material this end, multiple channels are available to
BIRMC on pages 198 to 200 and the Topics with reference to ESG encourage active shareholder
Report by the Chairman of BAC on pages considerations. engagement, while the corporate website,
190 to 193, the Directors’ Statement on the Annual Report, Interim Financial
Internal Control Over Financial Reporting The section on Material Topics on pages Statements, CSE announcements, other
on pages 232 to 233, offer a comprehensive 58 to 61 of this Annual Report offers more press releases and social media posts
coverage of the Bank’s Risk Management context on this area. keep shareholders informed of the Bank’s
infrastructure and Internal Control progress and activities.
activities.
GRI 2-10,12,15
In line with the Board’s efforts to prioritise for the implementation of Board approved Directors’ Remuneration
equitable access to information, Sampath policies ensuring that the Bank fulfils its Remuneration of Non-Executive Directors
Bank’s Interim Financial Statements are regulatory and fiduciary commitments. is determined based on the Board-
published in all three mediums. approved Policy on Directors’
Furthermore, the Annual Report and other Mr Nanda Fernando serves as the Remuneration whereas the remuneration
financial information are made available Managing Director of Sampath Bank PLC. for Executive Directors is determined in
on the corporate website for easy line with the Board-approved Reward
reference and download. Appointment/Re-election/
Management Policy for KMPs which is
Resignation of Directors
designed to attract, retain and motivate
The Annual General Meeting provides an New Directors are appointed by the Board the executive leadership of the Bank.
opportunity for shareholders to connect through a formal and transparent process
with the Board and the management one- with due consideration of Managing Conflicts of Interest
on-one. The 36th AGM was convened as recommendations by the Board All Directors are expected to act in good
an online virtual meeting through “Zoom” Nomination Committee. Potential external faith and maintain full transparency
video communication app on 30th March directorial candidates are initially vetted by regarding the activities that could
2022 to encourage maximum participation the Nomination Committee to confirm potentially be construed as conflict of
of shareholders. their eligibility and ability to meet the interest. As such, all Directors are required
criteria for assessment of fitness and to submit an annual written declaration to
Role of the Chairman of the Board propriety of Directors. the Company Secretary stating all other
The Chairman’s primary role is to lead the directorships and memberships they hold
Board to ensure it functions effectively in Mr Deshal de Mel - Senior Independent
and any interim changes should be
achieving the Bank’s purpose and strategy. Director tendered his resignation from the
immediately notified to the Company
In this regard, the Chairman is responsible Sampath Bank Board on 6th May 2022
Secretary. Such interim declarations are
for ensuring Board Meetings are scheduled and was replaced by Mr Dilip de S
included as part of the Board agenda and
well in advance with appropriate frequency Wijeyeratne as the Senior Independent
presented for review at the next Board
to ensure that the Board agenda is Director of the Board on the same date.
meeting.
forward-looking and reflects the important
matters faced by the Bank. It is the duty of Mr Hiran Cabraal, a veteran international
The same procedure applies to new
the Chairman to encourage the open banker and risk management consultant
Directors, who upon assuming a position
exchange of views and robust debate at was appointed as an Independent, Non-
on the Sampath Bank Board, are required
Board meetings, in particular by facilitating Executive Director to the Sampath Bank
to formally declare to the Bank the
the effective contribution of Non-Executive Board on 30th June 2022.
positions they occupy in companies and
Directors, and promoting constructive public institutions.
relations between Executive and Non- In accordance with the provisions in the
Executive Directors. Articles of Association and the CBSL
The Board Related Party Transactions
Direction, Directors appointed to the
Review Committee (BRPTRC) provides
Mr Harsha Amarasekera serves Board after the last AGM are eligible to
guidance and oversight for managing
as the Non-Independent, Non-Executive offer themselves for election by the
issues pertaining to conflicts of interest.
Chairman of the Sampath Bank Board. shareholders at the subsequent AGM.
Page 231 of this Annual Report carries a
Accordingly, Mr Hiran Cabraal will be
comprehensive and fully verified list of
Role of the Managing Director eligible to stand for election by the
Directors’ Interest in Contracts with the
Sampath Bank’s Managing Director shareholders at the 37th AGM to be held
Bank as at 31st December 2022. Further
reports directly to the Board and is on 30th March 2023.
insights can be obtained from the Report
responsible for the executive management by the Chairman of the BRPTRC on pages
of the Bank. In this capacity, the Managing Meanwhile, there is also a clear procedure
201 and 202.
Director is responsible for providing in place to enable the orderly succession
to the Board. Based on this procedure,
leadership to the Corporate Management Board Meetings
Team in the day-to-day management. The Mrs Ayodhya Iddawela Perera was formally
A total of 24 Board Meetings were held in
Managing Director also provides oversight appointed as ‘Managing Director –
2022 with all meetings well attended.
Designate’ of Sampath Bank PLC.

GRI 2-9
Directors' Attendance at Board and Mandatory Board Sub-Committee Meetings
Name of Director Date of Age Membership Board Meeting Board Sub-Committee Meetings Attendance
Appointment Status Attendance (Attended/ (Attended/Eligible to Attend)
to the Board Eligible to Attend)
BAC BHRRC BNC BIRMC BRPTRC
Mr Harsha Amarasekera 18.08.2020 59 NED NID 24/24 - - 7/7 - -

Mr Rushanka Silva 01.09.2017 45 NED NID 23/24 - - 7/7 - -
Mr Dilip de S Wijeyeratne 13.11.2018 60 NED IND 23/24 14/14 6/7 7/7 6/7 2/2
Ms Aroshi Nanayakkara 30.05.2019 53 NED IND 23/24 - 7/7 2/2 4/4 -
Dr Sanjiva Weerawarana 01.06.2019 55 NED IND 22/24 13/14 - - 5/7 2/4
Mr Vajira Kulatilaka 25.06.2020 62 NED IND 24/24 - 7/7 - - 4/4
Mrs Keshini Jayawardena 01.10.2020 62 NED IND 23/24 - 2/2 7/7 1/1 1/2
Mr Vinod Hirdaramani 16.02.2021 51 NED IND 23/24 3/3 6/7 4/4 1/1 -
Mr Hiran Cabraal 30.06.2022 58 NED IND 11/11 8/8 - - 4/4 2/2
Mr Nanda Fernando 13.09.2016 60 ED 24/24 - - - 7/7 -
Mr Ajantha de Vas Gunasekara 29.10.2020 55 ED 24/24 - - - - -
Mr Deshal de Mel 26.09.2019 38 NED IND 9/9 4/4 2/2 3/3 2/2 1/1
Total Meetings 24 14 7 7 7 4
NED Non-Executive Director ED Executive Director IND Independent Director NID Non-Independent Director
w.e.f 30.06.2022 Until 06.05.2022
All meetings held during the year saw Board Process

the Board allocate an adequate time to
discuss the actual and potential Before the Meeting At the Meeting After the Meeting
impacts to the Bank from the ongoing
economic crisis in Sri Lanka and to
determine the way forward. Stemming
from these discussions, the Board The routine agenda for The Directors are Board Minutes are
moved to redefine the Bank’s risk Board Meetings is expected to come circulated to all Directors
parameters with special emphasis on developed by the prepared for Board by the Company Secretary
prudent management of credit and Chairman in consultation meetings and actively subsequent to the Board
liquidity risks in the current context. with all other Directors participate in Board Meeting inviting Directors
The implications to the Bank from the including the Managing discussions. A Director is to share their comments
LKR depreciation was also a frequent Director and the expected to recuse and concerns regarding
agenda item at many of the meetings. Company Secretary. himself/herself from the Minutes. Significant
Agenda items typically participating in any matters that warrant
The Board meetings held in October include but are not limited meetings if an agenda broader discussion are
and November 2022 were dedicated to Strategy, the Bank’s item refers to a manner incorporated into the
towards reviewing and approving the Performance, Industry in which he/she has an agenda for the next Board
strategic plan and the annual budget Performance, Financials, interest. This is done to meeting.
for financial year 2023. Resource Allocation, Risk allow the Board to
Management and deliberate on the matter
The focus on strengthening Compliance. without undue influence.
governance continued throughout the The Company Secretary
year, with the Board reviewing and The Company Secretary is maintains Minutes of all
updating several existing policies, responsible for circulating matters discussed at
including the Whistleblowing Policy. Board papers and the Board meetings.
agenda to all Directors. In
general, this is done
seven days prior to the
meeting by uploading the
BoardPAC.

GRI 2-9
Board Sub-Committees
Board Audit Committee
Board Sub-Committees function under Mr Dilip de S Wijeyeratne
the delegated authority of the Board and (Chairman)
play a crucial role in the Bank’s governance Dr Sanjiva Weerawarana
architecture. Sampath Bank has twelve
Mr Hiran Cabraal
(12) Board Sub-Committees. Of these, five (w.e.f. 01.08.2022)
(05) (Board Audit Committee, Board Board Human Resources Mrs Ranjani Joseph
Integrated Risk Management Committee, and Remuneration (Consultant to the Committee)
Board Related Party Transactions Review Committee
Committee, Board HR & Remuneration Ms Aroshi Nanayakkara 1
Committee and Board Nomination (Chairperson)
Committee) are established to meet Mr Dilip de S Wijeyeratne 2
regulatory requirements, while the Mr Vajira Kulatilaka
remaining seven are voluntary Mr Vinod Hirdaramani
Committees that reflect the Bank’s
Mrs Keshini Jayawardena
commitment to emulate governance best (w.e.f. 01.08.2022)
practices. Mandatory Board
Sub-Committees
All Committees function in accordance Board Nomination (31st December 2022)
with the Board approved Terms of Committee
References (TOR) that cover such matters Mr Dilip de S Wijeyeratne
as membership, scope of duties, (Chairman w.e.f. 06.05.2022)
responsibilities reporting parameters and Mr Rushanka Silva
meeting frequency. 3
Mr Harsha Amarasekera
Mrs Keshini Jayawardena 4
As per the respective TORs, the Chair and
Mr Vinod Hirdaramani Board Integrated Risk
membership of all mandatory Committees
(w.e.f. 06.05.2022) Management Committee
are Independent Non-Executive Directors.
Ms Aroshi Nanayakkara Mr Hiran Cabraal (Chairman)
The independence of Sampath Bank’s
(w.e.f. 01.08.2022) (w.e.f 01.08.2022)
Audit Committee is further enhanced
through the presence of an independent Mr Dilip de S Wijeyeratne
external consultant. 5 Dr Sanjiva Weerawarana
Board Related Party Ms Aroshi Nanayakkara
The TORs of voluntary Committees also Transactions Review (w.e.f. 01.08.2022)
follow a same essential principles, where Committee Mr Nanda Fernando
the majority of the Chair and membership Mr Vajira Kulatilaka (Chairman)
comprise Independent Non-Executive Dr Sanjiva Weerawarana
Directors, with one exception that makes Mrs Keshini Jayawardena
provision for the inclusion of an Executive (w.e.f. 01.08.2022)
Director, usually the Bank’s Managing Mr Hiran Cabraal
Director. (w.e.f. 01.08.2022)
Also, the Board established a Board Sub-

Committee named as “Board Review
Meetings of the Non-Executive
Committee for Sampath Centre
Directors
Constructions”, to temporarily keep track
Secretary maintains the Minutes of the
of the construction and renovation work All Non-Executive Directors meet the
Board Meetings and circulates the same
being done on the Sampath Centre Senior Independent Director at least twice
amongst all Board Members. Additionally,
building on the same day. a year without the participation of Executive
the Directors have unlimited access to the
Directors. The purpose of such meetings is
Company Secretary for advice and
Role of the Company Secretary to provide an independent judgment on
guidance with regard to the compliance
the Bank’s performance and to enable
Sampath Bank’s Company Secretary is with relevant rules, regulations, directions
discussion and communication of
responsible to the Board as a whole, and and statutes.
governance related matters.
to the individual Directors. The Company

GRI 2-9,18
Board Credit Committee

Mr Vajira Kulatilaka (Chairman)
Mr Rushanka Silva
Mr Vinod Hirdaramani
(w.e.f. 01.08.2022)
Mr Nanda Fernando Board Strategic Planning
Committee
Mr Janakan Selvaratnam
(Consultant to the Committee) Mr Harsha Amarasekera (Chairman)
Mr Rushanka Silva
Mr Dilip de S Wijeyeratne
Board Capital Planning Committee
6 Ms Aroshi Nanayakkara
Mr Rushanka Silva (Chairman)
Dr Sanjiva Weerawarana
Mr Dilip de S Wijeyeratne 7
Mr Vajira Kulatilaka
Mr Vajira Kulatilaka Mrs Keshini Jayawardena
Mr Harsha Amarasekera Mr Vinod Hirdaramani
Mr Nanda Fernando Mr Hiran Cabraal
(w.e.f. 01.08.2022)
Mr Nanda Fernando
12 Non-Mandatory Board Mr Ajantha de Vas Gunasekara
Sub-Committees
(31st December 2022) 8
Board Shareholder
Board IT Committee Relations Committee
Dr Sanjiva Weerawarana (Chairman) Mr Rushanka Silva (Chairman)
Mr Rushanka Silva Mrs Keshini Jayawardena
Ms Aroshi Nanayakkara 11
Mr Vajira Kulatilaka 10 (w.e.f. 01.08.2022)
Mrs Keshini Jayawardena Mr Hiran Cabraal
Mr Nanda Fernando (w.e.f. 01.08.2022)
Mr Nanda Fernando
Board Marketing Committee
Ms Aroshi Nanayakkara (Chairperson)
Mr Rushanka Silva
Mr Vinod Hirdaramani 9
Mr Nanda Fernando
Evaluating the Performance of the Board Treasury Committee
Board and Board Sub-Committees Mr Dilip de S Wijeyeratne (Chairman)
The performance of the Board is evaluated Ms Aroshi Nanayakkara
annually with the Board collectively and Mr Vajira Kulatilaka
Directors individually undertaking a self- Mr Vinod Hirdaramani
evaluation to determine if, the Board as (w.e.f. 06.05.2022)
the highest governing body of the Bank same procedure is followed for Mr Hiran Cabraal
has discharged its responsibilities evaluating the performance of Board (w.e.f. 01.08.2022)
satisfactorily. Duly completed Board Sub-Committees.
Mr Nanda Fernando
Performance Evaluation Forms are
submitted to the Company Secretary who The results of the latest evaluation cycle
is required to summarise and compile the confirm that the Sampath Bank Board
responses into a report to be presented and Board Sub-Committees continue to
for discussion at a Board Meeting. The perform their respective roles effectively.

GRI 2-9,17
Directors’ Training Management Committees

Sampath Bank places great importance Management Committees are operational level Committees to provide more focused
ensuring all the Directors have access to oversight in selected areas of the day to day business operations. These Committees
learning, development and training typically comprise representatives from Corporate and/or Senior Management that
opportunities to better equip them with operate on the basis of appropriate TORs approved by the Board.
skills and knowledge required to fulfil their
fiduciary duties and carry out their roles
Corporate Management Advances Committee
and responsibilities. Training on business
Committee
related matters such as those conducted
by the CBSL, CSE and other regulatory
bodies are most often scheduled to be Asset & Liability Management Recovery Planning (RCP)
conducted during Board meetings. The Committee (ALCO) Working Committee
Bank also arranges for Directors to attend
various external forums, including
seminars, conferences and workshops to Investment Committee Internal Capital Adequacy
keep abreast of current developments in Assessment Process (ICAAP)
banking, banking regulations, cyber crime, Working Committee
governance best practices etc.
Credit Policy, Risk and Portfolio Sri Lanka Financial Reporting
Review Committee Standards (SLFRS)
Training Topics Committee
IT Steering Committee Potential NPA Identification
� Open Banking presentation Committee
� Current economic conditions
� Overview of New Securities and Information Security Committee Fraud Risk Management
Exchange Commission Act Committee
� New changes to the CSE Listing

Rules Outsourcing Committee Dissemination of Regulatory
Instructions Committee
� Issues in Sovereign Domestic
Debt Restructuring
Procurement Committee Product Rationalisation
� Current Economic Condition and
Committee
Domestic Debt Restructuring
� Awareness Session on
Executive Advances Committee Data Dissemination
Information Security
Committee
� An Outlook of Debt Restructuring
of Sri Lanka
Risk & Compliance Committee Sustainability Committee
� High Level web conference on key
aspects of AML/CFT compliance
for Board of Directors and Key Internal Control Over Financial Environmental and Social
Management Personnel of Reporting (ICOFR) Committee Risk Management System
Licensed Banks and Licensed Implementation Committee
Finance Companies

CORPORATE GOVERNANCE COMPLIANCE DISCLOSURE
Excellence in Corporate
Governance is viewed as a Disclosure Requirement Reference Page
key catalyst in maintaining Section Reference
Sampath Bank’s Leadership
position within the highly Responsibilities of the Board Section 3(1) 432 - 435
competitive local banking Board Composition Section 3(2) 435 - 436
sector within which the Bank Criteria to Assess Fitness and Propriety Section 3(3) 436
operates. The tables shown of Directors
here summarise the Bank’s Management Functions Delegated by Section 3(4) 437
CBSL the Board
level of compliance with
regulatory requirements, The Chairman and Chief Executive Section 3(5) 437 - 438
including the Code of Best Officer/Managing Director
Practice on Corporate Board Appointed Committees Section 3(6) 438 - 443
Corporate Governance Compliance Disclosure
Governance 2017 issued by Related Party Transactions Section 3(7) 443 - 444
the Institute of Chartered Disclosures Section 3(8) 444 - 446
Accountants of Sri Lanka, the Transitional and Other General Provisions Section 3(9) 446
Banking Act Direction No. 11 of
2007 and amendments thereto,
Disclosure Requirement Reference Page
Section 7.6 of the Listing
Section Reference
Rules of the Colombo Stock
Exchange and Section 168 of
Directors Section A 447 - 455
the Companies Act No. 07 of
Directors’ Remuneration Section B 455 - 456
2007 and amendments thereto.
ICASL Relations with Shareholders Section C 456 - 458
Accountability and Audit Section D 458 - 461
Institutional Investors Section E 462
Other Investors Section F 462
Internet of Things and Cybersecurity Section G 463
Environment, Society and Governance Section H 464

Section Reference
CSE
Contents of the Annual Report Section 7.6 465 - 466

Section Reference
Companies
Act Contents of the Annual Report Section 168 222 - 224
NANDA FERNANDO LASANTHA SENARATNE

Managing Director Company Secretary
17th February 2023

Colombo, Sri Lanka

Finance Dept.
AGM Finance
Treasury Back Office
Investor Relations Dept.
Siyapatha
Finance PLC
Executive Director/
Corporate
Credit Dept.
DGM
Credit
Corporate
Corporate AGM Corporate
Finance Dept. Finance
Sampath
GOVERNANCE STRUCTURE
Centre Ltd
Credit Supervision Unit AGM Special Projects &
Syndications
Foreign Currency Banking

Unit AGM FCBU
(Pvt) Ltd
SC Securities
Marketing Dept.
Board of Directors - Subsidiaries

Deposit
Mobilisation Dept.
Deposit
Snr DGM
Marketing
Digitalisation,
Mobilisation &
Sales Unit
Sampath
Technology
Information
Solutions Ltd
Trade Services Dept.
AGM International
International Operations Banking
Banking
Snr DGM
Dept.
International
Card Centre AGM Card Centre
IT Electronic Data
Processing Dept.
Shareholders
Data Warehouse AGM IT EDP

Managing Director
Board of Directors - Bank
Data Governance Unit

AGM IT
Chief
Officer
Managing Director - Designate
Information
IT Systems
Development Dept. AGM IT Systems
Remittances Dept.
AGM Inward
Bank Notes Operations Dept. Remittance/KPO/BNO
& Katunayake Pay Office
Customer Care Centre
Legal Dept. Chief Legal Officer

External Auditors
Board Sub Committees
Loan Disbursement Unit

Legal
Credit Administration Dept.

Snr DGM
Recoveries &
Credit Admin,
Credit Control,
Recoveries Dept.
AGM Recoveries
Credit Control Unit
Human Resources Dept.
Committee
Board Audit
Sampath Learning
Academy
Chief
HR Officer
Corporate
Sustainability Dept.
Committee
Board HR &
Remuneration
Strategic Planning Dept. AGM Planning
Chief
Officer
Strategy
Board
Bancassurance Dept.
Committee
Nomination
Central Credit
Documentation Unit
AGM Branch Banking
Risk
Board
Business Support Centre
Integrated
Committee
Management
Branch Network
Credit Processing Unit
Board
AGM Branch Banking
Review
DGM
Committee
Banking
Transactions
Related Party
& Branch
Operations
Lending Products Dept.
Branch Support Unit
Committee
Board Credit
Operations & BPR Dept.
Network Services Centre

AGM Operations
Board
Planning
Strategic
Committee
Central Cash Dept.
Central Branch
Operations Unit
Board
Relations
Committee
Shareholder
Treasury Front Office

AGM Treasury
Treasury Investments &
PDU Dept.
Board
Treasury
Committee
Logistics, Premises &

Engineering Depts.
Myanmar
Representative Office
Board
Marketing
Committee
Compliance Dept.
Risk Management Dept. &

Chief
Treasury Middle Office
Risk Officer
Board IT
Committee
Systems Audit Dept.
Internal Audit
AGM Internal Audit
Chief
Dept.
Auditor
Internal
Planning
Committee
Board Capital
Company Secretary’s
Office Company Secretary
Information Security Dept. Chief Information

Security Officer
BOARD OF DIRECTORS
GRI 2-9,11
Harsha Amarasekera, President’s Counsel Nanda Fernando Rushanka Silva

Chairman Managing Director Deputy Chairman
BNC BSPC BSRC BMC BCPC BIRMC BCC BSPC BSRC BTC BMC BITC BCPC BNC BCC BSPC BSRC BMC BITC BCPC
Appointed as Non-Independent, Appointed as Executive Director with effect Appointed as Non-Independent,

Non-Executive Director on 18th August 2020 from 13th September 2016 Non-Executive Director on
Chairman of the Board of Directors with Expertise 1st September 2017
effect from 30th August 2020 Deputy Chairman of the Board of Directors
Banking, Marketing Management
Expertise with effect from 24th September 2020
Qualifications Expertise
Law
� Masters of Business Administration Business Management, Finance
Qualifications
specialised in Marketing from Sikkim
� Attorney-at-Law of the Supreme Court Qualifications
Manipal University, India
of Sri Lanka � Masters of Business Administration
� Senior Fellow Member of the Institute
� President’s Counsel from University of Western Sydney,
of Bankers of Sri Lanka
Australia
Current Appointments Current Appointments
� Associate Member of the Chartered
Non-Executive Chairman Managing Director Institute of Management Accountants,
Sampath Bank PLC Sampath Bank PLC UK (ACMA)
Non-Executive, Independent Chairman Director � Alumnus of Harvard Business School,
Vallibel One PLC Lanka Financial Services Bureau Ltd
USA
CIC Holdings PLC LankaBangla Finance Limited
Royal Ceramics Lanka PLC Institute of Bankers of Sri Lanka Current Appointments
Vallibel Power Erathna PLC Chairman
Swisstek (Ceylon) PLC Braybrooke Residential Properties (Pvt) Ltd
Swisstek Aluminium Limited Braybrooke Residential Towers (Pvt) Ltd
CIC Agri Businesses (Pvt) Ltd Indra Hotels and Resorts Kandy (Pvt) Ltd
Non-Executive, Independent Director Deputy Chairman
Expolanka Holdings PLC Sampath Bank PLC
Hayleys Leisure PLC Siyapatha Finance PLC
Ambeon Capital PLC
Managing Director
Non-Executive Director Indra Traders (Pvt) Ltd
Link Natural Products (Pvt) Ltd
Ceylon Hotels Holdings (Pvt) Ltd Director
The Hill Club Company Ltd Indra Motor Spares (Pvt) Ltd
Galle Face Management Company (Pvt) Ltd Indra Property Development (Pvt) Ltd
Millennium Airlines (Pvt) Ltd Sampath Centre Limited
Millennium Investments Lanka (Pvt) Ltd
Silver Aisle (Pvt) Ltd

Dilip de S Wijeyeratne Aroshi Nanayakkara Sanjiva Weerawarana

Senior Independent Director Independent, Non-Executive Director Independent, Non-Executive Director
BAC BHRRC BNC BIRMC BSPC BTC BCPC BHRRC BNC BIRMC BSPC BTC BMC BITC BAC BIRMC BRPTRC BSPC BITC
Appointed as Non Independent, Appointed as Non-Independent, Appointed as Independent,

Non-Executive Director on Non-Executive Director on 30th May 2019 Non-Executive Director
13th November 2018 Independent Director with effect from with effect from 1st June 2019
Independent Director with effect from 27th June 2019 Expertise
8th August 2019 Expertise Information Technology
Senior Independent Director with effect
Human Capital and Engagement, Corporate
from 6th May 2022 Qualifications
Strategy, Banking and Finance
Expertise � PhD in Computer Science from Purdue
Qualifications
Banking, Finance, Risk Management & University, USA
Compliance, Investment Banking and � BSc. in Management from the
Current Appointments
Treasury Massachusetts Institute of Technology,
USA Independent, Non-Executive Director
Qualifications Sampath Bank PLC
� MSc. In Management from London
� Graduate Member of the Australian Chief Executive Officer
School of Economics, UK
Institute of Company Directors WSO2
� ACMA and CGMA qualifications from
� Associate Member of the Institute of Chairman & Director
the Chartered Institute of Management
Chartered Accountants of Sri Lanka Avinya Foundation
Accountants, UK
(ACA)
Chairman
� Fellow Member of the Chartered Current Appointments Lanka Software Foundation
Independent, Non-Executive Director Lanka Data Foundation
Institute of Management Accountants,
Sampath Bank PLC
UK (FCMA) Director
Asian Hotels & Properties PLC
Current Appointments S.A.S. Engineering (Private) Limited
Chief Executive Officer
Senior Independent Director
Global Consulting Company
Sampath Bank PLC
Senior Vice Chair and Director
Independent, Non-Executive Director
Sri Lanka Institute of Directors
Singer (Sri Lanka) PLC
Regnis (Lanka) PLC Chairperson
Singer Industries (Ceylon) PLC Women Corporate Directors Sri Lanka
Hayleys Fibre PLC Chapter (WCD)
Women Directors Forum of the Sri Lanka
Institute of Directors

BOARD OF DIRECTORS
Vajira Kulatilaka Keshini Jayawardena Vinod Hirdaramani

Independent, Non-Executive Director Independent, Non-Executive Director Independent, Non-Executive Director
BHRRC BRPTRC BCC BSPC BTC BITC BCPC BHRRC BNC BRPTRC BCC BSPC BSRC BITC BHRRC BNC BCC BSPC BTC BMC
Appointed as Independent, Non-Executive Appointed as Independent, Non-Executive Appointed as Independent, Non-Executive

Director with effect from 25th June 2020 Director with effect from 1st October 2020 Director with effect from 16th February 2021
Expertise Expertise Expertise
Engineering, Banking and Finance, Law, Banking Business Management
Investment Banking and Treasury
Qualifications Qualifications
Qualifications � BSc. (Econ) in International Relations � BA degree from the Northwestern
� BSc. in Civil Engineering (First Class from the London School of Economics University, USA
Honours), University of Moratuwa and Political Science, UK � Alumnus of Harvard Business School, USA
� MEng. in Industrial Engineering and � Solicitor of the Supreme Court of
Management from Asian Institute of England and Wales from the College of
Technology, Thailand Independent, Non-Executive Director
Law, UK
Sampath Bank PLC
� Chartered Financial Analyst (CFA) from
Institute of Chartered Financial Analysts, Executive Director
Independent, Non-Executive Director Hirdaramani Leisure Holdings (Private) Limited
USA
Sampath Bank PLC Hirdaramani Apparel Holdings (Private) Limited
� Fellow Member of the Chartered Hirdaramani Investment Holdings (Private) Limited
Associate Consultant
Institute of Management Accountants, Hirdaramani International Exports (Private) Limited
Bridge Partnership, UK
UK (FCMA) The Centre for Inclusive Leadership, UK Hirdaramani (Private) Limited
Hirdaramani Power (Private) Limited
Current Appointments Hirdaramani Mercury Apparel (Private) Limited
Independent, Non-Executive Director HI Fashion Holdings (Private) Limited
Sampath Bank PLC C K T Apparel (Private) Limited
Printcare PLC Ceylon Knit Trend (Private) Limited
Panasian Power PLC Long Island Clothing Company (Private) Limited
Hemas Hospitals (Pvt) Ltd (w.e.f. 01.01.2023) The Island Watch Company (Private) Limited
Rosewood (Private) Limited
Zenith Insurance Brokers (Private) Limited
BAC Board Audit Committee Union Residencies (Private) Limited
BHRRC Board Human Resources & Remuneration Committee Mandalay (Private) Limited
BNC Board Nomination Committee Vinik (Private) Limited
BIRMC Board Integrated Risk Management Committee
BRPTRC Board Related Party Transactions Review Committee Non-Independent, Non-Executive Director
BCC Board Credit Committee Windforce PLC
BSPC Board Strategic Planning Committee
BSRC Board Shareholder Relations Committee
BTC Board Treasury Committee
BMC Board Marketing Committee
BITC Board IT Committee
BCPC Board Capital Planning Committee

Hiran Cabraal Ajantha de Vas Gunasekara Lasantha Senaratne

Independent, Non-Executive Director Executive Director/Chief Financial Officer Company Secretary
BAC BIRMC BRPTRC BSPC BSRC BTC BSPC
Appointed as Independent, Non-Executive Appointed as Executive Director with effect Appointed as the Company Secretary with
Director with effect from 30th June 2022 from 29th October 2020 effect from 1st February 2019
Expertise Expertise Expertise
Financial Crime Compliance, Risk Banking, Finance and Insurance Banking, Law, Compliance
Management, Investment Banking and
Qualifications Qualifications
Treasury
� Fellow Member of the Institute of � Attorney-at-Law of the Supreme Court
Qualifications
Chartered Accountants of Sri Lanka of Sri Lanka
� BSc. in Economics (Agricultural and
(FCA) � Senior Fellow Member of the Institute
Resource Economics) University of
� Associate Member of the Association of of Bankers of Sri Lanka
Maryland at College Park, USA
Chartered Certified Accountants of UK � Degree of Bachelor of Laws (LL.B) from
Current Appointments (ACCA) University of Colombo
Independent, Non-Executive Director � Fellow Member of the Certified � Master of Laws (LL.M) from University of
Sampath Bank PLC Management Accountants of Sri Lanka Colombo
Senior Banking Consultant to (FCMA)
� Masters of Business Administration
PWC Consulting (Vietnam) Limited
Current Appointments (MBA) from University of Colombo
Managing Director
Executive Director/Chief Financial Officer � International Diploma in Governance,
HSVC (Vietnam) Company Limited
Sampath Bank PLC Risk and Compliance (GRC) from
Director
University of Manchester, UK
Affno Virtual Market Pte. Ltd. (Singapore and
Sri Lanka) � Associate Member of the Institute of
Chartered Corporate Secretaries of Sri
Lanka
Appointed as the Assistant Company
Secretary with effect from 1st February 2019
Expertise
Banking, Law
Qualifications
� Attorney-at-Law of the Supreme Court

of Sri Lanka
� Advance Post Attorney Diploma in
Banking, Finance and Insurance Laws
Muditha Walpola
Assistant Company Secretary

CORPORATE MANAGEMENT
Nanda Fernando Ayodhya Iddawela Perera Ajantha de Vas Gunasekara

Managing Director Managing Director - Designate Executive Director/
Tharaka Ranwala Shashi Kandambi Jassim Ajith Salgado Manoj Akmeemana

Senior Deputy General Manager - Senior Deputy General Manager - Chief Information Officer Senior Deputy General Manager -
Digitalisation, Deposit Mobilisation International Banking Credit Control, Credit Administration,
& Marketing Recoveries & Legal
Scan this QR code to view our whole leadership team

including Chief Managers and Senior Managers
www.sampath.lk

Amal Kirihene Sanjaya Gunawardena Charitha Jayawickrama

Deputy General Manager - Chief Strategy Officer Chief Internal Auditor
Corporate Credit
Deepal De Silva Lalith Weragoda

Deputy General Manager - Chief Human Resource Officer
Operations & Branch Banking
Rajendra Ranasinghe Prassantha De Silva Dulsiri Jayasinghe

Assistant General Manager - Assistant General Manager - Assistant General Manager -
Inward Remittance/KPO/BNO Treasury Special Projects & Syndications

CORPORATE MANAGEMENT
Ananda Wijitha Pasan Manukith Lasantha Senaratne

Assistant General Manager - Assistant General Manager - Company Secretary
Chief Information Security Officer Information Technology
Senaka Hewavitharana Shiran Kossinna Kusal De Silva

Chief Legal Officer Assistant General Manager - Assistant General Manager -
Recoveries Corporate Finance
Dushyantha Dassanayake Chatura Rudesh Janaka Jayasuriya

Information Technology - Systems FCBU Branch Banking

Kumari Jayasuriya Halin Hettigoda Udara Suraweera

Branch Banking International Banking Operations
Kasun Ratnayake Darshin Pathinayake Thushara Jayathunga

Chief Risk Officer Assistant General Manager - Assistant General Manager -
Card Centre Information Technology -
Electronic Data Processing
Asanka Liyanage Sachithri Fernando Gayani Jinadasa

Internal Audit Planning Finance

BOARD AUDIT COMMITTEE REPORT

GRI 2-24
REGULATIONS/RULES RELEVANT TO THE FUNCTIONS OF THE COMMITTEE
The role, functions and the composition of the Committee are defined by the
provisions of the:
� Banking Act Direction No. 11 of 2007 on Corporate Governance for Licensed
Commercial Banks issued by the Central Bank of Sri Lanka (the Direction),
� Section 7.10 of Listing Rules of the Colombo Stock Exchange (the “CSE Rules”),
� Code of Best Practice on Corporate Governance 2017 issued by the Institute of

Chartered Accountants of Sri Lanka (CA Sri Lanka).
COMMITTEE MEMBERSHIP DURING THE YEAR 2022
Board Member Directorship Status Membership Attendance (Attended/

Status Eligible to Attend)
Dilip de S Wijeyeratne Mr Dilip de S Wijeyeratne Independent/Non-Executive Chairman 14/14

Chairman Dr Sanjiva Weerawarana Independent/Non-Executive Member 13/14
“Being a main pillar of Sampath Bank’s (for the period of 06.05.2022 -
01.08.2022) Independent/Non-Executive Member 3/3
Corporate Governance framework, the Mr Hiran Cabraal
Board Audit Committee continued with (w.e.f. 01.08.2022) Independent/Non-Executive Member 8/8
efforts to strengthen the Bank’s internal Mr Deshal de Mel
(Until 06.05.2022) Independent/Non-Executive Member 4/4
control environment.”
Refer pages 182 to 185 for the profiles of the Committee members.
Regular attendees to the Committee meetings by invitation: Diversity of Expertise

No. of Directors
� Managing Director
1
� Executive Director/Chief Financial Officer 2
� Chief Internal Auditor (CIA) 1
� External Auditors
� Consultant to the Committee - Mrs
Ranjani Joseph, Partner KPMG 2
* The Company Secretary functioned as the � Members of Senior Management on Banking and Finance
Secretary to the Committee and in his absence, a Information Technology
need basis Risk Management & Compliance
nominee appointed by the Company Secretary or
Investment Banking & Treasury
CIA functioned as the Secretary to the Committee
* an individual Director may represent more than
during the year under review.
one discipline
KEY ACHIEVEMENTS FOR 2022
During the year 2022, the country concessions to affected borrowers achievement of the Bank’s strategic
witnessed an unprecedented including a further extension of the debt objectives under the prevailing
confluence of challenges owing to the moratorium. circumstances.
economic crisis, political instability, fuel
and energy shortages and the depletion Being a main pillar of the Bank’s Over the years, the Committee has
of foreign exchange reserves. Given the corporate governance framework, the systematically increased its focus on
severity of these challenges and their Board Audit Committee continued with cyber security controls in light of
adverse impact on businesses and efforts to strengthen the internal control increasing cyber threats due to high
individuals, the CBSL proceeded to offer environment to support the volume of tech-based transactions.

Financial Reporting considered the outcome of various The Letter of Representation issued to
As part of its responsibility to oversee stress testing techniques used when the External Auditors by the
the Bank’s financial reporting process building the management overlay management was also reviewed by the
on behalf of the Board of Directors, the against the Bank’s lending portfolio and Committee.
Committee reviewed and discussed with assessing the adequacy of disclosures
the Management, the Consultant to the made by the management. Financial Statements were reviewed
Board Audit Committee and the External with the External Auditor, who is
Auditors, the Quarterly and the Annual External Auditors responsible for expressing an opinion
Financial Statements of the Bank, prior The Committee reviewed and monitored on its conformity with the Sri Lanka
to their release. The review considered the independence and objectivity of the Accounting Standards. The Committee
several factors including the quality, External Auditors and also assessed the also met the Auditors to review the
appropriateness and acceptability of effectiveness of their audit process Management Letter with the responses
current accounting policies and considering the relevant professional from the Management.
practices, along with the clarity of and regulatory requirements. To ensure
that the Auditors had the independence The Committee conducted its annual
existing disclosures and the extent of
to discuss and express their opinions on review of the non-audit services policy in
compliance with financial reporting
any matter, they were granted a further order to ensure that the independence
standards, such as that specified under
opportunity to meet the Audit and objectivity have not been impaired
the Companies Act No. 7 of 2007, the
Committee separately, without the by providing such non-audit services.
Banking Act No. 30 of 1988 and any
presence of any Executive Directors. The non-audit services policy is a Board
other relevant financial and governance
approved policy that sets out guidelines
reporting requirements. In particular,
The Committee discussed with the for the engagement of external auditors
the Committee reviewed the extent to
External Auditors on their audit plan, for non-audit services in line with
which the Bank complies with the CBSL
scope and the methodology they regulatory requirements and the
Directives No. 13 of 2021 and No. 14 of
propose to adopt in conducting the Committee makes recommendations to
2021 on Classification, Recognition and
annual audit, prior to commencement the Board of Directors in respect of this
Measurement of Credit Facilities &
of the audit for financial year 2022. Policy.
Other Financial Assets in Licensed
Banks, that came into effect from 1st There was no limitation of scope and the
Management has fully provided all Internal Control Over Financial
January 2022. To facilitate the review,
information and explanations requested Reporting (ICOFR)
the Committee considered reports
submitted by the Executive Director/ by the Auditors. The Bank is required to comply with
Chief Financial Officer as well as reports Section 3(8)(ii)(b) of the Banking Act
from the Internal and External Auditors The Committee ensured that the Direction No. 11 of 2007 and assess the
on their audit findings. engagement of the Audit Partner does effectiveness of Internal Control Over
not exceed five years and that the Financial Reporting. The Committee
As described above, the Committee also particular Audit Partner is not reassessed the effectiveness of the Bank’s
assessed the uncertainties and the engaged for the audit before the expiry system of Internal Control Over Financial
resultant implications thereon, of three years from the date of the Reporting as of 31st December 2022
cascading from the prolonged economic completion of the previous term. based on the criteria set out in the
impact of COVID-19 as well as prevailing Guidance for Directors of Banks under
macro-economic challenges and their The Committee has recommended to “The Directors’ Statement of Internal
collective impact on Sampath Bank’s the Board that Messrs Ernst and Young, Control”, issued by the CA Sri Lanka in
financial reporting process. Accordingly, Chartered Accountants, be re-appointed 2010.
the Committee reviewed the key for the financial year ending 31st
assumptions used for the ‘expected December 2023, subject to the approval The Internal Controls Over Financial
credit loss’ impairment computations as of shareholders at the 37th Annual Reporting Steering Committee
at the end of each quarter, prior to the General Meeting. comprising the Chief Internal Auditor
publication of the Quarterly Financial (Chairperson), Executive Director/Chief
Statements. In doing so, the Committee Financial Officer, Chief Risk Officer, Chief

BOARD AUDIT COMMITTEE REPORT
Information Security Officer and Chief Internal Audit Bank of Sri Lanka, the Annual Corporate
Compliance Officer assisted the Internal During the year, the Board Audit Governance Report for 2022 is provided
Audit Department in conducting its Committee continued to fulfil its on pages 432 to 446. The External
evaluations on the Internal Control Over mandate to monitor and review the Auditors of the Bank have performed
Financial Reporting and Management scope, extent and effectiveness of the procedures set out in Sri Lanka Related
Information Systems. In this regard, activities of the Bank’s Internal Audit Services Practice Statement 4750 issued
assessment were carried out by the Department, including review of the by the CA Sri Lanka (SLRSPS 4750), to
Internal Audit Department to determine progress made on Audit activities and meet the compliance requirement of the
if documented procedures were being achievements against the Bank’s Audit said Corporate Governance direction.
followed by the respective process Plan. The Committee reviewed the Their findings presented in their report
owners and to ensure the design Internal Audit Plan and monitored its dated 17th February 2023 addressed to
effectiveness and the operating implementation through regular the Board, are consistent with the
effectiveness of the Internal Controls communication with the Chief Internal matters disclosed above and no
and the Management Information Auditor. inconsistencies have been identified in
Systems and as well as to identify areas this regard.
for improvements on an ongoing basis. The Committee reviewed all major
Additionally, more emphasis was given findings revealed through audit Whistleblowing
to understanding changes to the control investigations and potential fraud The Bank’s Whistleblowing Policy
environment in light of the ongoing monitoring activities carried out during continued to be implemented as a
external challenges. the year. component of the Corporate Fraud Risk
Management Framework. The Policy
Based on the assessments carried out With new remote work systems applied allows any team member who has a
by the Internal Auditors and External during the year in response to the legitimate concern on an existing or
Auditors, the Board has concluded that, ongoing challenges in the country, potential “wrong doing” by any person
as of 31st December 2022, the Bank’s greater focus was assigned to ensure within the Bank to come forward
system of Internal Control Over Financial robust controls are in place to protect voluntarily and bring such concern to the
Reporting is effective. The Directors’ data and maintain customer privacy, and notice of the Chairman of the Board
Statement on the Bank’s Internal Control confidentiality. Audit Committee either through the
Over Financial Reporting is provided on Company Secretary or Chief Internal
pages 232 and 233. The Committee also reviewed the Auditor. Concerns raised are investigated
resource requirements of the Internal as per the standard procedure and the
The Bank’s External Auditors have Audit Department. The performance identity of the person raising the concern
assessed the effectiveness of the existing evaluation of the Chief Internal Auditor is kept confidential. The Whistleblowing
system of Internal Control Over Financial and the senior staff members of the Policy was reviewed by the Committee
Reporting and have provided assurance Internal Audit Department for the year during the year 2022 with
report to the Board that nothing has 2022 will be carried out by the recommendations made to further
come to their attention that causes them Committee during the first quarter of strengthen the policy as a communication
to believe that financial reporting was 2023. channel to raise any genuine concerns.
inconsistent with their understanding of
the processes adopted by the Board for Annual Corporate Governance
reviewing the design and effectiveness of Report
the internal control system of the Bank.
As required by Section 3(8)(ii)(g) of the
The External Auditors’ Assurance Report
Banking Act Direction No. 11 of 2007, on
on the Bank’s systems of Internal Control
Corporate Governance for Licensed
Over Financial Reporting is provided on
Commercial Banks issued by the Central
page 234.

KEY RESPONSIBILITIES OF THE � Assessing the independence and REPORTING TO THE BOARD
COMMITTEE reviewing the adequacy of the scope, The Minutes of the Committee meetings
functions and resources of the were tabled at Board meetings thereby
� Reviewing financial information and
Internal Audit Department, including providing Board members with access to
monitoring the integrity of the
the appointment of the Chief Internal the deliberations of the Committee.
financial statements of the Bank, its
Auditor and the performance of the
annual report, accounts and quarterly
Head and senior staff members of the PROFESSIONAL ADVICE
reports prepared for disclosure, prior
Internal Audit Department.
to submission to the Board and The Committee has the authority to seek
ensure compliance with statutory � Overseeing the appointment, external professional advice from time to
provisions, accounting standards and compensation, resignation and time on matters within its purview. During
accounting policies. dismissal of the External Auditors, the year, several consultations were
including review of the External Audit sought with various professionals, on
� Reporting to the Board on the quality,
function, its cost and effectiveness matters under the Committee’s purview.
appropriateness and acceptability of
and monitoring of the External
the Bank’s accounting policies and
Auditors’ independence and/or PERFORMANCE EVALUATION OF THE
practices.
objectivity. COMMITTEE
� Assessing the reasonableness of the The annual self-evaluation of the
� Reviewing the adequacy and
underlying assumptions based on Committee was conducted at year-end by
effectiveness of the Internal Controls,
which estimates and judgments are the members of the Committee with the
Risk Management and ensure
made when preparing the financial evaluation indicating that its performance
compliance with Corporate
statements. was effective.
Governance and regulatory
� Overseeing the Internal Audit function requirements.
and reviewing of audit reports to On behalf of the Board Audit Committee,
� Reviewing the Terms of Reference
ensure that appropriate actions are
(TOR) of the Committee periodically
taken by the Management to
and ensuring that it reflects the best
implement the recommendations
practices of the industry at all times.
made by the Internal Auditors.
DILIP DE S WIJEYERATNE
Chairman - Board Audit Committee
17th February 2023

Colombo, Sri Lanka

BOARD HUMAN RESOURCES AND

REMUNERATION COMMITTEE REPORT
GRI 2-19,20,24
provisions of the:
� Section 7.10 of Listing Rules of the Colombo Stock Exchange (the “CSE Rules”),


Aroshi Nanayakkara Ms Aroshi Nanayakkara Independent/Non-Executive Chairperson 7/7

Mr Dilip de S Wijeyeratne Independent/Non-Executive Member 6/7
Chairperson
Mr Vajira Kulatilaka Independent/Non-Executive Member 7/7
“During the year under review, BHRRC’s Mr Vinod Hirdaramani Independent/Non-Executive Member 6/7
focus was more insular – that of Mrs Keshini Jayawardena
(w.e.f. 01.08.2022) Independent/Non-Executive Member 2/2
supporting team Sampath navigate a
Mr Deshal de Mel
highly volatile economic landscape - (Until 06.05.2022) Independent/Non-Executive Member 2/2
while at the same time taking bold steps
to lay the foundation for future growth
of its people.” Diversity of Expertise
No. of Directors
1 1
Regular attendees to the Committee meetings by invitation:
� Managing Director 1 4
� Chief Human Resource Officer
1 1
� Chief Manager - Human Resources
Human Capital and Engagement
Banking and Finance
Engineering
Business Management
* The Company Secretary functioned as the Secretary to the Committee and in his absence, a nominee appointed Law
by the Company Secretary functioned as the Secretary to the Committee during the year under review. Treasury & Investment Banking
Risk Management & Compliance
one discipline
The Bank engaged a globally recognised To further strengthen the performance- The Key Performance Indicators of the
consultancy firm to conduct an HR based work culture of the Bank, the MD and Key Management Personnel
diagnostic study in order to ensure the Committee approved the rollout of a new were agreed at the beginning of the
HR operations, policies, and processes Performance Management System linked financial year in line with the Bank’s
are on par with global standards. Based with a robust Performance Based Bonus Strategic Plan and their performance
on the recommendations given by the Scheme with the consultation of a assessed at the end of the year. Based on
consultants, action plans were developed recognised international consultancy this, remuneration and salary structures
to enhance the status of the respective firm. were reviewed and finalised.
areas under the direction of the BHRRC.

The Human Resources related policies gardening, a special bus service as well as and providing special Leadership Training
and procedures as well as strategic HR cycling to work. at different levels of management have
initiatives were reviewed with the objective been noteworthy endeavours this year to
of enhancing the team’s capabilities, The succession planning process was enhance the female leadership pipeline
compliance and engagement. further streamlined with the direction of for the Bank. In this effort of giving due
the Committee to identify the second and recognition to female role models, the
The Committee also kept abreast of the third tier of leaders among the Bank’s circle of activities were expanded even to
dynamic changes that continued to unfold executive cadre. include the customers of the Bank where
during the year in order to respond to the special events were held during the
challenges posed by the COVID-19 The implementation of the new HRIS International Women’s month of March.
pandemic and the economic crisis. A host system was closely monitored in order to
of benefits were offered to team members ensure roll out completion on agreed In recognition of 25+ years of service of
during these difficult times, first to tide dates as well as smooth transitioning to team members, the Committee
over the pandemic and then to manage the new system. authorised the 25 Years’ Service Awards
the economic hardships encountered. 2021, with the annual award ceremony
These included health related activities, Initiating Bank-wide programmes to being conducted to recognise the long-
novel work from home options, home motivate and recognise female employees standing service of team members.
KEY RESPONSIBILITIES OF THE � Recommending and keeping under REPORTING TO THE BOARD
COMMITTEE review, the Human Resources The Minutes of the Committee meetings
� Formulating remuneration policies Strategy including key HR Objectives, were tabled at Board meetings, thereby
relating to Directors, CEO/MD and Key Plans and workforce requirements in providing the Board members with access
Management Personnel (KMP) and line with the overall annual/medium- to the deliberations of the Committee.
submitting the same for the approval term strategic objectives of the Bank
of the Board. and monitoring implementation of PERFORMANCE EVALUATION OF THE
the same. COMMITTEE
� Identifying goals and targets for the
Directors, CEO/MD and Key � Reviewing, commenting and reporting The annual self-evaluation of the
Management Personnel and to the Board on HR related matters Committee was conducted at year-end by
submitting the same for the approval including development plans, talent the members of the Committee with the
of the Board. retention and career development of evaluation indicating that its performance
potential successors. was effective.
� Evaluating the performance of the
CEO/MD and Key Management � Monitoring and making all necessary
On behalf of the Board Human Resources
Personnel against set targets and recommendations to the Board on
and Remuneration Committee,
goals periodically and submitting the ethical standards with regard to
same to the Board, together with human capital and ensuring that the
recommendations for the revision of management has institutionalised a
remuneration, benefits and other process to ensure compliance with
performance-based incentives. these standards. AROSHI NANAYAKKARA
� Keeping the provisions of the Bank’s Chairperson - Board Human Resources and
� Recommending to the Board such
Pension Plan under review. Remuneration Committee
amendments to its scope as may, in
its view be desired, to achieve better � Assessing the performance of the 17th February 2023
corporate governance objectives. Committee based on the Colombo, Sri Lanka
� Advising the KMP heading the Human requirements.
Resources Department of the Bank � Reviewing the Terms of Reference
with regard to revision of salaries of (TOR) of the Committee periodically
Bank staff and any major and ensuring that it reflects the best
organisational changes needed for practices of the industry at all times.
the Bank’s purpose.

BOARD NOMINATION COMMITTEE REPORT

GRI 2-10,24
provisions of the:

Chartered Accountants of Sri Lanka.

Mr Dilip de S Wijeyeratne Independent/Non-Executive Chairman 7/7

(w.e.f. 06.05.2022)
Dilip de S Wijeyeratne Mr Rushanka Silva Non-Independent/Non-Executive Member 7/7
Chairman Mr Harsha Amarasekera Non-Independent/Non-Executive Member 7/7
Mrs Keshini Jayawardena Independent/Non-Executive Member 7/7
Mr Vinod Hirdaramani Independent/Non-Executive Member 4/4
“In order to ensure the required balance (w.e.f. 06.05.2022)
Ms Aroshi Nanayakkara Independent/Non-Executive Member 2/2
of skills, knowledge, experience and (w.e.f. 01.08.2022)
independence is in place for Board of Mr Deshal de Mel Independent/Non-Executive Chairman 3/3
Directors and Committees, four BHRRC (Until on 06.05.2022)
Committee members from diverse Refer pages 182 to 185 for the profiles of the Committee members.
business backgrounds were appointed to
represent the BNC”.
Diversity of Expertise
Regular attendees to the Committee meetings by invitation: No. of Directors
1 1
1
2
� Managing Director 1
(invited when required)
Banking and Finance

Business Management
by the Company Secretary functioned as the Secretary to the Committee during the year under review. Human Capital and Engagement
Treasury & Investment Banking
Risk Management & Compliance
one discipline
Mr Hiran Cabraal, a seasoned banker Reviewed the structure, skills and the Identified the required skill gaps at Board
with a rich and diverse experience and composition of the Board and its level and recommended suitable
international record of accomplishment Committees on an ongoing basis and candidates to fill such vacancies.
in leadership roles, was appointed to the made recommendations to the Board as
Sampath Bank Board on the appropriate. Reviewed the Re-designation of Officers
recommendation of Board Nomination holding Group positions and
Committee to fill the casual vacancy on responsibilities.
the Board.

KEY ACHIEVEMENTS FOR 2022 � Review the Terms of Reference (TOR)

of the Committee periodically, to
Succession Planning Training ensure that it reflects industry best
� Reviewed the succession for Key � As per the recommendations of the practices at all times.
Management Personnel and Committee, a comprehensive
Directors. training programme was arranged REPORTING TO THE BOARD
in coordination with an The Minutes of the Committee meetings
� Assessed the adequacy of the
industry expert specifically for were tabled at Board meetings, thereby
expertise available at Corporate
Non-Executive Directors, while the providing Board members with access to
Management level.
induction programme for newly the deliberations of the Committee.
� Specifically discussed Succession appointed Directors was also
Plans for critical positions of the further enhanced. PERFORMANCE EVALUATION OF THE
Bank and reviewed potential COMMITTEE
candidates for the roles.
The annual self-evaluation of the
Committee was conducted at year-end by
the members of the Committee with the
evaluation indicating that its performance
KEY RESPONSIBILITIES OF THE � Set the eligibility criteria including was effective.
COMMITTEE qualifications, experience and key
� Implement a procedure to select/ attributes required to be considered On behalf of the Board Nomination
appoint new Directors, CEO/MD and for appointment or promotion for the Committee,
Key Management Personnel. positions of MD and the Key
Management Personnel.
� Consider and recommend the re-
election of current Directors, taking � Ensuring that Directors, MD and Key
Management Personnel are fit and DILIP DE S WIJEYERATNE
into account the performance and
contribution made by the Director proper persons to hold office as per Chairman - Board Nomination Committee
concerned towards the overall the criteria specified under Statutory
discharge of the Board’s and Regulatory requirements. 17th February 2023
responsibilities. Colombo, Sri Lanka
� Consider and recommend the
� To ensure an updated procedure is in requirements of additional expertise
place for the selection, appointment and the succession arrangements for
and re-election of Directors to the retiring Directors and Key
Board with due consideration to their Management Personnel from time to
fitness and propriety and ensuring time.
their qualifications, competencies and
independency are in line with the
statutory provisions.

BOARD INTEGRATED RISK MANAGEMENT

COMMITTEE REPORT
GRI 2-24

provisions of the:

Mr Hiran Cabraal Independent/Non-Executive Chairman 4/4

(w.e.f. 01.08.2022)
Mr Dilip de S Wijeyeratne Independent/Non-Executive Member 6/7
Dr Sanjiva Weerawarana Independent/Non-Executive Member 5/7
Hiran Cabraal Ms Aroshi Nanayakkara Independent/Non-Executive Member 4/4
Chairman (w.e.f. 01.08.2022)
Mr Nanda Fernando Executive Member 7/7
Mr Deshal de Mel Independent/Non-Executive Chairman 2/2
“With a rich and diverse experience and a (Untill on 06.05.2022)
proven international track record in Mrs Keshini Jayawardena Independent/Non-Executive Invitee 1/1
(For the period of 06.05.2022 to
leadership roles, newly appointed
01.08.2022)
Chairman of the BIRMC brings with him a Mr Vinod Hirdaramani Independent/Non-Executive Chairman 1/1
wealth of strategic risk management (For the period of 06.05.2022 to
01.08.2022)
experience”.
Management Representatives:
Mr Kasun Ratnayake - Chief Risk Officer
Mr Sudharshana Jayasekera - Chief Compliance Officer
Regular attendees to the Committee meetings by invitation:
No. of Directors
� Chief Information Security Officer 2
� Management Representatives in 2
charge of Credit, Market, Liquidity,

1
Operational and Strategic Risks 2
1
1
* The Company Secretary functioned as the Secretary to the Committee and in his absence, a nominee appointed Risk Management & Compliance
Banking and Finance
by the Company Secretary functioned as the Secretary to the Committee during the year under review.
Information Technology
Human Capital and Engagement
Marketing Management
one discipline


The Committee discharged its � Conducted in-depth analysis to � Formulated the Recovery Plan of
responsibilities in compliance with its determine highly stressed sectors the Bank in accordance with the
Terms of Reference (TOR). Accordingly, affected by adverse economic Banking Act Direction No. 09 of
the Committee received regular reports conditions and advise the lending 2021.
on the Bank’s performance against the units to remain vigilant at the time
� Reviewed all risk related existing
established Risk Appetite Limits and Key of taking credit decisions.
policies.
Risk Indicators (KRI) from the Risk
� Special worst-case scenario stress
Management Department and Key � Carrying out Gap analyses on
tests were performed to gauge the
Performance Indicators (KPIs) from the Technology Risk Management and
impact of economic turmoil.
Compliance Department. The reports Resilience in line with the Banking
and the relevant background � Introduced new market risk limit Act Direction No. 16 of 2021 and
information have been reviewed in monitoring initiatives to strengthen ensuring necessary arrangements
depth and necessary risk mitigation the process. Introduction of are put in place to bridge the gap
measures have been initiated where Internal Limit Monitoring/Deleted within the stipulated time.
necessary, in order to maintain the Deal Analysis and Reporting/
� The Risk and Control Self-
Bank’s exposure to risk at prudent level Enhancement of daily SLAR
Assessment (RCSA) process was
and to facilitate compliance with reporting.
reviewed and further expanded.
regulatory requirements, while enabling � The Bank’s Credit, Operational and
� Established new KRIs for
the achievement of sound business Market Risk Appetite limits were
Information Security and introduced
results. reviewed.
a new limit framework for
� Special analysis on FX Net Open operational risk related KRIs.
� The Bank’s overall risk management
Position enhancements and its
scope was further strengthened by � Enhanced the scope and functional
effects.
amending the Credit Risk responsibilities of the IT risk
Management Policy and the Post � Reviewing the appropriateness of management unit as per the CBSL
Credit Risk Management Procedure Mark-to-Market (MTM) loss limits new regulatory framework.
as well as upgrading of the Stage of applicable for the trading portfolio
� Independent evaluation of
impairment relating to restructured vis-à-vis changing market
the existing AML (Anti-Money
and rescheduled facilities of the conditions and approving new
Laundering) system using industry
Bank in line with the Banking Act limits, including temporary
expertise to obtain assurance
Direction No. 13 of 2021. dispensation limits for MTM losses
regarding the adequacy of the
for the trading portfolio.
� Various actions were taken to system to respond to emerging
promote the Bank-wide risk culture � Reviewing the Liquidity contingency risks, legislative and regulatory
through the risk magazine, training funding plan giving due changes.
and knowledge sharing sessions. consideration to the stressed
� Commenced development work
market conditions and more
� Strengthening the borrower watch- on the goAML system in
frequent analyses of status of LCR
listing process under current compliance with the regulator
and High Quality Liquid assets.
economic crisis. recommendations.
� Monitoring the expiry and reviewing
� In-depth analysis of industries � Actions to mitigate enhanced Cyber
of Service Level Agreements (SLA)
under current economic context Security Risk due to the increased
along with content and conditions
with new sectors added to the adoption of Digital Channels
suitable to the present situation.
existing risk elevated industries. including regular review of the
� Create customer awareness on objectives and work assignments
� Enhanced the criteria for sample
cyber-attacks and IT risks. of the Chief Information Security
selection of ‘Loan Review
� Testing the efficacy of the Business Officer. The actions taken by the
Summaries’.
Continuity Plan (BCP) along with Information Security Department
business impact analysis to ensure was also discussed at the BIRMC.
resilience in stressed situations.
Reviewing of BCP and conducting of
timely BCP drills to assess the
situation and vulnerabilities.

BOARD INTEGRATED RISK MANAGEMENT

COMMITTEE REPORT
KEY RESPONSIBILITIES OF THE � Ensuring the existence of clear and � Ensure that there is clear and
COMMITTEE independent reporting lines, independent reporting lines,
� Assessing all risks faced by the Bank adequate tools, systems and responsibilities for the overall
including Credit, Market, Liquidity, resources for the successful business activities and risk
Operational and Strategic Risks on a management of risk and compliance management functions.
monthly basis through appropriate functions within the Bank.
risk indicators and management � Cultivate a pro-active risk management
information including updated � Reviewing and approving all policies culture within the Bank.
Business Continuity Plans. and public disclosures made under
CBSL directives related to Risk � Submit a report on high priority risks
� Reviewing the adequacy and Management, while recommending to the Main Board on a monthly basis.
effectiveness of all Management level the same for Board approval.
� Review the Terms of Reference (TOR)
committees such as the Credit Policy,
� Periodically reviewing the Bank’s risk of the Committee periodically, to
Risk and Portfolio Review Committee,
exposures while setting-up risk ensure that it reflects industry best
Asset and Liability Management
appetite/tolerance limits to support practices at all times.
Committee (ALCO) and the Risk and
Compliance Committee, in order to the Bank’s objectives, business
strategies and risk appetite, economic REPORTING TO THE BOARD
ensure specific risks are managed
within quantitative and qualitative risk and market conditions. The Minutes of the Committee meetings
limits as specified by the Committee. were tabled at Board meetings thereby
� Reviewing and formulating the providing the Board members with access
� Taking prompt corrective action to strategy and methodology for the to the deliberations of the Committee. The
mitigate the effects of specific risks in allocation of risk/economic capital, risk assessments were typically submitted
case such risks are at levels beyond including Internal Capital Adequacy to the Board within an adequate time
prudent levels decided by the Assessment Process (ICAAP) and period from each Board Integrated Risk
Committee, based on the Bank’s recommending the same for Board Management Committee meeting.
policies and regulatory, supervisory approval.
requirements, economic and market PERFORMANCE EVALUATION OF THE
� Engaging with external and COMMITTEE
conditions.
independent reviewers for validation
The annual self-evaluation of the
Referring to Bank’s Disciplinary of risk measurement methodologies
� Committee was conducted at year-end by
Committee regarding the officers and outputs as and when required.
the members of the Committee with the
responsible for failure to identify evaluation indicating that its performance
� Monitoring controls relating to
specific risks and recommend to take was effective.
“Information Security” and reviewing
prompt corrective measures against
the progress of the “Information
such officers. On behalf of the Board Integrated Risk
Security Committee” (ISC) on a
Management Committee,
� Establishing a compliance function quarterly basis.
and appointing a dedicated
� Set-up risk appetite/tolerance of the
Compliance Officer selected from Key
Bank at enterprise and strategic
Management Personnel who
business unit levels.
periodically assesses the Bank’s
compliance with the laws, regulations, HIRAN CABRAAL
� Maintain continued awareness of any
regulatory guidelines, internal controls Chairman - Board Integrated Risk
changes in the Bank’s risk profile.
and approved policies on areas of Management Committee
business operations and functionally
reports to the Committee on these 17th February 2023
matters.

BOARD RELATED PARTY TRANSACTIONS

REVIEW COMMITTEE REPORT
GRI 2-15,24

provisions of the:
� Code of Best Practices issued by the Securities and Exchange Commission of
Sri Lanka (the “SEC Code”),
� Section 9 of Listing Rules of the Colombo Stock Exchange (the “CSE Rules”),

Vajira Kulatilaka
Mr Vajira Kulatilaka Independent/Non-Executive Chairman 4/4
Chairman Dr Sanjiva Weerawarana Independent/Non-Executive Member 2/4
“The Committee enhanced with a (w.e.f. 01.08.2022) Independent/Non-Executive Member 1/2
Mr Hiran Cabraal
rich and diverse experience by the (w.e.f. 01.08.2022) Independent/Non-Executive Member 2/2
appointment of Independent, Mr Dilip de S Wijeyeratne
Non-Executive Director who brings (Until 01.08.2022) Independent/Non-Executive Member 2/2
Mr Deshal de Mel
with him a wealth of strategic risk (Until 06.05.2022) Independent/Non-Executive Member 1/1
management experience.”
Regular attendees to the Committee meetings by invitation: No. of Directors
2 1
� Managing Director
1
� Executive Director/Chief Financial
Officer 1
1
� Chief Compliance Officer 1
Engineering
Information Technology
by the Company Secretary functioned as the Secretary to the Committee during the year under review. Risk Management & Compliance
Banking & Finance
one discipline
The Committee was strengthened by the The Committee undertook to further read and understood the applicable
appointment of Mr Hiran Cabraal, strengthen the existing internal regulatory requirements relating to
Independent/Non-Executive Director in procedure for handling of Related Party identifying, capturing and reporting of
view of the resignation of Transactions (RPT) by improving the RPT. To further complement these
Mr Deshal de Mel, Independent/ dissemination of information to all efforts, the process of capturing Related
Non-Executive Director, during the year relevant stakeholders and obtaining Parties of the Bank was also further
2022. their acknowledgements that they have enhanced.

BOARD RELATED PARTY TRANSACTIONS

REVIEW COMMITTEE REPORT
A summary report was submitted at the � A comprehensive list of Related Further, the Committee continued to
monthly Board Meeting monthly, Parties based on latest available provide oversight for improving training
disclosing all Related Party Transactions declarations signed by the and awareness among the Bank’s staff
reviewed by the Committee during the responsible Directors/KMPs. regarding Related Party Transactions. A
month. series of training programmes were
� Related Party Transactions
conducted across various departments/
confirmed by the Business Heads
In discharging the aforementioned business units.
to the Committee through the
responsibilities, the Committee relies
Company Secretary.
on the integrity of periodically
reportable Related Party Transactions
data sourced via,
KEY RESPONSIBILITIES OF THE � Ensure that appropriate mechanisms � Review the Terms of Reference (TOR)
COMMITTEE are in place to obtain declarations of the Committee periodically, to
� Ensure that the transactions with from all Directors at the time of joining ensure that it reflects industry best
Related Parties are identified by the the Board and annually thereafter, as practices at all times.
respective authorities of the Bank and well as for informing the Company
assure that the Bank does not engage Secretary - the primary contact point REPORTING TO THE BOARD
in such transactions in a manner that for Directors to disclose any existing The Minutes of the Committee meetings
would grant a “More Favourable or potential RPT carried out by them were tabled at Board meetings thereby
Treatment” than that accorded to or their Close Family Members and in providing Board members with access to
other constituents of the Bank such instances obtaining further the deliberations of the Committee.
carrying on the same business. declarations on a quarterly basis.
� Taking all necessary steps to avoid any � Reviewing the processes and the PERFORMANCE EVALUATION OF THE
conflicts of interest that may arise procedures in place to obtain COMMITTEE
from any transaction conducted by confirmations on any new The annual self-evaluation of the
the Bank with any category deemed appointments accepted by Directors Committee was conducted at year end by
as “Related Parties” in line with the of the Bank in other entities as KMP, the members of the Committee with the
regulatory requirements. evaluation indicating that it’s performance
informing the Company Secretary to
� Ensuring that the Bank shall not grant identify and capture such transactions was effective.
accommodation to any of the carried out by the Bank with such
Directors or to a close relation of such entities which need to be disclosed On behalf of the Board Related Party
Director or to a concern in which any under ‘Directors Interests in Contracts Transactions Review Committee,
Director of the Bank has a substantial with the Bank’ as disclosed in the page
interest, unless the accommodation is 231 of this Annual Report.
sanctioned at a meeting of its Board
of Directors with not less than two- � Ensure that there is an adequately
third of the number of Directors effective and efficient system in place
VAJIRA KULATILAKA
constituting the Board (Directors to capture information which is
other than the Director concerned) relevant to its review function. Chairman - Board Related Party Transactions
voting in favour of such Review Committee
� Obtain professional and expert advice
accommodation.
from qualified persons, where such 17th February 2023
� Ensure that the Bank does not engage advice is necessary for the Colombo, Sri Lanka
in transactions with related parties in performance of the review function.
a manner that would grant such
parties a “More Favourable Treatment”
than that accorded to other
constituents of the Bank carrying on
the same business.

COMPLIANCE REPORT
GRI 2-24,27
Compliance plays a key role in safeguarding

the credibility and reputation of any
organisation, and much more so for a
leading bank. The Sampath Bank Board is Risk Compliance
the ultimate oversight authority in charge Assessment Technology
of compliance related matters, and Programme
achieving compliance leadership across all
aspects of the business operations Compliance Regulatory
remains one of the foremost Board Monitoring Interaction
and Testing and
priorities.
Coordination
Compliance
Under the direction of the Board, the Reporting and Model
Bank’s independent Compliance Function Communication Governance
works to ensure full compliance with all
legislation applicable to licensed
Policies,
commercial banks in Sri Lanka and any
Procedures Compliance
other relevant regulations as well as and Related Training
industry best practices. The Compliance Controls
Function supports the effective
maintenance of the Bank’s governance
structure through its role as the second
line of defense. Additionally, the
Compliance function is further responsible mechanism is in place to provide
Policies, Procedures and Related
for providing training and raising compliance risk assessment information
Controls
awareness to imbue a Bank-wide and other compliance updates to the
compliance culture. The annual review to determine the
Board Integrated Risk Management
efficacy of the Bank’s policies, procedures
Committee (BIRMC) and the Board of
Key Highlights for 2022 and internal controls was completed
Directors.
within the course of the year, with
Regulatory Interaction and
recommendations for improvements Risk Assessment Programme
Coordination
forwarded to the Board for their
The Compliance function facilitated the In line with the Bank’s Policy on Risk Based
consideration.
routine statutory examinations by CBSL, Approach (RBA), compliance risk
which commenced in mid-2022. In assessments were conducted focusing
Reporting and Communication
addition, steps were also taken to Branches, Departments, Products,
With several new regulatory directives
implement the recommendations made Statutory Returns and Subsidiaries.
issued during the course of the year, the
by the CBSL in their 2021 examination
Compliance Department was actively Findings of the RBA process were
reports.
involved in liaising with regulatory communicated to the relevant Branches/
authorities to understand these new Departments/Product Owners to
Compliance Training
developments and disseminate determine the scope and scale of
Compliance training activities in the information to enable its application in the necessary corrective action to be
current year were focused mainly on Bank’s operations. Accordingly, the new implemented.
ensuring team members were made procedural changes were implemented
aware of the latest developments in AML based on the recommendations of the Compliance Technology
(Anti-Money Laundering) and Foreign Compliance Department.
Exchange regulations. All training sessions The Compliance Department in
were conducted online with selected coordination with the relevant internal
Compliance Monitoring and Testing
content compiled into a quick reference stakeholders, put in place the groundwork
All scheduled compliance risk assessments in readiness to comply with the FIU’s
guide and uploaded to “Vidvan” - Sampath
were carried out during the year to (Financial Intelligence Unit of Sri Lanka)
Bank’s e-learning platform.
determine if business units were adhering goAML reporting requirements expected
to applicable regulations, while random to come into effect from 1st January 2023.
spot checks were done to assess their As part of this process, the Bank’s existing
compliance with internal policies and compliance reporting systems were also
procedures. The quarterly reporting significantly enhanced.

RISK MANAGEMENT REPORT
GRI 2-24
Benchmarking Global
Best Practices
Sampath Bank has always been very Implementation of the Recovery

Plan (RCP) to safeguard Bank’s
disciplined in its efforts to manage risk, financial position from internal
an approach that has enabled the Bank to

and external stress conditions
Demonstrating its commitment
consistently generate stakeholder value, towards adoption of best practices in
protect its competitive leverage, reinforce

risk management, Sampath Bank
moved ahead with the integration of
financial stability and strengthen long term the RCP into the Bank’s risk
management architecture, in
resilience. compliance with the Banking Act
Risk Management Approach The purpose of RCP is to establish

Sampath Bank has always been very disciplined in its efforts to manage risk, an approach recovery options for recovery triggers
that has enabled the Bank to consistently generate stakeholder value, protect its associated with all key risks and
competitive leverage, reinforce financial stability and strengthen long term resilience. establish appropriate governance and
oversight mechanisms to effectively
With rapid changes in the political, economic and legal fronts as well as the social, manage these triggers across the
environmental and technological domains emphasising the need for proactive risk Bank’s business model and operational
management, Sampath Bank has adopted Integrated Risk Management Framework to systems. Planning, formulating,
address the actual and potential risks that have or are likely to have an impact on the implementing, monitoring and
Bank’s operations at any given moment. The Integrated Risk Management Framework of reporting on RCP will be overseen by
the Bank comprises four interconnected elements: the newly formed RCP Working
Committee.
� Risk Governance which sets out a clear functional structure for risk stewardship.
� Risk Control Architecture to articulate the essential risk control procedures to guide
Risk Governance
business units and departments to enable them to address unfavourable impacts as
well as to take advantage of opportunities. Board of Directors
The Sampath Bank Board assumes the
� Risk Mapping to ensure all key risks faced by the Bank are identified, measured,
ultimate responsibility for risk governance
monitored and reported.
and in this capacity sets the Bank’s risk
� Risk Awareness Culture to enable shared responsibility and promote risk strategy and provides ongoing supervisory
accountability at all levels of the Bank. oversight for its implementation. As the
apex body responsible for risk governance,
In practice, the framework as a whole and the efficacy of each component is reviewed and the Board establishes the Risk Appetite
updated regularly to reflect contemporary thinking, best practices and well-recognised Framework of the Bank, and the general
principles for risk management. principles governing the Bank’s risk
strategy and target risk profile. Cascading
from this, the Board approves the risk
appetite limits for different types of risks
and set out necessary policies and
procedures to create a control framework
to drive risk fundamentals at an
operational level.

Functional Structure of the Integrated Risk Management Framework of the Bank
Board of Directors
Managing Director Board Integrated Risk

Management Committee (BIRMC)
Chief Compliance Officer Chief Information Security Officer Chief Risk Officer
AML and Regulatory Information Security

Risk Management Unit
Compliance Unit Department
Credit Risk Market Risk Operational Risk

Management Unit Management Unit Management Unit
Credit Risk Management Credit Risk Review

Function Function
Risk Committees Three Lines of Defense management practices by operational

The three-lines-of-defense model provides management and works with risk owners
Risk Governance Committees work closely
the foundation for effective risk in identifying, measuring risk exposures,
with the Board and assess the effectiveness
management and governance, with each and reporting risk-related information to
of the risk management function. They
of the three lines playing a distinctly relevant risk committees. Based on these
periodically review and make
different role across the risk value chain. findings, the RMU makes representations
recommendations on risk management,
to relevant risk governance committees
internal controls framework, risk policies,
The first line of defense comprises of the and propose suitable actions to avoid,
and appetite limits to reflect contextual
business lines and the corporate functions, mitigate, transfer or accept risk.
changes for different risk types. Risk
typically the operational management who
Committees operate under the delegated The Compliance Department meanwhile is
are responsible for maintaining effective
authority of the Board to provide oversight charged with conducting necessary due
internal controls and for executing risk
and guidance to Corporate Management diligence to monitor compliance with legal,
and control procedures on a day-to-day
for formulation and implementation of the regulatory and other imposed
basis.
risk control frameworks, strengthening risk requirements.
monitoring and risk reporting systems as
The second line is represented by the Risk
well as for driving the Bank-wide risk The Internal Audit Function forms the third
Management Unit (RMU) and the
awareness culture. line of defense and provides independent
Compliance Department, who together
are tasked with monitoring the assurance to the Board and its Committees
effectiveness of the first line-of-defense. In that the first and second lines’ efforts are
Please refer pages 176 to 178 for details
this regard, the RMU monitors the consistent with the expectations.
of the Bank’s Board Sub-Committees
and Management Level Committees. implementation of effective risk

In fact, the main characteristic of third line of defense is objectivity in evaluating the effectiveness of the Bank’s risk management, control,
and governance processes. While the Internal Audit function does have the authority to direct or implement processes, they are often
called upon to provide advice and recommendations to the Board Audit Committee regarding process improvements.
On occasion, the Board seek additional assurances and opinions from the Bank’s External Auditors regarding specific risk matters.
First Line of Defense Second Line of Defense Third Line of Defense
Business Lines/Corporate Functions Risk Management and Controls Assurance
Ownership for the day-to-day Direction for Risk Management and Providing independent and objective
management of risk. Compliance, facilitating high level of risk assurance on the Risk Management
awareness throughout the organisation. processes and practices in place.
Ensure that risks accepted are within
the Bank’s risk appetite and risk Independent monitoring of the effective
management policies. implementation of Risk Management
Framework.
Business Heads/ Risk Management Unit (RMU)/ Internal/External

Branch Managers Compliance Department Audit Function
Risk Management Responsibilities of the RMU Risk Control Architecture

� Risk Identification - understanding of risk sources, including internal and external Sampath Bank’s Risk Control Architecture
factors and their potential impact that could affect the Bank’s strategy and risk profile. comprises Board approved constitutional
framework, including risk appetite
� Risk Measurement - determining the severity of the risk using quantitative/qualitative
parameters and related tolerance limits,
metrics in conjunction with expert judgement.
policies and other risk controls within
� Risk Monitoring - continuous review, oversight and critical observation to ensure which business units and departments are
adherence with established risk parameters. expected to operate and achieve their
performance objectives.
� Risk Control and Mitigation - developing risk mitigation actions for consideration of
relevant risk committees.
The Bank’s risk exposure of some of the
� Risk Reporting - preparation of reports to ensure appropriate authorities including key risk appetite parameters as at
relevant risk committees and the Board are kept informed of the Bank’s risk metrics. 31st December 2022 and 31st December
2021 vis-à-vis the Board approved
tolerance limits are given in page 207.

Risk Appetite Parameters Tolerance Limit Actual

31st 31st
December December
2022 2021
� Impaired Loans (Stage 3) Ratio (Net) Less than 5.0% 4.35% 3.20%
Credit Quality � Exposure to High Grades (A+ to B+)/ More than 45% 48.52% 49.55%
Total Advances
� Aggregate exposure (funded + non Less than 20% 6.98% 5.50%
funded) to large borrowers (i.e. over
15% of the Capital)/Total Advances
(funded + non funded)
� Aggregate exposure (funded + non Below 2 times 0.75 0.51
funded) to large borrowers (i.e. over
Credit Risk
15% of Capital)/Capital Base
Credit
Concentration � Related Party Accommodation/Capital Less than 35% 20.97% 17.76%
Base
� Top 20 Advances (limits)/Tier I Capital Below 4 times 2.85 2.30
� Top 20 Advances (limits)/Capital Base Below 3 times 2.38 1.88
� Off-Shore Exposure (total limits)/Total Less than 7.5% 5.7% 4.05%
Advances (Lending to Bank’s
off-shore borrowers only)
� Net Open Position Overnight Limit of USD Mn 35 2.37 7.17
Foreign the Bank (Subject to change as per (Over Bought) (Over Bought) (Over Bought)
Exchange Risk CBSL) USD Mn 25 - -
(Over Sold)
Market Risk � Liquid Assets Ratio Minimum 21% 27.85% 32.62%

Liquidity Risk
� Net Loans to Total Assets Less than 75% 61.25% 63.55%
� Tolerance Limit for Mark to Market Rs Mn (7,500) (443) (1,290)
Interest Rate
(MTM) losses from “FVPL” and “FVOCI”
Risk
portfolios
� Employment Practices and Work Rs Mn 5.00 - -
Place Safety
� Clients, Products and Business Rs Mn 5.00 0.14 -
Practices
Operational � Damage to Physical Assets Rs Mn 5.00 0.15 0.04
Risk
� Business Disruptions and System Rs Mn 5.00 1.72 3.06
Failures
� Execution Delivery and Process Rs Mn 10.00 3.70 5.47
Management

In addition to the risk appetite parameters, Additionally, the regulatory frameworks applicable to licensed commercial banks in Sri
the Board has issued policy statements Lanka also provide further guidance for managing specific risks.
stating the general principles, including
Policy Review Responsibility
establishing specific authority limits and
%
assigning duties and functional Chief Risk Officer
responsibilities for the management for Chief Information Security Officer
1.6 1.6
1.6 Chief Compliance Officer
each risk type in line with overarching risk 1.6
1.6 Company Secretary
1.6
appetite parameters. The Bank’s risk Chief Human Resource Officer
1.6
1.6 AGM - Treasury
control architecture also consists of Snr. DGM - Corporate Banking
3.2 23.8
assessment mechanisms benchmarked on 3.2 (Managing Director - Designate)
3.2 Chief Information Officer
international best practices including Snr. DGM - International Banking
stress testing, Recovery Plan (RCP), Risk 4.7 Snr. DGM - Credit Control, Credit
and Control Self-Assessment (RCSA) and Administration, Recoveries & Legal
6.3 14.3 AGM - Inward Remittance/KPO/BNO
Internal Capital Adequacy Assessment Chairman of the Outsourcing Committee
Process (ICAAP) as well as internally 7.9 DGM - Operations & Branch Banking
AGM - Card Centre
developed tools such as risk registers, risk Chief Internal Auditor
11.1
matrices, dashboards, Early Warning Signal Snr. DGM - Digitalisation, Deposit
9.5 Mobilisation & Marketing
(EWS) Systems etc. BCP Director
Chief Legal Officer
Risk Management Credit Risk Market Risk Operational Risk (including Information
Technology Risk)
� Credit Policy � Market Risk Management Policy � Operational Risk Management Policy
� Credit Operations Manual � ALCO Policy � Internal Policies, Procedures, Directives
� Credit Risk Management Policy � Investment Policy and System Specifications
� Clear segregation of duties � Liquidity Management Policy � Policy on mapping Bank’s Business
between loan origination, including Liquidity Contingency activities in to Basel Business Lines
Risk Management
pre-credit evaluation, credit Funding Plan � Legal Risk Management Policy
Policies and
administration and post-credit � Treasury Policy and Procedure � Model Risk Management Policy
Internal Controls
monitoring Guideline for Treasury Operations � Anti-fraud Policy
� Pre-credit evaluation by RMU � Code of Conduct for Treasury � MOUs, Service Level Agreements and
� Post credit monitoring by RMU Operations Non-Disclosure Agreements to
� Internal Procedures and � Treasury Manual manage relationships with external
Directives service providers
� Early Warning Signals (EWS) � Present Value Basis Points (PVBP) � Risk and Control Self-Assessment
Analysis (RCSA)
� Risk Based Pricing (RBP)
Risk Management � Scenario Analysis � Operational risk capital charge
Tools � Value at Risk (VaR) calculation under ASA (Alternative
Standardised Approach)
� Sensitivity Analysis for Market Risk
Exposures
C � Loan review monitoring � Monitoring of Board-approved � Monitoring of reported loss events on

process (ongoing, up to a % of limit framework as per CBSL daily basis
Risk total loan portfolio) requirements and reporting any
Monitoring limit exceptions to BIRMC/BTC
and � Market developments/trends and
Reporting MIS
Protocols � Profitability analysis from the
foreign exchange portfolio
through the revaluation process

Risk Management Credit Risk Market Risk Operational Risk (including Information
Technology Risk)
M � Monitoring of sector-wise and � Mark-to-market of the equity � Root cause analysis

product-wise exposures portfolio
� Analysis of loss events received and
� Monitoring of geographical � Monthly Market Risk Dashboard submit to Risk and Compliance
distribution to BIRMC Committee Meeting
� Monitoring of risk appetite � Submission of management � Monitoring of the risk appetite for
limits for Credit Risk reports to ALCO and BIRMC Operational Risk
covering Interest Rate, Foreign
� Credit Risk Heat Map/
Exchange and Liquidity Risk
Dashboard
� Review of expired OD limits
� Analysis of facilities/
borrowers not reviewed on
time
� Review of risk rating status of

borrowers
� Review of Security Register

Maintenance (SRM) of
facilities
Q � Analysis of risk elevated � Stress testing on Interest Rate � Operational Risk Stress Testing
Risk industries Risk, Liquidity Risk, Foreign
� Monitoring of Key Risk Indicators (KRI)
Monitoring Exchange Risk and Equity Risk
� Analysis of Watch Listed and submit to BIRMC
and encompassing changing
Customers
Reporting positions and new economic � Risk and Control Self-Assessment
Protocols � Stress testing on Credit Risk variables (RCSA) for IT related departments
and Credit Concentration Risk and submit to BIRMC
� Modified duration on T-Bill,
T-Bond, SLDB/SLISB and � Analysis of Internal Frauds and
Debenture portfolios submit to Fraud Risk Management
Committee
� Monitoring of yield curve risk
and repricing risk covering � CBSL reporting of High Valued actual
trading book and banking book losses
SA � Analysis of Advances Portfolio
� Analysis of Condominium and

Mixed Development
construction projects
� Analysis of Bank exposure to

30 Largest Groups/
Customers
A � Risk and Control Self Assessments

(RCSA) for all Business Units
� Cyber Security measures/IT risk
� Independent assessment of BCP

process
C Continuous M Monthly Q Quarterly SA Semi-Annually A Annually

Capital Planning
Capital planning is a vital part of the Bank’s risk control architecture and is undertaken to mitigate capital risk. Capital Risk is the risk to
the Bank stemming from an insufficient level or composition of adequate capital to support Bank’s core business activities and/or to
support business expansion. A strong capital position is vital to support the Bank’s business strategy and to gain competitive advantage.
Objectives Actions
� Maintain sufficient capital in order � Establishing minimum capital

to continue to build and invest in Capital Management requirements and maintaining a
the Bank’s businesses through Process strong capital governance
regular business cycles and in framework.
stressed environments. The Capital Management
� Regular monitoring of the Bank’s
Process comes under the
� Retain the flexibility to take capital position and following
purview of the Board
advantage of future investment prescribed escalation protocols,
Capital Planning Committee
opportunities. both at the Bank and material
(BCPC) comprising 5
legal entity levels.
� Promote the Bank’s ability to serve Directors with appropriate
as a source of strength to its professional background. � On an annual basis, a
subsidiaries. As part of their role, the comprehensive capital plan is
Committee is charged with approved by the Board of
� Ensure the Bank operates above formulating a three year Directors under strategic
the minimum regulatory capital rolling capital forecast to planning process.
ratios as well as maintain 'well- set out the Bank’s capital
capitalised’ status for the Bank. position and recommend
necessary actions to
� Meet capital distribution objectives.
improve capital levels by
� Maintain sufficient capital raising new capital or by
resources to operate throughout a optimising risk weighted
resolution period in accordance assets.
with the Bank’s preferred
resolution strategy.
Capital Adequacy arising from various risks during the banking regulations set by the Basel
Capital Adequacy is one of the key financial course of the business, such as Credit Risk, Committee on Banking Supervision (BCBS)
indicators which illustrates the soundness Market Risk, Operational Risk etc. of the Bank for International Settlement
and the stability of the Bank. It acts as a (BIS) in December 2010 (Revised in June
‘cushion’ or ‘buffer’ in safeguarding the At present, Capital Adequacy Ratios of the 2011).
depositors’ and lenders’ funds by licensed banks in Sri Lanka are computed
absorbing potential losses arising from key based on the Banking Act Direction No. 1 In accordance with the latest regulatory
risks faced by the Bank. The Capital of 2016 and subsequent amendments requirements enforced by CBSL based on
Adequacy Ratio is a measure used to thereto issued by the Central Bank of Sri the Basel III framework, Sampath Bank
determine whether the Bank has sufficient Lanka (CBSL). The above directions are computes Capital Adequacy Ratios (CAR)
capital to withstand unexpected losses based on the ‘Basel III Accord’, a series of under 3-Tiers.

Capital Adequacy Ratios To add to this, the Central Bank of Sri Lanka
raised its key interest rates by 700 basis
Ratio Minimum As at 31st
Requirement December
2022
Periodic stress tests points in April 2022 causing the lending
rates of the banks to shoot up and in turn
Common 7.00% 11.92%

are conducted to discouraging borrowers from obtaining
new credit.
Equity Tier I
(CET I) Capital
assess the potential
Total Tier I
Capital
8.50% 11.92%
impacts to Bank’s Amidst this backdrop, Sampath Bank made
a conscious effort to curtail new lending in
Total Capital 12.50% 14.27% balance sheet, late 2022. Consequently, the overall Rupee
credit exposure of the Bank increased
Internal Capital Adequacy earnings, regulatory only marginally by 4.9% from
Assessment Process (ICAAP)
capital and liquidity Rs 717 Bn as at 31st December 2021 to
Rs 753 Bn as at 31st December 2022.
The Internal Capital Adequacy Assessment
Process is used as a capital management under a variety of The Bank however took some notable
steps to bring relief to customers who were
tool by the management/Board. The ICAAP
calculation is done annually for the stress scenarios. under stress. In this regard, a substantial
purpose of projecting the Bank’s capital portion of individual borrowers and
and liquidity needs for the forthcoming corporate entities who remained under
MANAGING RISKS
financial years, with due consideration of the moratorium until 30th June 2022, were
granted additional moratoriums to enable
earnings, balance sheet and risk forecasts Credit Risk
under baseline and adverse economic and them to continue to manage their liquidity
market conditions. Periodic stress tests position. However, it should be noted that
are conducted to assess the potential Credit risk, which refers to the potential the tourism industry moratorium was
impacts to Bank’s balance sheet, earnings, loss arising from the customers’ failure to extended for the 5th consecutive time with
regulatory capital and liquidity under a meet contractual obligations as and when the latest instalment scheduled to end in
variety of stress scenarios. Qualitative/ they fall due, is the most significant risk for January 2023.
Quantitative risk assessments are any Bank. For Sampath Bank, credit risk
arises as a result of loans and advances The Bank’s credit risk stress testing
performed to identify and assess material
granted to individuals, SMEs and methodology was also revised in tandem
risks not fully captured under regulatory
corporates. In this regard, the Bank with the SLFRS 9 framework. Accordingly,
capital.
identifies two types of Credit Risk - Stage-wise facility breakdown (Stage 1,
Leverage Ratio Counterparty Risk and Credit Stage 2 and Stage 3) was introduced to the
Concentration Risk. stress testing mechanism in place of the
The Basel III Leverage ratio is a capital
segregation of the portfolio by asset
adequacy tool that is arrived at, by dividing
Context and Strategy for 2022 classification. In addition, CBSL loan loss
the Bank's Tier I capital from its total
provisions were replaced with impairment
exposure, including total assets, derivative On top of the spillover effects of COVID-19
provisions, in the stress testing calculations.
exposures and off-balance sheet items. pandemic, the worsening economic crisis
Based on the new classification, stage 3
enumerated a massive blow to business
provisions for credit impaired customers
The ratio aims to constrain the build-up of activity in 2022. Manufacturers and
increased by 112.9% compared to 2021.
excessive leverage in the banking system importers alike were affected by the
Provisions for stage 1 and 2 customers
and to enhance the Bank’s overall financial import restrictions imposed by the
were also appropriately increased. Please
stability. Sampath Bank reported a healthy government on the backdrop of severe
refer to Note 12 of the financial statements
leverage ratio of 7.0% as at 31st December foreign exchange crisis, while fuel and
on pages 276 and 277 for further details.
2022, well over the regulatory minimum of energy shortages saw many businesses
To strengthen the impairment process, the
3.0%. forced to scale back or even completely
RMU also conducted an in-depth analysis
shut down their operations. Meanwhile,
of all sectors and recommended to
the combined impact of rising inflation and
increase the coverage of risk elevated
new tax regime introduced in the latter
industries under the current economic
part of 2022 led to the rapid erosion of
context and management overlays were
disposable income.
proposed.

Stage-wise Provision Coverage Ratio As part of the overall credit risk mitigation Meanwhile, the following key initiatives
efforts, the Branch Operations were implemented by the RMU to promote
Stage Provision Cover
Centralisation Unit (BOCU) was formed to the credit risk awareness culture at all levels
2022 2021 centralise selected back-office functions of across the Bank;
the branch network, in order to ensure
Stage 1 1.9% 0.9%
such operations are handled by a dedicated � Launch of the “Risk Magazine”
Stage 2 14.6% 8.1%
Stage 3 53.8% 45.5% specialist team, thus relieving branch front- - a quarterly publication, shared among
Total 11.8% 6.2% liners to focus solely on pursuing high the Bank staff to provide financial
quality lending opportunities. In parallel, information, news, industry updates,
with a particular focus on risk
As part of the overall credit risk management Sector-wise Distribution of Post Credit management.
efforts, the existing Credit Risk Management Evaluation (LRS) in 2022
Policy and related procedures of the Bank (Based on the Sample Selected by RMU) � Internal department training sessions
were amended to include additional credit on more frequent basis, to share
%
risk recognition criteria in line with the knowledge among the risk
4.8 0.8
Banking Act Direction No. 13 of 2021. The management team members.
RMU’s involvement in credit risk monitoring 7.5 � Region/credit department-wise
20.4
and management was further strengthened knowledge sharing sessions on credit
in the following manner; 10.4 risk management principles.
� Risk dashboard to present information � Training to improve credit appraisal

to BIRMC regarding risk-specific 17.5
skills and related risk management of
11.6
mitigation actions carried out by the credit officers.
RMU during a particular quarter. � Frequent email campaigns to educate
� Enhancing the criteria for sample branch teams, zonal sector heads and
selection of ‘Loan Review Summaries’ 13.1 13.9 teams of credit departments and
(LRS). update them on the latest credit risk
Manufacturing developments, elevated industries,
� RMU was granted the authority to Financial & Business Services possible risk mitigating actions in order
watch list accounts based on their Traders
to manage overall risks in banking.
Tourism
observations, under advice to business
Other Services
unit. Infrastructure Credit Risk Outlook and Focus for 2023
Construction
� The authority for delisting of Agriculture & Related Given that there appears to be uncertainty
watch-listed customers was restricted Transport as to when economic rebound will
to RMU, effectively preventing business materialise, the Bank will adopt a prudent
units from performing this activity. approach to credit and lending driven by
the Central Credit Documentation Unit stringent pre-credit evaluation and close
� Recommendations of the RMU were
(CCDU) was formed to provide assurance monitoring of post credit borrower
sought when upgrading rescheduled
regarding the completion of customer performance including thorough spot
facilities.
security documentation prior to evaluations and site visits. In this regard,
� Revised ICAAP to include a series of disbursement of credit facilities. the RMU will remain hyper vigilant regarding
new assessment criteria for credit evolving economic conditions with a view to
concentration risk. curtailing new exposures to risk elevated
sectors. These efforts will be coupled with
� Introduction of a Group Risk Rating
more focused training to strengthen the
Model to evaluate the consolidated
risk awareness culture, especially among
financial statements of Group
credit officers.
companies.

Market Risk restricted movement of foreign are reviewed on a regular basis in the
currency in the market. Another grave context of market liquidity, volatility and
concern was escalating global strategic business priorities, in order to
Market risk refers to the potential losses commodity prices on the back of the ensure they remain relevant and within the
influenced by factors such as the movement Russia/Ukraine war. Bank’s overall risk appetite for market risks.
in interest rates, exchange rates, equity
market activities and commodity prices. The Market Risk Management Unit (MRMU) Value at Risk (VaR)
is the main custodian in charge of Bank- VaR is a statistical technique used to
Market risk therefore comprises three basic wide market risk management activities. In measure the amount of potential loss
elements: this capacity, the MRMU monitors market that could occur in a portfolio over a
risks in line with established market risk
� Interest Rate Risk which refers to the specified period of time. In other
policies and procedures in order to facilitate
current or potential risk to the Bank's words, VaR estimates the potential for
efficient risk/return decisions, reduce
capital and earnings arising from loss and the probability that this loss
volatility in operating performance and
adverse movements in interest rates will occur. Sampath Bank uses the
support transparent reporting of the Bank’s
that affect the Bank's banking book historical simulation method for
market risk profile to Corporate
positions. There were several factors Market Risk VaR calculations which
Management, the Board of Directors and
that had a bearing on market risk in takes prior market data over a defined
Regulators.
2022. Interest Rate Risk remained at period and applies those outcomes to
elevated levels owing to major changes the current portfolio.
Key Responsibilities of the MRMU include;
in policy rates following the CBSL’s
decision to increase policy rates by 700 � Ensuring proper implementation of
basis points in April 2022 and another Approved treasury limits are tracked in real
the market risk policy framework.
100 basis points in July 2022. time through the Central Limit Management
� Keeping the Board and the Corporate System with anomalies reported to the
� Currency Risk which refers to the Management informed of the market management for review and approval.
losses that may be reflected in the risk exposures applicable to the Bank Meanwhile, certain quantitative market risk
foreign currency denominated at any given time. measures and corresponding limits
investment portfolio due to fluctuations identified as critical in the Bank’s Risk
in the relative value of the currencies � Developing and maintaining
Appetite Statement, are reported on a
involved. Heightened Currency Risk in quantitative risk models. E.g.: VaR,
monthly basis to BIRMC and are approved
2022 was attributed primarily to Sri PVBP calculation etc.
at least annually by the BIRMC and the
Lanka’s foreign currency liquidity crisis � Conducting daily reviews and analysis Board.
which triggered a massive LKR and fulfilling regulatory requirements.
depreciation in March and among Specific Action to Manage Interest
other things led to the downgrade of � Independent assessment and
Rate Risk (IRR)
the country’s sovereign rating. monitoring of limits consistent with risk
appetite, and controlling of business IRR is managed primarily using Yield Curve
� Liquidity Risk arises due to the non- line and Bank wide market risk. and the Repricing of the Banking Book.
availability of adequate liquid funds for These principles are put into practice via a
institutions to honour its contractual � Performing stress testing and comprehensive policy framework and a set
and contingent financial obligations as qualitative risk assessment. of prudential limits, coupled with VaR
and when they fall due. A number of assessments, Duration and Maturity Gap
reasons were responsible for Market Risk Management Tools Analysis, PVBP and Stress Testing.
amplifying Liquidity Risk in 2022, key Limits on quantitative risk measures such
among them being weak economic as Value at Risk (VaR), Present Value Basis Considering the uncertain environment in
activity, rising interest rates, and hyper Points (PVBP), Mark to Market (MTM) Limits 2022, stress testing was further expanded,
inflationary conditions. Foreign on T-Bill/T-Bond portfolio are independently while special scenario analysis was carried
currency liquidity levels dropped set by the MRMU, while other Treasury out to regularly review and update MTM
significantly in 2022 on the back of limits such as Counterparty limits, Country loss limits for trading portfolio in tandem
lower foreign currency inflows and limits and Currency limits are established with evolving market conditions.
by the Treasury Dealing Room. These limits

Interest Rate Sensitivity Gap Analysis of Assets and Liabilities of the Banking Book as at 31st December 2022
Description 0-90 Days 3-12 1-3 Years 3-5 Years Over 5 Non- Total
Months Years Sensitive
Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn
Total financial assets 518,673 285,242 157,333 75,980 108,218 134,862 1,280,308
Total financial liabilities 558,513 451,695 45,195 11,424 9,170 94,479 1,170,476
Interest rate sensitivity gap (39,840) (166,453) 112,138 64,556 99,048 40,383 109,832
Cumulative gap (39,840) (206,293) (94,155) (29,599) 69,449 109,832
Rate sensitive assets (RSA)/
Rate sensitive liabilities (RSL) 93% 63% 348% 665% 1,180% 143% 109%
Specific Action to Manage Currency Specific Action to Manage Liquidity Risk

Risk Sampath Bank has adopted globally recognised Stock and Flow approaches for the
To manage Currency Risk, the Bank has management of Liquidity Risk, where the Stock approach measures the liquidity stored in
established stop loss limits and maximum key balance sheet ratios, while the Flow approach focuses on the management of cash
limits for individual dealers for foreign inflows and outflows within predetermined time bands according to the residual time to
currency trading. This is coupled with strict maturity.
monitoring of rate movements,
Key Ratios Used for Measuring Liquidity Under the Stock Approach
counterparty limits and currency-wise and
aggregate exposures of the foreign Liquidity Ratios As at 31st As at 31st
currency portfolio. December December
2022 2021
Given the extreme currency volatility and % %
severe shortage of foreign currency
Net loans and advances/Total assets 61.2 63.6
availability in 2022, RMU increased the
Gross loans and advances/Customer deposits 83.9 83.1
severity level of quarterly stress testing
scenarios of the Bank’s foreign currency Liquid assets/Short-term liabilities 38.2 49.4
portfolio and also began monitoring Bulk deposits/Total deposits 8.5 5.7
internal tolerance limits for foreign Purchased funds/Total assets 4.6 2.8
exchange transactions. Limit enhancements Commitments/Total loans 8.4 17.3
to the Bank’s foreign exchange Net Open
In the current low liquidity situation, the Bank’s contingency funding plan was reviewed
Position were also constantly monitored
and updated in 2022. Moreover, in addition to daily stress testing of the SLAR, the Bank’s
and its effects were reported to BIRMC.
entire assets and liability positions were subjected to quarterly stress testing.
Please refer to Note 51.4.4 - Currency Risk
on pages 403 and 404.
Statutory Liquidity Ratios
Foreign Exchange Position as at 31st December 2022
As at 31st December 2022 2021
Rs Mn
1,000 % %
800
Statutory Liquid 27.85 32.62
600 Assets Ratio (SLAR)
400 - Bank
204
Liquidity Coverage 200.78 254.89

112
138
200
Ratio (LCR) - Rupee
876
30
22
19
23
16
0 Liquidity Coverage 146.53 213.43

(11)
(564)
(200) Ratio (LCR) - All

Currency
(400)
Net Stable Funding 157.10 149.92
(600) Ratio (NSFR)
USD GBP EUR JPY AUD CAD CHF SGD AED HKD Others

Operational Risk
Operational risk refers to the losses In the normal course of business, the
Bank manages operational risk through
stemming from inadequate or failed
internal processes, people and systems,
or from external events such as natural
disasters, social or political events.
appropriate risk policies, procedures,
directives along with continuous assessment
and monitoring of loss events. In addition,
In the normal course of business, the Bank
manages operational risk through
appropriate risk policies, procedures,
directives along with continuous
risk mitigation initiatives such as insurance
assessment and monitoring of loss events. covers, service-level agreements with third
parties have also been implemented.
In addition, risk mitigation initiatives such
as insurance covers, service-level
agreements with third parties have also
been implemented. Meanwhile, a
comprehensive Business Continuity Plan transport networks across the country, The Bank has identified a number of
(BCP) and a Disaster Recovery Plan (DRP) travelling to and from their designated noteworthy risks that contribute to
is in place to manage contingencies. workplaces became a challenge for Bank Operational Risk. These include; IT Risk,
employees. Suppliers too were similarly Legal Risk, Model Risk and Cybersecurity/
In 2022, Operational Risk was underscored affected, resulting in delays in the delivery Information Security Risk.
mainly by fuel shortages and energy of critical supplies such as cash deliveries
disruptions experienced for a good part of for ATM loading. Vendor due diligence Breakdown of Total Loss Events
activities involving site visits also could not (Value-wise) 2022
the year. The lack of adequate fuel
be conducted owing to transport issues. %
reserves in the country meant that backup
power sources could not be utilised in the 0.9
event of a power disruption, while frequent In response to these unprecedented 3.1
power outages meant the Bank had to operational challenges, the RMU made the
face the risk of service disruptions. following recommendations for future
Moreover, with fuel shortages affecting action;
34.6
Summary of Risk & Control Self � Invest in commissioning renewable 61.4
Assessment (RCSA) 2022 energy as a power source for critical
% service points.
2.1 4.3
� Install UPS systems to provide backup
power for CCTV and Security systems.
� Increase the level of supplier Potential Loss

diversification to maintain at least 5 Near Miss
Gain
approved suppliers for all critical
Actual Loss
activities.
� Outsource vendor due diligence and

assurance activities to independent
third party experts.
93.6
Low Risk
Moderate Risk
High Risk

Total Losses (Value) by Basel Event Types � IT Risk - refers specifically to

% disruption to the normal course of
6.7 0.3 6.2
business due either to failure of
hardware and software systems or
0.1
the lack of adequate IT infrastructure.
21.9 14.6 Through its involvement in monitoring
IT related loss events and performing
40.79 root cause analysis to determine the
2022 2021
10.3 cause and effect of such events, the
RMU plays an important supporting
role in the day to day management of
30.3 68.75 IT risk. In an effort to further
strengthen the overall IT Risk
Management Framework, the RMU
Business Disruptions & System Failures Internal Frauds began working closely with the IT
External Frauds Damage to Physical Assets Department to comply with the
Execution Delivery & Process Management (2022: 0.01% / 2021: 0.01%) Banking Act Direction No. 16 of 2021
Clients, Products & Business Practices Employment Practices & Work Place Safety on Technology Risk Management and
(2022: nil / 2021: 0.04%)
Resilience. As a first step, a process-
Total Losses (Incidents) by Basel Event Types based gap analysis was conducted to
% identify pain points to be addressed
0.4 0.1 0.2 0.1 on a priority basis. Based on the
0.4 0.1 0.2 0.1
6.6 findings of the gap analysis, the RMU
15.5 and the IT Department began the
7.1
process of defining the Technology
6.7 Risk Appetite and set appropriate
2022 2021 Tolerance Limits for critical IT risk
points. In parallel, the RMU also
85.3 undertook and completed the RCSA
(Risk and Control Self-Assessment)
77.2
process for all business units.
� Legal Risk - Basel III includes Legal

Business Disruptions & System Failures Internal Frauds Risk as a part of Operational Risk.
Execution Delivery & Process Management Damage to Physical Assets Legal Risk is the risk arising from non-
External Frauds Employment Practices & Work Place Safety compliance with statutory and/or
Clients, Products & Business Practices
regulatory provisions, uncertainty due
to legal actions or uncertainty in the
Actual Losses for 2022 (Value-wise)
applicability or interpretation of
%
relevant laws or regulations applicable
0.5 0.5 to the Bank during the course of its
Execution Delivery & Process
17.8 Management
business and other operations,
External Frauds including people, process, systems or
Business Disruptions & System external events. Legal Risk could also
Failures arise owing to court action occurring
Internal Frauds
35.9
Damage to Physical Assets
locally or internationally, or simply the
20.2 Clients, Products & Business Practices penalty resulting from non-
Employment Practices & Work Place compliance with legal requirements.
Safety: nil
25.1

The Bank manages legal risk by

subscribing to all governing
regulations applicable to third party
dealings and contractual business Strategic Risk is well managed under the
stewardship of the Board of Directors. The
relationships. The Compliance
Department, through its routine due
diligence activities, provides assurance
to safeguard against non-compliance.
Board sets strategy in correlation to the
Bank’s overall Vision and Core Values.
� Model Risk - A subset of Operational
Risk, Model Risk is the risk that occurs
when financial models used to
measure quantitative information fail, Reputation Risk Strategic Risk
leading to adverse outcomes for the
Bank. The Bank uses a number of
models that apply statistical, economic, Reputation Risk can occur either when a Strategic Risk refers to the potential
financial and mathematical theories, lapse in judgement (including but not negative impact to the Bank’s performance
techniques and assumptions to limited to violation of business ethics, non- and prospects owing to ineffective
process data into quantitative compliance, customer service lapses or strategic decisions resulting in the failure
estimate, for the management of operating deficiencies) or inaction leading to capitalise on business opportunities
various risks. Model failures can occur to negative stakeholder perceptions and/or take action against potential
due to programming errors, incorrect regarding the Bank, that can have a threats.
data, and technical errors as well as profoundly negative impact on the Bank’s
from misinterpretation of model reputation and industry standing. Strategic Risk is well managed under the
outputs. The Bank uses extensive stewardship of the Board of Directors. The
testing, robust governance policies Specific policies and guidelines, including Board sets strategy in correlation to the
and independent reviews to manage detailed brand guidelines provide the Bank’s overall Vision and Core Values. The
model risk. foundation for mitigating Reputation Risk. Board-approved annual budget and the
For more details on steps taken in 2022 to strategic plan outlines the future direction
� Cybersecurity/Information Security
protect and strengthen the Bank’s of the Bank through a set of short-term
Risk - Cybersecurity/Information
reputation, please refer to the Capital goals, long-term goals, objectives and
Security Risk occurs as a result of
Management Report - Intellectual Capital priorities along with the actions needed to
internal and/or external breach of the
section on pages 94 to 100. achieve them in line with the Bank’s overall
Bank’s data/systems. Towards this
vision. Environmental scans are done on a
end, Sampath Bank has aligned with
The independent brand health study and continuous and ongoing basis to compare
global best practices by obtaining the
regular stakeholder interactions (Refer and contrast the Bank’s SWOT (Strengths,
ISO 27001 standards certification to
Stakeholder Engagement section on pages Weaknesses, Opportunities and Threats)
validate the efficacy of the Bank’s
62 to 69) also pave the way to understand analysis against changes in the PESTEL
information security architecture. The
and align with stakeholder expectations in (Political, Economic, Social, Technological,
Bank has also focused on aligning
order to minimise potential reputational Environmental and Legal) landscape.
with the CBSL’s Baseline Security
damage.
Standards (BSS) for licensed
commercial banks. For more
information regarding the steps taken
in 2022, please refer to the Capital
Management Report - Intellectual
Capital section on pages 94 to 100.

The final performance
and the leap of faith
symbolises the
unwavering trust
between two entities,
and the absolute
certainty that the
future remains secure
at all times.
COURAGE IN
CONVICTION
F I N A N C I A L I N F O R M AT I O N
Our powerful track-record and longstanding partnerships fuel a strong sense of
confidence in our ability to help you soar, and reach your full potential.
Financial Calendar ...............................................................................

...............................................................................220
220
Annual Report of the Board of Directors on the Affairs of the
Company .....................................................................................
.....................................................................................221
221
Directors’ Interest in Contracts with the Bank..............................
Bank..............................231
231
Directors’ Statement on Internal Control Over Financial
Reporting.......................................................................................
Reporting .......................................................................................232
232
Sampath Bank PLC.
PLC......................................................................234
.................................................................... 234
Managing Director’s and Chief Financial Officer’s
Responsibility Statement...........................................................
Statement...........................................................235
235
Statement of Directors’ Responsibility for
Financial Reporting.
Reporting......................................................................237
.................................................................... 237
Independent Auditors’ Report to the
Shareholders of Sampath Bank PLC.
PLC.......................................239
..................................... 239
Financial Statement Highlights.
Highlights..........................................................243
........................................................ 243
Statement of Profit or Loss................................................................
Loss................................................................244
244
Statement of Comprehensive Income............................................
Income............................................245
245
Statement of Financial Position........................................................
Position........................................................246
246
Statement of Changes in Equity.
Equity........................................................248
...................................................... 248
Statement of Cash Flows....................................................................
Flows....................................................................250
250
Notes to the Financial Statements...................................................
Statements...................................................253
253
FINANCIAL CALENDAR
Financial Calendar - 2022
2021 Annual Report and Audited Financial Statements signed on 15th February 2022
36th Annual General Meeting held on 30th March 2022
Rs 4.25 per share Final Cash Dividend for 2021 distributed on 25th April 2022
2022 Annual Report and Audited Financial Statements signed on 17th February 2023
37th Annual General Meeting to be held on 30th March 2023
Rs 3.45 per share Final Cash Dividend for 2022 distributable on 26th April 2023*
Rs 1.15 per share Final Scrip Dividend for 2022 distributable on 17th April 2023*
Interim Financial Statements published in terms of Rule 7.4 of the Colombo Stock Exchange (CSE) and as per the requirements of the
Central Bank of Sri Lanka:
Colombo Stock Newspapers (as required by CBSL)

Exchange
English Sinhala Tamil
2021 4th Quarter interim results released on 17th February 2022 25th February 2022 02nd March 2022 02nd March 2022
2022 1st Quarter interim results released on 13th May 2022 26th May 2022 27th May 2022 27th May 2022
2022 2nd Quarter interim results released on 12th August 2022 25th August 2022 26th August 2022 26th August 2022
2022 3rd Quarter interim results released on 11th November 2022 25th November 2022 28th November 2022 28th November 2022
Proposed Financial Calendar - 2023
2023 Annual Report and Audited Financial Statements to be signed in February 2024
38th Annual General Meeting to be held in March 2024
Final dividend for 2023 payable in April 2024**
Interim Financial Statements to be published in terms of Rule 7.4 of the Colombo Stock Exchange and as per the requirements of the
Central Bank of Sri Lanka:
Colombo Stock Newspapers (as required by CBSL)

Exchange
English Sinhala Tamil
2022 4th Quarter interim results to be 17th February 2023 31st March 2023 31st March 2023 31st March 2023
released on or before
2023 1st Quarter interim results to be 15th May 2023 31st May 2023 31st May 2023 31st May 2023
2023 2nd Quarter interim results to be 15th August 2023 31st August 2023 31st August 2023 31st August 2023
2023 3rd Quarter interim results to be 15th November 2023 30th November 2023 30th November 2023 30th November 2023
2023 4th Quarter interim results to be 29th February 2024 31st March 2024 31st March 2024 31st March 2024
6XEMHFWWRFRQȴUPDWLRQE\6KDUHKROGHUV
6XEMHFWWRFRQȴUPDWLRQE\'LUHFWRUVDQG6KDUHKROGHUV

ANNUAL REPORT OF THE BOARD OF DIRECTORS

ON THE AFFAIRS OF THE COMPANY
1. GENERAL (“Banking Act”) and was incorporated and professionalism in line with
as a Public Limited Liability Company globally accepted good governance
The Board of Directors of Sampath
in Sri Lanka on 10th March 1986 benchmarks.
Bank PLC have pleasure in presenting
under the Companies Act No. 17 of
its Annual Report on the State of
1982, initially as “Investment and 3. GOVERNANCE IN YEAR 2022
$΍DLUVRIWKH&RPSDQ\WRWKH
Credit Bank Limited”, and The Bank’s Governance Structure is
members of Sampath Bank PLC (“the
subsequently changed to Sampath designed to drive sustainable growth
%DQNȋ IRUWKHȴQDQFLDO\HDUHQGHG
Bank Limited. The Company was in alignment with Sampath Bank’s
31st December 2022, together with
re-registered as per the Vision and Values, while carefully
the audited Financial Statements of
requirements of the Companies Act balancing interests of stakeholders.
the Bank, Consolidated Financial
No. 7 of 2007 and its amendments Amidst severe economic headwinds
Statements of the Group for that year
(“Companies Act”) on 28th April 2008 LQWKH%DQNȇVFOHDUO\GHȴQHG
and the Auditors’ Report on those
under the name “Sampath Bank PLC” governance structures enabled the
Financial Statements, prepared in
with the Registrar General of Board to maintain proper and
compliance with the requirements of
Companies. The re-registration H΍HFWLYHRYHUVLJKWRYHUWKHD΍DLUVRI
the Companies Act No. 7 of 2007 and
number of the Bank is PQ 144. the Bank. Towards this end, the
its amendments, Banking Act No. 30
Board received regular updates
of 1988 and its amendments. The The ordinary shares of the Bank are
supported by more in-depth analysis
Financial Statements have been listed on the Main Board of the
RINH\LVVXHVD΍HFWLQJWKH%DQNDQG
reviewed and recommended by the Colombo Stock Exchange. The Bank’s
its stakeholders.
Board Audit Committee and were Basel III Tier II Compliant Rated
approved by the Board of Directors Unsecured Subordinated The Board worked closely with the
on 17th February 2023. Redeemable Debentures are also Corporate Management Team to
listed on the Colombo Stock review the Bank’s business plan and
This report also includes all other
Exchange. assess the impact to the Bank from
relevant information required by the
the ongoing economic crisis including
Companies Act No. 7 of 2007 and its The Bank has been assigned a
the related risks and opportunities.
amendments, Banking Act Direction National Long Term Rating of
Where necessary, the Board has
No. 11 of 2007 on Corporate ‘A(lka)/RWN' [31st December 2022:
approved appropriate short, medium
Governance for Licensed Commercial 'AA-(lka)/RWN'] by Fitch Ratings Lanka
and long-term initiatives to build the
Banks and subsequent amendments Limited. The subordinated
Bank’s defenses and strengthen
thereto, the Listing Rules of the debentures have been assigned a
overall resilience against ongoing
Colombo Stock Exchange and is also rating of 'BBB+(lka)/ RWN'.
challenges.
guided by the recommended best
practices on Corporate Governance. 7KH5HJLVWHUHG2ɝFHDVZHOODVWKH
The Board together with the Board
+HDG2ɝFHRIWKH%DQNLVORFDWHGDW
Sub-Committees successfully
This report was approved by the No. 110, Sir James Peiris Mawatha,
managed the Bank’s activities
Board of Directors on 17th February Colombo 02, Sri Lanka.
through continuous strategic
2023. The appropriate number of
realignment to protect and create
copies of the Annual Report will be 2. APPROACH TO CORPORATE
value for the Bank and its
submitted to the Central Bank of Sri GOVERNANCE AND FRAMEWORK
stakeholders. In deliberating strategy,
Lanka, Colombo Stock Exchange, The Sampath Bank Board is fully the Board adopted an integrated
Registrar of Companies, Securities committed to maintaining the best approach to value creation by
and Exchange Commission of Sri governance outcomes based on the embracing stakeholder inclusivity
Lanka and to the Sri Lanka principles of ethical leadership, while considering the Environmental,
Accounting and Auditing Standards accountability and transparency. Social and Governance (ESG) impacts
Monitoring Board within the statutory The Bank’s governance framework on the organisation.
deadlines. provides clear direction for quick and
responsive decision making and for
Sampath Bank is a Licensed
promoting responsible behaviours to
Commercial Bank registered under
ensure the sustainable delivery of
the Banking Act No. 30 of 1988
strategic outcomes. The Bank
continues to aspire to achieve higher
standards of governance, integrity


4. STATUTORY DISCLOSURES
Section 168 of the Companies Act No. 7 of 2007 and its amendments requires the following information to be disclosed in the
Annual Report prepared for the year under review.
No. Disclosure Requirements Reference to the Disclosure Reference for Compliance Page
Companies Act Reference
No. 7 of 2007
1. The nature of the business of Section 168 (1) (a) About the Bank 10 - 13
the Bank and the Group 1RWHWRWKHȴQDQFLDOVWDWHPHQWV3ULQFLSDO 253
Activities and Nature of Operations of the Bank
Performance of Subsidiaries 164 - 165
1RWHWRWKHȴQDQFLDOVWDWHPHQWVΖQYHVWPHQWLQ 308 - 309
Subsidiaries
2. Signed Financial Statements Section 168 (1) (b) The Financial Statements for the year ended 31st 247
of the Bank and the Group December 2022 have been duly signed by the
for the accounting period ([HFXWLYH'LUHFWRU&KLHI)LQDQFLDO2ɝFHUWKUHHPRUH
completed in accordance Directors and the Company Secretary of the Bank.
with Section 152 Financial Statements 244 - 409
1RWHWRWKHȴQDQFLDOVWDWHPHQWV6WDWHPHQWRI 253
Compliance
3. Auditors' Report on the Section 168 (1) (c) Independent Auditors’ Report to the Shareholders of 239 - 242
Financial Statements of the Sampath Bank PLC
Bank and the Group Based on the declaration provided by Messrs Ernst &
Young and as far as the Directors are aware, the
Auditors do not have any relationship with or interest
with the Bank that in our judgment, may reasonably be
thought to have a bearing on their independence
within the meaning of the Code of Professional
Conduct and Ethics issued by the Institute of
Chartered Accountants of Sri Lanka, applicable on the
date of this report.
The retiring Auditors, Messrs Ernst & Young, have

H[SUHVVHGWKHLUZLOOLQJQHVVWRFRQWLQXHLQRɝFH7KH\
come up for re-election at the Annual General
Meeting, with the recommendation of the Board Audit
Committee and the Board of Directors. In accordance
with the Companies Act, a resolution proposing the
re-appointment of Messrs Ernst & Young, Chartered
Accountants, as Auditors is being proposed at the
Annual General Meeting.
1RWHWRWKHȴQDQFLDOVWDWHPHQWV$XGLWRUVȇ 281
Remuneration
4. Changes in Accounting Section 168 (1) (d) 7KHVLJQLȴFDQWDFFRXQWLQJSROLFLHVDGRSWHGLQWKH 253 - 409
Policies during the preparation of the Financial Statements
Accounting Period

No. 7 of 2007
5. Particulars of entries in the Section 168 (1) (e) The Bank maintains the Directors’ Interest Register as
Interests Register made required under the provisions of Section 168 (1) (e) of
during the accounting period the Companies Act. The Directors of the Bank have
made necessary declarations of their respective
interests in contracts or proposed contracts, in terms
of the Sections 192 (1) and 192 (2) of the Companies
Act. These interests have been recorded in the
Directors’ Interest Register, which is available for
inspection in terms of the Companies Act.
As a practice and in terms of Corporate Governance,

Directors have refrained from voting on matters in
which they have a material interest. The Directors have
no direct or indirect interest in contracts or proposed
contracts with the Bank other than those disclosed.
Directors’ Interest in Contracts with the Bank 231
6. Remuneration and other Section 168 (1) (f) 1RWHWRWKHȴQDQFLDOVWDWHPHQWVȂ 347
EHQHȴWVSDLGWRWKH'LUHFWRUV Compensation to KMP
during the accounting period
7. Total amount of donations Section 168 (1) (g) The donations made by the Bank to the Government
made by the Company during amounted to Rs Nil (2021: Nil). The Bank does not
the accounting period make donations for political purposes.
1RWHWRWKHȴQDQFLDOVWDWHPHQWVȂ2WKHU2SHUDWLQJ 281
Expenses
8. Information on Directorate of Section 168 (1) (h) The Board of Directors of the Bank as at 31st December
the Company at the end of 2022 comprised eleven (2021: eleven) members with
the accounting period ZLGHȴQDQFLDODQGFRPPHUFLDONQRZOHGJHDQG
experience. In accordance with the Listing Rules of
Colombo Stock Exchange and Corporate Governance
Rules of the Banking Act Direction No. 11 of 2007 issued
E\WKH&HQWUDO%DQNRI6UL/DQND &%6/ WKHFODVVLȴFDWLRQ
of Directors into Executive (ED), Non-Executive (NED)
and Independent (IND), Non-Independent (NID) are
stated against the names.
During the year under review, Mr Hiran Cabraal was

DSSRLQWHGZLWKH΍HFWIURPWK-XQHWRȴOOXSD
casual vacancy on the Board. Accordingly, Mr Cabraal
will be elected by the shareholders at the 37th Annual
General Meeting, in terms of Article 93 of the Articles
of Association of the Bank, with the unanimous
recommendation of the Board Nomination Committee
and approval of the Board.
0U'HVKDOGH0HOUHVLJQHGIURPWKH%RDUGZLWKH΍HFW
from 6th May 2022.
Board of Directors 182 - 185


No. 7 of 2007
9. Amounts payable to the Section 168 (1) (i) 1RWHWRWKHȴQDQFLDOVWDWHPHQWV$XGLWRUVȇ 281

Auditor as audit fees and fees Remuneration
for other services rendered
during the accounting period
by the Bank and its
Subsidiaries
10. Annual Report of the Board Section 168 (1) (k) $QQXDO5HSRUWRIWKH%RDUGRI'LUHFWRUVRQWKH$΍DLUV 221 - 231
RI'LUHFWRUVRQWKH$΍DLUVRI of the Company
the Company to be signed on
behalf of the Board by two
Directors and the Company
Secretary
5. ADDITIONAL DISCLOSURES
The following additional disclosures are also made. Full details regarding these disclosures are provided within Notes to the
Annual Report, which form an integral part of the Annual Report of the Board of Directors.
No. Disclosure Requirement Disclosure Reference Page Reference
1. Vision, Values and The business activities of the Bank are conducted at a high level of 12 - 13
Corporate Conduct ethical standards in achieving its Vision
2. Changes to the Group There were no changes to the Group Structure during the year under
Structure review.
3. Review of Operations No new branches were opened during the year under review.
7KHUHYLHZRIWKHȴQDQFLDODQGRSHUDWLRQDOSHUIRUPDQFHRIWKH%DQNDQG
the Group, together with important events that took place during the
year 2022 have been explained in the following reports:
Chairman’s Message 30 - 33
Management Discussion and Analysis 73 - 165
4. Future Developments The Bank will focus on a business expansion driven through its existing
Branch Network, concentrating mainly on its core banking operations to
LQFUHDVHLWVPDUNHWVKDUHDQGSURȴWDELOLW\7KLVZLOOEHIXUWKHUVXSSOHPHQWHG
E\PRUHYLJRURXVH΍RUWVWRH[SDQGWKH%DQNȇVGLJLWDOFKDQQHOVDQGIRFXVRQ
LQQRYDWLYHSURGXFWGHYHORSPHQWSURFHVVLPSURYHPHQWVDQGVWD΍
GHYHORSPHQWDOODLPHGDWIXOȴOOLQJWKHUDSLGO\FKDQJLQJFXVWRPHUQHHGV
amidst challenging market conditions and to maximise the value created for
all the stakeholders. An overview of the future development of the Bank and
the Group is given in the following reports.
Chairman’s Message 30 - 33
Management Discussion and Analysis 73 - 165

5. Directors’ Responsibility Statement of Directors’ Responsibility for Financial Reporting 237 - 238
for Financial Reporting
6. Financial Results and Income
Appropriations
1RWHWRWKHȴQDQFLDOVWDWHPHQWV*URVVΖQFRPH 272
3UR΋WDQG$SSURSULDWLRQV
6WDWHPHQWRI3URȴWRU/RVV 244
Statement of Comprehensive Income 245
Statement of Financial Position 246 - 247
Statement of Changes in Equity 248 - 249
Statement of Cash Flows 250 - 252
7. Taxation As per the Inland Revenue (Amendment) Act No. 45 of 2022, the income
WD[UDWHDSSOLFDEOHRQWKH%DQNȇVGRPHVWLFRSHUDWLRQVDQGR΍VKRUH
RSHUDWLRQVRIWKHR΍VKRUHEDQNLQJXQLWLQFUHDVHGIURPWR
ZLWKH΍HFWIURPWKHVHFRQGVL[PRQWKVRIWKH\HDURIDVVHVVPHQW
$FFRUGLQJO\LQFRPHWD[ZDVOLDEOHDWRQWD[DEOHLQFRPHRI
WKHȴUVWVL[PRQWKVRIWKH\HDURIDVVHVVPHQWZKLOHWD[DEOH
income of the second six months of the year of assessment 2022/2023
ZDVOLDEOHDW
$FFRUGLQJO\GHIHUUHGWD[ZDVFRPSXWHGDWDVDWVW'HFHPEHU

The Group has provided deferred taxation on all known temporary

GL΍HUHQFHVXQGHUWKHOLDELOLW\PHWKRGDVSHUPLWWHGE\WKH6UL/DQND
Accounting Standard - LKAS 12 (Income Taxes).
The Group was liable for income tax on local dividend received for the
ȴUVWVL[PRQWKVRIWKH\HDUDWDQGIRUWKHVHFRQGVL[PRQWKV
RIWKH\HDUDW
As per the Value Added Tax (Amendment) Act No. 14 of 2022, VAT rate
DSSOLFDEOHWRWKH%DQNRQȴQDQFLDOVHUYLFHVLQFUHDVHGIURPWR
ZLWKH΍HFWIURPVW-DQXDU\
According to the Social Security Contribution Levy Act No. 25 of 2022,

WKH%DQNLVOLDEOHIRU6RFLDO6HFXULW\&RQWULEXWLRQ/HY\DWRQWKH
YDOXHDGGLWLRQDWWULEXWHGWRWKHȴQDQFLDOVHUYLFHVDQGRQQRQ
ȴQDQFLDOWXUQRYHUZLWKH΍HFWIURPVW2FWREHU QLO
7KH%DQNLVDOVROLDEOHIRU&URSΖQVXUDQFH/HY\DWRI3URȴWDIWHU7D[
IRUWKH\HDUHQGHGVW'HFHPEHU
According to the Surcharge Tax Act No. 14 of 2022, the Bank and the
*URXSZHUHOLDEOHIRUVXUFKDUJHWD[DWRQWKHWD[DEOHLQFRPHIRU
the year of assessment 2020/21 as one-time tax and the tax expense
ZDVFRQVLGHUHGDVDQH[SHQGLWXUHLQWKHȴQDQFLDO\HDU
Accordingly, Rs 2,670,567,000/- and Rs 3,232,510,000/- were charged
against opening retained earnings of the year on account of the Bank
and the Group respectively.
1RWHWRWKHȴQDQFLDOVWDWHPHQWVΖQFRPH7D[([SHQVH 282 - 284


8. Dividend 7KH%RDUGRI'LUHFWRUVKDVUHFRPPHQGHGDȴQDOGLYLGHQGRI5VSHU
share (Rs 3.45 per share in cash and Rs 1.15 per share in scrip) for the
ȴQDQFLDO\HDUHQGHGVW'HFHPEHUVXEMHFWWRWKHDSSURYDORIWKH
shareholders at the Annual General Meeting to be held on 30th March
2023. The Bank will inform the Director - Bank Supervision of Central
Bank of Sri Lanka, the Board approved detailed assessment carried out
in deciding the payment of cash dividend for the year 2022.
7KH%RDUGRI'LUHFWRUVZDVVDWLVȴHGWKDWWKH%DQNZRXOGPHHWWKH
VROYHQF\WHVWLPPHGLDWHO\DIWHUWKHSD\PHQWRIȴQDOGLYLGHQGSURSRVHG
in terms of the Section 31(3) of the Companies Act. The Board provided
WKH6WDWHPHQWRI6ROYHQF\WRWKH$XGLWRUVDQGREWDLQHGD&HUWLȴFDWHRI
Solvency from the Auditors in respect of the dividend payment
conforming to the statutory provision.
1RWHWRWKHȴQDQFLDOVWDWHPHQWV'LYLGHQG3DLGDQG3URSRVHG 285 - 286
9. Reserves 1RWHWRWKHȴQDQFLDOVWDWHPHQWV6WDWXWRU\5HVHUYH)XQG 339
1RWHWRWKHȴQDQFLDOVWDWHPHQWV2WKHU5HVHUYHV 340 - 341
1RWHWRWKHȴQDQFLDOVWDWHPHQWV5HWDLQHG(DUQLQJV 341
1RQFRQWUROOLQJΖQWHUHVW6WDWHPHQWRI3URȴWRU/RVV n/a
Statement of Changes in Equity 248 - 249
10. Capital Expenditure The total capital expenditure on acquisition of property, plant and
equipment and intangible assets of the Bank and the Group amounted
to Rs 1,197,232,000/- and Rs 2,402,409,000/- respectively (2021 Bank:
Rs 648,056,000/- and Group: Rs 1,871,560,000/-).
1RWHVDQGWRWKHȴQDQFLDOVWDWHPHQWV3URSHUW\3ODQWDQG 310 - 319
Equipment and Intangible Assets
11. Capital Commitments The capital expenditure approved and contracted for as at the reporting
date
1RWHWRWKHȴQDQFLDOVWDWHPHQWV&DSLWDO&RPPLWPHQWV 344
12. Property, Plant and 1RWHWRWKHȴQDQFLDOVWDWHPHQWV 310 - 318
Equipment (PPE)
13. Market Value of Freehold All freehold lands and buildings of the Bank and the Group were
Properties UHYDOXHGDVDWWKH\HDUHQGE\SURIHVVLRQDOO\TXDOLȴHG
LQGHSHQGHQWYDOXHUVDQGEURXJKWLQWRWKHȴQDQFLDOVWDWHPHQWVWR
HQVXUHWKDWWKHFDUU\LQJDPRXQWRIVXFKSURSHUWLHVUHȵHFWVWKHFXUUHQW
market prices. In determining the market/fair values, increase in building
YDOXHVGXHWRWKHFXUUHQWLQȵDWLRQDU\VLWXDWLRQLQWKHFRXQWU\KDVEHHQ
disregarded by the valuers. Accordingly, fair value changes were
LGHQWLȴHGSHUWDLQLQJWRVDLGSURSHUWLHVDQGWKHLUYDOXHVZHUHDGMXVWHGWR
EULQJFXUUHQWPDUNHWSULFHVLQWRWKHȴQDQFLDOVWDWHPHQWVDVDWVW
December 2022.
1RWHWRWKHȴQDQFLDOVWDWHPHQWV3URSHUW\3ODQWDQG(TXLSPHQW 310 - 318
Bank and Group

14. Stated Capital, Stated Capital, Debt Capital and Shares issued by the Bank
Debentures and Bonds 1RWHWRWKHȴQDQFLDOVWDWHPHQWV6WDWHG&DSLWDO 339
1RWHWRWKHȴQDQFLDOVWDWHPHQWV'XHWR'HEW6HFXULWLHV+ROGHUV 328 - 330
Issue of Shares and Debt Capital – Subsidiaries

Investor information 425
1RWHWRWKHȴQDQFLDOVWDWHPHQWV'HWDLOVRI'HEHQWXUHVΖVVXHG 329
15. Share Information Investor Information 421 - 425
16. Shareholding Investor Information 421 - 425
17. Equitable treatment to The Bank has at all times ensured that all shareholders are treated fairly
Shareholders and equitably.
18. Retirement and In terms of Articles No. 86 and 87 of the Articles of Association of the
Re-Election/ Company, Mr Harsha Amarasekera, Mrs Keshini Jayawardena and
Re-Appointment of 0U9LQRG+LUGDUDPDQLUHWLUHE\URWDWLRQDQGEHLQJHOLJLEOHR΍HU
Directors themselves for re-election on the unanimous recommendation of the
Board Nomination Committee and approval of the Board of Directors.
0U+LUDQ&DEUDDOKDYLQJEHHQDSSRLQWHGWRWKH%RDUGZLWKH΍HFWIURP
WK-XQHWRȴOOXSDFDVXDOYDFDQF\LQWKH%RDUGZLOOVWDQGIRU
election by the shareholders in terms of Article 93 of the Articles of
Association.
Board of Directors 182 -185
Sections 210 and 211 of the Companies Act do not apply to the Bank, in
view of the more stringent provision contained in Section 3 (3) (i) of
Banking Act Direction No. 11 of 2007 on Corporate Governance for
Licensed Commercial Banks, which restricts the age of a Director of a
Licensed Commercial Bank to 70 years.


19. List of Directors of the Names of the Directors of Subsidiary companies as at 31st December 2022:
Subsidiaries of the Bank
Siyapatha Finance PLC SC Securities (Pvt) Limited
Mr P S Cumaranatunga Mr S G Wijesinha
(Chairman) (Chairman)
Mr Y S H R S Silva Mr W M P L De Alwis
(Deputy Chairman) Mr R Samaranayake
Mr H M A Seneviratne Mr S N Kulatilake
(Managing Director)
Mr J Selvaratnam
Mr J H Gunawardena
Mr D Sooriyaarachchi
Mr W S C Perera
Ms H S R Ranatunga
Mr M D B Boyagoda
Sampath Centre Limited Sampath Information Technology
Mr I W Senanayake Solutions Limited
(Chairman) Mr R Samaranayake
Mr R Samaranayake (Chairman)
Mr S G Wijesinha Mr M V Indrasoma
Mr S P Kannangara Mr M A Salgado
Mr P P De Silva Mr W S C Perera
Mr Y S H R S Silva
20. Register of Directors and As required under Section 223 (1) of the Companies Act, the Bank
Secretaries maintains a Register of Directors and Secretaries which contains the
name, surname, former name (if any), residential address, business,
occupation, dates of appointment and dates of resignation (if applicable)
of each Director and the Company Secretary.
21. Board Sub-Committees The Board, while assuming the overall responsibility and accountability for
the management oversight of the Bank, has also appointed Board
Sub-Committees to ensure that the activities of the Bank at all times are
conducted with the highest ethical standards and the best interests of all
its stakeholders. The Board has formed twelve (12) Board Sub-
Committees including four (4) mandatory Board Sub-Committees as
required by the Banking Act Direction No. 11 of 2007 and one (1)
mandatory Board Sub-Committee as required by Section 9 of the Listing
5XOHVRIWKH&RORPER6WRFN([FKDQJHΖQDGGLWLRQWRWKHȴYH
mandatory Board Sub-Committees, the Board has also appointed seven
(7) non-mandatory Board Sub-Committees.
Corporate Governance Report 168 - 181 / 432 - 466
22. Directors’ Meetings Composition of the Board and attendance at meetings 175
23. Related Party 'LUHFWRUVKDYHDOVRGLVFORVHGWUDQVDFWLRQVLIDQ\WKDWFRXOGEHFODVVLȴHG
Transactions as Related Party Transactions in terms of Sri Lanka Accounting Standards
- LKAS 24 (Related Party Disclosures) which is adopted in preparation of
the Financial Statements.
In addition, the Bank carries out transactions in the ordinary course of

business in an arm’s length basis with entities where the Chairman or
Directors of the Bank is the Chairman or a Director of such entities as
detailed in:
Directors’ Interest in Contracts with the Bank 231
1RWHWRWKHȴQDQFLDOVWDWHPHQWVȂ5HODWHG3DUW\'LVFORVXUHV 347 - 350

24. Directors’ Interest in

Name of Director No. of Shares No. of Shares
Ordinary Shares and
as at 31st as at 31st
Debentures December 2022 December 2021
Mr Harsha Amarasekera - -
Mr Rushanka Silva - -
Mr Dilip de S Wijeyeratne - -
Ms Aroshi Nanayakkara - -
Dr Sanjiva Weerawarana - -
Mr Vajira Kulatilaka - -
Mrs Keshini Jayawardena - -
Mr Vinod Hirdaramani 281,129 281,129
Mr Hiran Cabraal - n/a
Mr Nanda Fernando 1,718,988 1,718,988
Mr Ajantha de Vas Gunasekara - -
n/a - not applicable
Mr Nanda Fernando holds 50,000 of Basel III Compliant - Tier II Listed
Rated Unsecured Subordinated Redeemable Debentures with a
Non-Viability Conversion (2021/2028) issued by the Bank.
Mr Rushanka Silva, Mr Vajira Kulatilaka and Mr Vinod Hirdaramani

respectively hold 2,000,000, 300,000 and 700,000 of Basel III Compliant
- Tier II Listed Rated Unsecured Subordinated Redeemable Debentures
with a Non-Viability Conversion (2023/2028) issued by the Bank.
25. Directors’ Interest in Mr Rushanka Silva holds one share each at Siyapatha Finance PLC and
Shares and Debentures Sampath Centre Limited.
of Subsidiaries
26. Our Team Members Capital Management Report - Human Capital 101 - 113
27. Employee Share The Bank did not initiate or establish any Employee Share Ownership/
Ownership/Option Plans Option Plans during the year.
(ESOP)
28. Environmental Protection To the best knowledge of the Board, the Bank has not engaged in any
activity that is harmful or hazardous to the environment. The Directors
DOVRFRQȴUPWKDWWRWKHEHVWRIWKHLUNQRZOHGJHDQGEHOLHIWKH%DQNKDV
complied with the relevant environmental laws and regulations.
Capital Management Report - Natural Capital 132 - 147
29. Statutory Payments 7KH'LUHFWRUVWRWKHEHVWRIWKHLUNQRZOHGJHDQGEHOLHIDUHVDWLVȴHGWKDW
all statutory payments due to the government, other regulatory bodies
and related to the employees have been paid on a timely basis.
30. Outstanding Litigation In the opinion of the Directors who in consultation with the Bank’s
lawyers have established that litigation currently pending against the
%DQNZLOOQRWKDYHDPDWHULDOLPSDFWRQWKHUHSRUWHGȴQDQFLDOUHVXOWVRU
the future operations of the Bank.
1RWHWRWKHȴQDQFLDOVWDWHPHQWVȂ2WKHU&RQWLQJHQW/LDELOLWLHV 345 - 346
31. Events after the No circumstances have arisen since the Statement of Financial Position
Reporting Period date, which would require adjustments to, or disclosure in, the accounts,
except those disclosed.
1RWHWRWKHȴQDQFLDOVWDWHPHQWV(YHQWV$IWHUWKH5HSRUWLQJ3HULRG 353


32. Going Concern The Directors, after making necessary inquiries and reviews including
reviews of the budget for the ensuing year, capital expenditure
UHTXLUHPHQWVIXWXUHSURVSHFWVDQGULVNVFDVKȵRZVDQGVXFKRWKHU
matters required to be addressed under the Code of Best Practice on
Corporate Governance issued by the Institute of Chartered Accountants
of Sri Lanka and the Banking Act Direction No. 11 of 2007 on Corporate
Governance for Licensed Commercial Banks issued by the CBSL, are
VDWLVȴHGWKDWWKH%DQNKDVDGHTXDWHUHVRXUFHVWRFRQWLQXHRSHUDWLRQV
into the foreseeable future. Accordingly, they continue to adopt the
going concern basis in preparing the Financial Statements.
1RWHWRWKHȴQDQFLDOVWDWHPHQWV*RLQJ&RQFHUQ 254
33. 6LJQLȴFDQW6KDUHKROGLQJV 1RWHWRWKHȴQDQFLDOVWDWHPHQWVȂ4XRWHG(TXLW\6HFXULW\ 306
in Other Organisations
34. Risk Management and Material Foreseeable Risk Factors
Internal Control Risk Management Report 204 - 217
Internal Controls
Directors’ Statement on Internal Control Over Financial Reporting 232 - 233
35. Corporate Governance Corporate Governance Report 168 - 181 / 432 - 466
6. NOTICE OF ANNUAL GENERAL MEETING

The 37th Annual General Meeting of the Bank will be held at "Balmoral", The Kingsbury, No. 48, Janadhipathi Mawatha, Colombo 01,
on 30th March 2023. The Notice of Meeting is given on page 515 of the Annual Report.
7. ACKNOWLEDGEMENT OF THE CONTENTS OF THE REPORT

As required by Section 168 (1) (k) of the Companies Act No. 7 of 2007, the Board of Directors hereby acknowledges the contents of
this Annual Report.
For and on behalf of the Board of Directors,
HARSHA AMARASEKERA DILIP DE S WIJEYERATNE

Chairman Senior Independent Director
NANDA FERNANDO LASANTHA SENARATNE

Managing Director Company Secretary
17th February 2023

Colombo, Sri Lanka

DIRECTORS’ INTEREST IN CONTRACTS

WITH THE BANK
5HODWHGSDUW\GLVFORVXUHVDVUHTXLUHGE\WKH6UL/DQND$FFRXQWLQJ6WDQGDUGȂ/.$6 5HODWHG3DUW\'LVFORVXUHV DUHGHWDLOHGLQ1RWH
to the Financial Statements. In addition, the Bank carries out transactions in the ordinary course of business in an arm’s length basis with
entities where the Chairman or Director of the Bank is the Chairman or a Director of such entities as detailed below.
Company Relationship Nature of the Facility Current Balance Balance

Limit Outstanding Outstanding
as at 31st as at 31st
December December
2022 2021
Rs 000 Rs 000 Rs 000
Vallibel One PLC Non Executive Independent Deposits 7,775 30,450
Chairman Loans & advances 504,000 102 -
CIC Agri Businesses (Pvt) Ltd Non Executive Independent Deposits 771 -
Chairman Loans & advances 1,066,262 2,470,605
2,520,000
Indirect facilities 612,744 48,950
CIC Holdings PLC Non Executive Independent Deposits 499,105 125,084
Chairman Loans & advances 1,049,464 360,000
3,500,000
Indirect facilities 1,856,835 -
Link Natural Products (Pvt) Ltd Non Executive Director Deposits 715,322 71,238
Millennium Airlines (Pvt) Ltd Non Executive Director Deposits 207 114
Swisstek Aluminium Limited Non Executive Independent Deposits 18,112 21,820
Chairman Loans & advances 740,365 -
1,025,000
Indirect facilities - 237,869
Swisstek (Ceylon) PLC Non Executive Independent Deposits 646 62,247
Chairman Loans & advances 249,559 -
250,000
Indirect facilities - -
Royal Ceramics Lanka PLC Non Executive Independent Deposits 566,320 18,200
Chairman Loans & advances 3,000 843 -
Expolanka Holdings PLC Non Executive Independent Loans & advances 3,000 984 -
Director
Mr Rushanka Silva
Indra Motor Spares (Pvt) Ltd Director Deposits 3 7
Indra Property Development (Pvt) Ltd Director Deposits 156 157
Mr Dilip de S Wijeyeratne
Singer (Sri Lanka) PLC Independent Non Executive Deposits 1,364 -
Director Loans & advances 3,802,000 2,500,926 3,744,070
Indirect facilities 2,000,000 825,786 1,946,872
Regnis (Lanka) PLC Independent Non Executive Deposits - 29
Director Loans & advances 79,282 16,346
280,000
Indirect facilities 121,047 229,857
Dr Sanjiva Weerawarana
Lanka Software Foundation Chairman Deposits 12,410 16,513
Mr Vajira Kulatilaka
Printcare PLC Independent Non Executive Loans & advances 360,000 201,073 496
Director
Panasian Power PLC Independent Non Executive Deposit 8,167 9,874
Director Loans & advances 105,160 105,160 99,830
Ceylon Knit Trend (Pvt) Ltd Executive Director Deposits 955,989 462,253
Indirect facilities 722,000 - -
Hirdaramani International Exports (Pvt) Executive Director Deposit 1,608,132 2,271,975
Ltd Loans & advances 864,000 864,000 430,000
Long Island Clothing Company (Pvt) Ltd Executive Director Deposits 1,101 39,234
Loans & advances 79,200 4,450 59,878
Indirect facilities 100,000 - 3,978
Rosewood (Pvt) Ltd Executive Director Deposits 14,869 40,387
Windforce PLC Non Independent Non Executive Deposits 63 71,652
Director
Mr Nanda Fernando
Institute of Bankers of Sri Lanka Director Deposits 1,744 239,173

DIRECTORS’ STATEMENT ON INTERNAL

CONTROL OVER FINANCIAL REPORTING
RESPONSIBILITY this assessment, the Board is of the view selected processes using Computer
that the system of Internal Control Over Aided Audit Techniques/Tools (CAAT).
The report on Internal Control Over
Financial Reporting currently in place at However, mission critical processes
Financial Reporting is presented by the
the Bank, is sound and adequate to continued to be monitored centrally,
Board of Directors of Sampath Bank PLC in
provide reasonable assurance regarding while thematic audits were done
line with section 3(8)(ii)(b) of Banking Act
WKHUHOLDELOLW\RIȴQDQFLDOUHSRUWLQJDQGWKDW covering the entire Branch Network.
Direction No. 11 of 2007 and with principle
WKHSUHSDUDWLRQRIȴQDQFLDOVWDWHPHQWVIRU In addition, cyber security and data
D.1.5 of the Code of Best Practice on
external purposes is in accordance with security measures were also
Corporate Governance 2017 issued by the
relevant accounting principles and monitored through appropriate audit
Institute of Chartered Accountants of
regulatory requirements. techniques and tools. Through these
Sri Lanka (CA Sri Lanka).
initiatives, all controls were tested on
KEY FEATURES OF THE PROCESS DQRQJRLQJEDVLVZLWKVLJQLȴFDQW
The Board of Directors (“the Board”) is
ADOPTED IN REVIEWING THE DESIGN ȴQGLQJVLGHQWLȴHGE\WKHΖQWHUQDO
responsible for the implementation of an
AND EFFECTIVENESS OF THE Audit Department submitted to the
DGHTXDWHDQGH΍HFWLYHLQWHUQDOFRQWURO
INTERNAL CONTROL SYSTEM OVER Board Audit Committee for review at
mechanism at Sampath Bank PLC (“the
FINANCIAL REPORTING their periodic meetings.
Bank”). In doing so, the Board has ensured
that the system in place is designed to The key mechanisms that have been Ì The Board Audit Committee reviews
manage the Bank’s key areas of risk within established to review the adequacy and LQWHUQDOFRQWUROLVVXHVLGHQWLȴHGE\
DQDFFHSWDEOHULVNSURȴOHWRDFKLHYHWKH integrity of the system of internal controls the Internal Audit Department, the
business objectives of the Bank. ZLWKUHVSHFWWRȴQDQFLDOUHSRUWLQJLQFOXGH External Auditors, Regulatory
the following: Authorities and the Management; and
In the light of the foregoing, the system of Ì Establishment of Board Sub- evaluates the adequacy and
internal controls can only provide Committees to assist the Board in H΍HFWLYHQHVVRIWKHULVNPDQDJHPHQW
reasonable and not absolute assurance HQVXULQJWKHH΍HFWLYHQHVVRI%DQNȇV and internal control systems. It is also
DJDLQVWPDWHULDOPLVVWDWHPHQWRIȴQDQFLDO day-to-day operations and to ensure the responsibility of the Board Audit
information and records or against that all such operations are carried Committee to review the internal
ȴQDQFLDOORVVHVRUIUDXG out in accordance with the corporate audit function with regard to the
objectives, strategies and in line with scope of audits and the quality of the
The Board has established an ongoing the annual budget as well as the same. The minutes of the Board Audit
process for identifying, evaluating and policies and the business direction Committee meetings were forwarded
PDQDJLQJWKHVLJQLȴFDQWULVNVIDFHGE\WKH approved by the Board. to the Board on a periodic basis.
Bank in order to continuously strengthen Further details of the activities carried
the system of Internal Control Over Ì The Bank’s Internal Audit Department out by the Board Audit Committee
Financial Reporting, in line with the is tasked with verifying compliance during the year under review are set
regulatory guidelines and to capture with policies and procedures and the out in the Board Audit Committee
changes in the business environment as H΍HFWLYHQHVVRIWKHLQWHUQDOFRQWURO Report on pages 190 to 193.
and when needed. The Management systems on an ongoing basis using
samples and rotational procedures. Ì For successful implementation over
assists the Board in the implementation of
7KLVKHOSVWRKLJKOLJKWVLJQLȴFDQW the process, a steering committee
the Board’s policies and other risks
ȴQGLQJVRIQRQFRPSOLDQFH$XGLWV (Internal Control Over Financial
protocols aimed at identifying and
are carried out according to the Reporting Committee) was formulated
assessing the risks faced and in the design,
annual audit plan which is reviewed in the Bank as a Management-level
operation and monitoring of suitable
and approved by the Board Audit Committee whereas several other
internal controls to mitigate and manage
&RPPLWWHH2QVLWH$XGLWV2΍VLWH Management-level Committees
these risks.
Audits, Process Audits and Thematic (referred to in page 178) were also
Audits are carried out covering all established and granted appropriate
The process is regularly reviewed by the
Board, in accordance with the “Guidance units and branches to provide DXWKRULVDWLRQWRHQVXUHH΍HFWLYH
independent and objective reports. management and supervision of the
for Directors of Banks on the Directors’
The frequency of these audits are core areas of the Bank’s business
Statement on Internal Control” issued by
determined by the level of risk operations.
CA Sri Lanka.
assessed. The fuel and energy crisis in Ì In assessing the Internal Control Over
In 2022, the Board assessed the system of 2022 called for a revised approach in )LQDQFLDO5HSRUWLQJLGHQWLȴHGRɝFHUV
Internal Control Over Financial Reporting, executing the internal audit plan. of the Bank were assigned to ensure
taking into account, the principles set out Accordingly, online monitoring was compliance with all procedures and
in the aforementioned guidance. Based on introduced through data analysis on controls that are connected with

VLJQLȴFDQWDFFRXQWVDQGGLVFORVXUHV Risk Management Unit continues to Ì The comments made by the External
RIWKHȴQDQFLDOVWDWHPHQWVRIWKH perform an independent review of the Auditors in connection with Internal
Bank. These in turn, were checked LQGLYLGXDOO\VLJQLȴFDQWORDQ Control System Over Financial
DQGYHULȴHGE\WKHΖQWHUQDO$XGLW impairment process at each reporting Reporting in previous years, were
Department for suitability of design date. The assessment does not reviewed and appropriate steps taken
DQGH΍HFWLYHQHVVRQDQRQJRLQJ include the Bank’s subsidiaries. in 2022 to address relevant matters
EDVLV6LJQLȴFDQWLVVXHV LIDQ\ raised. The recommendations made
observed by the Internal Audit Ì The Board has long since recognised
by the External Auditors in 2022 in
Department were referred to the WKHQHHGWRDXWRPDWHWKHȴQDQFLDO
connection with the System of
“Internal Control Over Financial reporting process in order to
Internal Control Over Financial
Reporting Steering Committee” for proactively comply with the
Reporting will be dealt with in the
their comments, prior to being requirements of recognition,
future.
LQFOXGHGLQWKHȴQDOUHSRUWRQΖQWHUQDO PHDVXUHPHQWFODVVLȴFDWLRQDQG
Control Over Financial Reporting GLVFORVXUHRIWKHȴQDQFLDO CONFIRMATION
submitted to the Board Audit instruments. Towards this end, the Based on the above processes, the Board
Committee and the External Auditors. Bank successfully implemented FRQȴUPVWKDWWKH%DQNȇV6\VWHPRIΖQWHUQDO
Sampath Bank continues to follow the Robotic Process Automation (RPA) in Control Over Financial Reporting is fully
new Sri Lanka Accounting Standards 2019 which has eliminated manual competent to provide a reasonable
comprising LKAS and SLFRS. The intervention in calculating impairment assurance regarding the reliability of
processes and procedures initially provisions to a greater extent. The ȴQDQFLDOUHSRUWLQJDQGVXSSRUWWKH
adopted in 2012 with regard to the Board continues to review various SUHSDUDWLRQRIȴQDQFLDOVWDWHPHQWVIRU
aforementioned Accounting options available to increase the external purposes, in accordance with
Standards were further strengthened GHJUHHRIDXWRPDWLRQLQWKHȴQDQFLDO relevant accounting principles and
over the period based on the reporting process. regulatory requirements of the Central
feedback received from the Ì To ensure business continuity, protect Bank of Sri Lanka.
Regulators, External Auditors, Board workers and maintain uninterrupted
Audit Committee and the Internal customer service amidst current REVIEW OF THE STATEMENT BY
Audit Department. The Bank has economic headwinds, social unrest EXTERNAL AUDITORS
documented procedures pertaining and fuel and energy shortages, the The External Auditors, Messrs Ernst &
to these new requirements and has Bank prudently moved certain areas Young, after reviewing the Directors’
proceeded to update the relevant of its operations online and Statement on Internal Control Over
procedure manuals as and when introduced remote working Financial Reporting included in the Annual
necessary. The Board also assessed arrangements. Report of the Bank for the year ended 31st
the repercussions of the prolonged 'HFHPEHUKDYHFRQȴUPHGWRWKH
Ì In 2022, the Bank further
economic stress caused by the Board that nothing has come to their
strengthened its internal control
COVID-19 pandemic alongside the attention that causes them to believe that
processes to ensure that the ongoing
impact of the ongoing economic crisis, the Statement is inconsistent with their
challenges due to the impact of the
including the fuel and energy understanding of the process adopted by
COVID-19 debt moratorium on
shortages on the business operations the Board in the review of the design and
interest income and impairment
of the Bank and the need to build in H΍HFWLYHQHVVRIWKH6\VWHPRIΖQWHUQDO
provisions were accurately captured
required management overlays to the Control Over Financial Reporting. The
LQLWVȴQDQFLDOUHSRUWLQJ
Expected Credit Loss model to External Auditor’s Report on the Statement
address these unprecedented of Internal Control Over Financial
developments. Further, the Credit Reporting is given on page 234 of this
Annual Report.
By order of the Board,
DILIP DE S WIJEYERATNE HARSHA AMARASEKERA NANDA FERNANDO LASANTHA SENARATNE

Chairman - Board Audit Committee Chairman Managing Director Company Secretary
17th February 2023

Colombo, Sri Lanka

INDEPENDENT ASSURANCE REPORT

TO THE BOARD OF DIRECTORS OF
SAMPATH BANK PLC
Report on the Directors’ Statement Our responsibilities and compliance The procedures performed were limited
primarily to inquiries of bank personnel
on Internal Control with SLSAE 3050 (Revised)
and the existence of documentation on a
We were engaged by the Board of Our responsibility is to assess whether sample basis that supported the process
Directors of Sampath Bank PLC (“Bank”) to the Statement is both supported by the adopted by the Board of Directors.
provide assurance on the Directors’ documentation prepared by or for
Statement on Internal Control over GLUHFWRUVDQGDSSURSULDWHO\UHȵHFWVWKH SLSAE 3050 (Revised) does not require us
Financial Reporting (“Statement”) included process the directors have adopted in to consider whether the Statement covers
in the annual report for the year ended UHYLHZLQJWKHGHVLJQDQGH΍HFWLYHQHVVRI all risks and controls or to form an
31 December 2022. the internal control of the Bank. RSLQLRQRQWKHH΍HFWLYHQHVVRIWKH%DQNȇV
risk and control procedures. SLSAE 3050
Management’s responsibility We conducted our engagement in (Revised) also does not require us to
Management is responsible for the accordance with Sri Lanka Standard on consider whether the processes
preparation and presentation of the Assurance Engagements (SLSAE) 3050 described to deal with material internal
Statement in accordance with the (Revised), Assurance Report for Banks on FRQWURODVSHFWVRIDQ\VLJQLȴFDQW
“Guidance for Directors of Banks on the Directors’ Statement on Internal Control, problems disclosed in the annual report
Directors’ Statement on Internal Control” issued by the institute of Charted will, in fact, remedy the problems.
issued in compliance with section 3(8)(ii) Accountants of Sri Lanka.
(b) of the Banking Act Direction No. 11 of The procedures selected depend on our
2007, by the Institute of Chartered This Standard required that we plan and judgement, having regard to our
Accountants of Sri Lanka. perform procedures to obtain limited understanding of the nature of the Bank,
assurance about whether Management the event or transaction in respect of
has prepared, in all material respects, the which the Statement has been prepared.
Our Independence and Quality
Statement on Internal Control.
Control
We believe that the evidence we have
We have complied with the independence For purpose of this engagement, we are REWDLQHGLVVXɝFLHQWDQGDSSURSULDWHWR
and other ethical requirement of the not responsible for updating or reissuing provide a basis for our conclusion.
Code of Ethics for Professional any reports, nor have we, in the course of
Accountants issued by the Institute of this engagement, performed an audit or
Chartered Accountants of Sri Lanka, which Our conclusion
UHYLHZRIWKHȴQDQFLDOLQIRUPDWLRQ
is founded on fundamental principles of Based on the procedures performed,
integrity, objectivity, professional nothing has come to our attention that
Summary of work performed
FRPSHWHQFHDQGGXHFDUHFRQȴGHQWLDOLW\ causes us to believe that the Statement
and professional behavior. We conducted our engagement to assess included in the annual report is
whether the Statement is supported by inconsistent with our understanding of
the documentation prepared by or for the process the Board of Directors has
7KHȴUPDSSOLHV6UL/DQND6WDQGDUGRQ
GLUHFWRUVDQGDSSURSULDWHO\UHȵHFWHGWKH adopted in the review of the design and
Quality Control 1 and accordingly
process the directors have adopted in
maintains a comprehensive system of H΍HFWLYHQHVVRILQWHUQDOFRQWURORYHU
reviewing the system of internal control
quality control including documented ȴQDQFLDOUHSRUWLQJRIWKH%DQN
RYHUȴQDQFLDOUHSRUWLQJRIWKH%DQN
policies and procedures regarding
compliance with ethical requirements,
professional standards and applicable
legal and regulatory requirements.
17 February 2023
Colombo

MANAGING DIRECTOR’S AND CHIEF FINANCIAL

OFFICER’S RESPONSIBILITY STATEMENT
NANDA FERNANDO AJANTHA DE VAS GUNASEKARA

Managing Director Executive Director/Chief Financial Officer
The Financial Statements of Sampath The Group presents its financial results to have adequate resources to continue in
Bank PLC (“the Bank”) and the its shareholders on a quarterly basis. operational existence for the foreseeable
Consolidated Financial Statements of the The formats used in the preparation of future. Accordingly, we continue to adopt
Bank and its Subsidiaries (“the Group”) as the Financial Statements and disclosures the Going Concern basis in preparing
at 31st December 2022 have been made, comply with the formats the Financial Statements even after
prepared in conformity with the prescribed by the Central Bank of considering the potential implications on
requirements of the following: Sri Lanka, which are also in compliance the Bank’s operations and future financial
with the disclosure requirements of the performance resulting from Sri Lanka’s
Ì Sri Lanka Accounting Standards
Sri Lanka Accounting Standard - LKAS 1 current economic turmoil.
issued by the Institute of Chartered
(Presentation of Financial Statements).
Accountants of Sri Lanka,
The Accounting Policies used in the The estimates and judgments relating to
Ì Companies Act No. 07 of 2007 and preparation of the Financial Statements the Financial Statements were made on a
amendments thereto, are appropriate and are consistently prudent and reasonable basis; in order to
applied by the Group. The significant ensure that the Financial Statements
Ì Sri Lanka Accounting and Auditing
accounting policies and estimates that reflect in a true and fair manner, the form
Standards Act No. 15 of 1995,
involve a high degree of judgment and and substance of transactions and that
Ì Banking Act No. 30 of 1988 and complexity were discussed with the Board the Bank’s state of affairs are reasonably
amendments thereto and Directions, Audit Committee and External Auditors. presented. To ensure this, the Bank and
Determinations, Orders and Comparative information has been all of its Subsidiaries have taken proper
Guidelines issued by the Central restated wherever necessary to comply and sufficient care in installing a system of
Bank of Sri Lanka (CBSL), with the current presentation. The Board internal controls and procedures for
of Directors and the Management of the safeguarding assets, preventing and
Ì The Listing Rules of the Colombo
Bank accept responsibility for the integrity detecting frauds and/or errors as well as
Stock Exchange (CSE),
and objectivity of these Financial other irregularities which are reviewed,
Ì The Code of Best Practice on Statements. We confirm that to the best evaluated and updated on an ongoing
Corporate Governance 2017 issued of our knowledge, the Financial basis. Our Internal Auditors have
by the Institute of Chartered Statements give a true and fair view of the conducted periodic audits to provide
Accountants of Sri Lanka; and Section assets, liabilities, financial position, results reasonable assurance that the
3(8)(ii)(b) of the Banking Act Direction of the operations and the cash flows of established policies and procedures were
No. 11 of 2007 on Corporate the Group. We have reasonable grounds consistently followed. However, there are
Governance issued by the CBSL. to believe that the Bank and the Group inherent limitations that should be

MANAGING DIRECTOR’S AND CHIEF FINANCIAL

OFFICER’S RESPONSIBILITY STATEMENT
recognised in weighing the assurances The Board Audit Committee approves the
provided by any system of internal control audit and non-audit services provided by
and accounting. Messrs Ernst & Young, in order to ensure
that the provision of such services does
We confirm that, as of 31st December not impair Messrs Ernst & Young’s
2022 the Bank’s Internal Controls Over independence.
Financial Reporting are adequate and
effective and complies with section We confirm that to the best of our
3(8)(ii)(b) of the Banking Act Direction knowledge:
No. 11 of 2007 on Corporate Governance
Ì The Group has complied with all
(Internal Control Over Financial Reporting
applicable laws, regulations and
- ICOFR) issued by the Central Bank of
prudential requirements;
Sri Lanka. The Annual Report of the
Directors on pages 221 to 231 briefly Ì There are no material non-
covers the Group’s Internal Control Over compliances; and
Financial Reporting. In addition, the
Ì There is no material litigation that is
Directors’ Statement on Internal Control
pending against the Group other
Over Financial Reporting is also provided
than those disclosed in Note 45.5 to
on pages 232 and 233. The Bank’s
the Financial Statements in the
External Auditors, Messrs Ernst & Young,
Annual Report.
have audited the effectiveness of the
Bank’s Internal Controls Over Financial
Reporting and have given an unqualified
opinion on page 234 of this Annual
Report. NANDA FERNANDO
Managing Director
The Financial Statements of the Group
were audited by Messrs Ernst & Young,
Chartered Accountants, the independent
External Auditors. Their report is given on
AJANTHA DE VAS GUNASEKARA
pages 239 to 242 of this Annual Report.
Executive Director/Chief Financial Officer
The Board Audit Committee of the Bank
meets periodically with the Internal
17th February 2023
Auditors and the independent External
Colombo, Sri Lanka
Auditors to review the manner in which
these auditors are performing their
responsibilities and to discuss issues
relating to auditing, internal controls and
financial reporting. To ensure complete
independence, the External Auditors and
the Internal Auditors have full and free
access to the members of the Board Audit
Committee to discuss any matter of
substance. The Board Audit Committee
report is given on pages 190 to 193.

STATEMENT OF DIRECTORS’ RESPONSIBILITY

FOR FINANCIAL REPORTING
The responsibilities of the Directors in To support the preparation of these and the Board of Directors. Further, the
relation to the Financial Statements of Financial Statements, the Directors Financial Statements of the Bank and the
Sampath Bank PLC (“the Bank”) and the ensure that: Group have been signed by three
Consolidated Financial Statements of the Directors and the Company Secretary in
Ì The appropriate accounting policies
Bank and its Subsidiaries (“the Group”) are conformity with the requirements of the
have been selected and applied in a
set out in the following Statement. The Companies Act.
consistent manner and material
responsibility of the Auditors in relation to
departures, if any, have been
the Financial Statements is set out in the The Financial Statements for the year
disclosed and explained;
Report of the External Auditors; Messrs 2022 captured in this Annual Report are
Ernst & Young, on pages 239 to 242. Ì The Financial Statements are consistent with the underlying books of
presented in accordance with Sri accounts and are in conformity with the
In terms of Sections 150(1), 151, 152 and Lanka Accounting Standards (SLFRS/ requirements of the Sri Lanka Accounting
153(1) and (2) of the Companies Act No. LKAS) and are consistent with the Standards, the Companies Act, the Sri
07 of 2007 (Companies Act), the Directors underlying books of accounts; Lanka Accounting and Auditing Standards
of the Bank are responsible for ensuring Act No. 15 of 1995, the Banking Act
Ì Reasonable and prudent judgments
that the Bank and the Group keep proper together with its amendments, the Listing
and estimates have been made so
books of accounts of all transactions and Rules of the Colombo Stock Exchange
that the form and substance of
prepare Financial Statements that give a (CSE) and the Code of Best Practice on
WUDQVDFWLRQVDUHSURSHUO\UHȵHFWHG
true and fair view of the financial position Corporate Governance 2017 issued by
of the Bank and the Group as at end of Ì The Financial Statements provide the the Institute of Chartered Accountants of
each financial year and of the financial information required by the Sri Lanka (CA Sri Lanka). Further, these
performance of the Bank and the Group Companies Act, Banking Act No. 30 of Financial Statements comply with the
for each financial year and place them 1988 (Banking Act) and amendments prescribed format issued by the Central
before the Annual General Meeting for thereto and the Listing Rules of the Bank of Sri Lanka (CBSL) for the
shareholders for their approval. The Colombo Stock Exchange; and preparation of annual Financial
Financial Statements comprise of the Statements of Licensed Commercial
Ì The companies within the Group
Statement of Financial Position as at end Banks. The Directors confirm that the
PDLQWDLQVXɝFLHQWDFFRXQWLQJ
of the financial year, the Statement of financial reporting system of the Bank and
UHFRUGVWRGLVFORVHWKHȴQDQFLDO
Profit or Loss, the Statement of the Group has been designed to provide
position of the Group with
Comprehensive Income, the Statement of reasonable assurance regarding the
reasonable accuracy.
Cash Flows, the Statement of Changes in reliability of financial reporting and the
Equity for the financial year ended and Directors accept responsibility for the
The Directors are also responsible for
Notes thereto. integrity and objectivity of the Financial
ensuring that the Bank and the Group
Statements published in this Annual
have adequate resources to continue in
The Financial Statements are prepared Report. The Directors confirm that in
operation, to justify applying the Going
under the supervision of the Executive preparing the Financial Statements given
Concern basis in preparing these
Director/Chief Financial Officer who is a on pages 244 to 409, appropriate
Financial Statements. This year too, the
senior member of the Corporate accounting policies have been selected
Directors considered the potential
Management and an Executive Director of and applied on a consistent basis in line
implications of the COVID-19 pandemic
the Bank. The Directors confirm that the with the financial reporting framework,
and the current economic crisis on the
Financial Statements of the Bank and the while reasonable and prudent judgments
Group’s business, operations and
Group give a true and fair view of: have been made so that the form and
financial performance.
substance of transactions are properly
Ì 7KHVWDWHRID΍DLUVRIWKH%DQNDQG
The Financial Statements of the Bank and reflected.
the Group as at 31st December 2022
and the Group have been certified by the
The Directors have taken appropriate
Executive Director/Chief Financial Officer,
Ì 7KHȴQDQFLDOSHUIRUPDQFHRIWKH steps to ensure that the Bank and the
who is the officer responsible for its
%DQNDQGWKH*URXSIRUWKHȴQDQFLDO Group maintain proper books of accounts
preparation, as required by the
year ended 31st December 2022. and review the financial reporting system
Companies Act. The Accounts have been
directly at their regular meetings and also
reviewed by the Board Audit Committee
through the Board Audit Committee.

STATEMENT OF DIRECTORS’ RESPONSIBILITY

FOR FINANCIAL REPORTING
The Report of the Board Audit Committee As required by Section 56(2) of the The digital version of the Sampath Bank
is given on pages 190 to 193. The Board Companies Act, the Directors have made PLC Annual Report 2022 has also been
of Directors reviews the Interim Financial an assessment of the Solvency of the uploaded to the CSE website within the
Statements with due consideration Bank, immediately after the payment of stipulated period of time as required by
to the recommendation of the proposed final dividend of Rs 4.60 per the Sections 7.5(a) and (b) of the Listing
Board Audit Committee. Interim Financial share (Rs 3.45 per share in cash and Rules of the CSE.
Statements are approved by the Board Rs 1.15 per share in scrip) for the year
prior to their release. 2022 and confirm that the Bank satisfies COMPLIANCE REPORT
the Solvency Test as required by Section The Directors confirm that to the best of
The Directors have taken all reasonable 57 of the Companies Act. The Directors their knowledge, all taxes, duties and
steps available to them to safeguard the have also obtained the Certificate of levies payable by Sampath Bank and the
assets of the Bank and the Group and to Solvency from the External Auditors. Group, all contributions, levies and taxes
prevent and detect frauds and any other payable on behalf of and in respect of the
irregularities. For this purpose, the Messrs Ernst & Young, have been employees of the Bank and the Group
Directors have instituted effective and provided with every opportunity to and all other known statutory dues as
comprehensive systems of internal undertake the inspections they were due and payable by the Bank and
controls for identifying, recording, considered appropriate. They have the Group as at reporting date, have been
evaluating and managing the significant examined the Financial Statements made paid or, where relevant, provided for,
risks faced by the Bank throughout the available to them by the Directors along except as specified in Note 45 to the
year. These systems are kept under with all financial records, related data, Financial Statements covering contingent
constant review by the Board to ensure minutes of the Shareholders’ Meetings, liabilities. The Directors confirm that
appropriate financial and other controls Directors’ Meetings, Board Audit based on their assessment, the
are in place to enable the Bank to carry Committee Meetings and other Board accounting controls are adequate and
on its operations in an orderly manner, Sub-Committee Meetings and have nothing has come to their attention to
safeguard the assets, prevent and detect expressed their opinion as reported by indicate any breakdown in the functioning
frauds and other irregularities and secure them in the Annual Report on pages 239 of these controls that may result in
as far as practicable, the accuracy and to 242. material loss to the Bank. The Directors
reliability of the records. also confirm that the Bank has adequate
The Directors have ensured that this resources to continue in operational
Based on their assessment of Internal Annual Report has been published in existence and continue as a Going
Control Over Financial Reporting (ICOFR), accordance with the timelines required by Concern for the foreseeable future.
in compliance with Section 3(8)(ii)(b) of the the Sections 166(1) and 167(1) of the
Banking Act Direction No. 11 of 2007 on Companies Act. Printed copies of this The Directors are of the view that they
Corporate Governance for the Licensed Annual Report will be made available to have discharged their responsibilities as
Commercial Banks issued by the Central the shareholders of the Bank who will set out in the above statement.
Bank of Sri Lanka, the Directors have express their desire to receive such a
concluded that, as of 31st December copy. The digital version of the Annual By order of the Board,
2022, the Group’s Internal Controls Over Report is available on the Bank’s
Financial Reporting are effective. corporate website where it is shown
The Directors’ Statement on Internal under the ‘Investors’ tab (https://www.
Control Over Financial Reporting and sampath.lk/en/investor-relations/
LASANTHA SENARATNE
Annual Report of the Board of Directors annual-reports).
on the Affairs of the Company are Company Secretary
provided on pages 232 and 233 and
pages 221 to 231 respectively of this 17th February 2023
Colombo, Sri Lanka
Annual Report. The Independent
Assurance Report on the “Directors
Statement on Internal Control Over
Financial Reporting” issued by the Bank’s www.sampath.lk
External Auditors; Messrs Ernst & Young
is given on page 234 of this Annual
Report.

INDEPENDENT AUDITORS’ REPORT TO THE

SHAREHOLDERS OF SAMPATH BANK PLC
Report on the audit of the financial Basis for opinion context of the audit of the financial
statements statements as a whole, and in forming our
We conducted our audit in accordance
opinion thereon, and we do not provide a
Opinion with Sri Lanka Auditing Standards
separate opinion on these matters. For
We have audited the financial statements (SLAuSs). Our responsibilities under those
each matter below, our description of
of Sampath Bank PLC (“the Bank”) and the standards are further described in the
how our audit addressed the matter is
consolidated financial statements of the Auditor’s responsibilities for the audit of
provided in that context.
Bank and its subsidiaries (“the Group”), the financial statements section of our
which comprise the statement of financial report. We are independent of the Group
We have fulfilled the responsibilities
position as at 31 December 2022, and the in accordance with the Code of Ethics
described in the Auditor’s responsibilities
statement of profit or loss, the statement issued by CA Sri Lanka (Code of Ethics)
for the audit of the financial statements
of comprehensive income, statement of and we have fulfilled our other ethical
section of our report, including in relation
changes in equity and statement of cash responsibilities in accordance with the
to these matters. Accordingly, our audit
flows for the year then ended, and notes Code of Ethics. We believe that the audit
included the performance of procedures
to the financial statements, including a evidence we have obtained is sufficient
designed to respond to our assessment
summary of significant accounting and appropriate to provide a basis for our
of the risks of material misstatement of
policies. opinion.
the financial statements. The results of
our audit procedures, including the
In our opinion, the accompanying Key audit matters
procedures performed to address the
financial statements of the Bank and the Key audit matters are those matters that, matters below, provide the basis for our
Group gives a true and fair view of the in our professional judgment, were of audit opinion on the accompanying
financial position of the Bank and the most significance in the audit of the financial statements.
Group as at 31 December 2022, and of its financial statements of the current period.
financial performance and its cash flows These matters were addressed in the
for the year then ended in accordance
with Sri Lanka Accounting Standards.
Key audit matter How our audit addressed the key audit matter
Provision for credit impairment on In addressing the adequacy of the provision for credit impairment on financial
financial assets carried at amortised cost assets carried at amortized cost, our audit procedures included the following key
procedures.
Provision for credit impairment on financial
assets carried at amortised cost as stated in We assessed the alignment of the Bank’s provision for credit impairment
Notes 25.2 & 26.3 is determined by computations and underlying methodology including responses to market
management in accordance with the economic volatility with its accounting policies, based on the best available
accounting policies described in Note 3.4.6. information up to the date of our report.
• We evaluated the internal controls over estimation of credit impairment, which

This was a key audit matter due to the
included assessing the level of oversight, review and approval of provision for
materiality of the reported provision for
credit impairment policies and procedures by the Board and management.
credit impairment which involved complex
calculations; degree of judgements, • We checked the completeness and accuracy of the underlying data used in
significance of assumptions and level of the impairment computation by agreeing details to relevant source
estimation uncertainty associated with documents and accounting records of the Bank.
estimating future cashflows management
expects to receive from such financial assets.


Key audit matter How our audit addressed the key audit matter
Key areas of significant judgements • In addition to the above, the following procedures were performed:
estimates and assumptions used by
For loans and advances assessed on an individual basis for impairment:
management in the assessment of the
provision for credit impairment included the - We evaluated the reasonableness of credit quality assessments.
following; - We checked the arithmetical accuracy of the underlying individual
impairment calculations.
- management overlays to incorporate the - We evaluated the reasonableness of key inputs used in the provision for
current economic contraction. credit impairment made with particular focus on current economic
contractions. Such evaluations were carried out considering the value and
- the incorporation of forward-looking timing of cash flow forecasts particularly relating to elevated risk
information such that expected industries, debt moratoriums and status of recovery actions of the
cashflows reflect current and anticipated collaterals.
future external factors, in the multiple For financial assets assessed on a collective basis for impairment:
economic scenarios and the probability
- We tested the key inputs and the calculations used in the provision for
weighting determined for each of these credit impairment.
scenarios.
- We assessed whether judgements, assumptions and estimates used by
the Management when estimating future cashflows, in the underlying
methodology and the management overlays were reasonable. Our testing
included evaluating the reasonableness of forward-looking information
used based on available market data, economic scenarios considered,
and probability weighting assigned to each of those scenarios.
• We assessed the adequacy of the related financial statement disclosures set
out in notes 25, 26 & 51.2
Information Technology (IT) systems and Our audit procedures included the following key procedures:
controls over financial reporting - We obtained an understanding of the internal control environment of the
processes and test checked relevant controls relating to financial reporting
Bank’s financial reporting process is and related disclosures.
significantly reliant on multiple IT systems
- We identified and test checked relevant controls of IT systems related to the
with automated processes and internal
Bank’s financial reporting process.
controls. Further, key financial statement
disclosures are prepared using data and - We involved our internal specialized resources to check and evaluate the
design and operating effectiveness of IT systems and relevant controls,
reports generated by IT systems, that are
including those related to user access and change management.
compiled and formulated with the use of
spreadsheets. - We also obtained a high-level understanding, primarily through inquiry, of
the cybersecurity risks affecting the bank and the actions taken to address
these risks.
Accordingly, IT systems and related internal
controls over financial reporting were - We checked source data of the reports used to generate disclosures for
accuracy and completeness, including review of the general ledger
considered a key audit matter.
reconciliations.

Other information included in the In preparing the financial statements, a basis for our opinion. The risk of
Bank’s 2022 Annual Report management is responsible for assessing not detecting a material
the Bank’s ability to continue as a going misstatement resulting from fraud is
Other information consists of the
concern, disclosing as applicable, matters higher than for one resulting from
information included in the Annual
related to going concern and using the error, as fraud may involve collusion,
Report, other than the financial
going concern basis of accounting unless forgery, intentional omissions,
statements and our auditor’s report
management either intends to liquidate misrepresentations, or the override
thereon. Management is responsible for
the Bank or to cease operations, or has of internal control.
the other information.
no realistic alternative but to do so.
• Obtain an understanding of internal
Our opinion on the financial statements control relevant to the audit in order
Those charged with governance are
does not cover the other information and to design audit procedures that are
responsible for overseeing the Bank’s
we do not express any form of assurance appropriate in the circumstances, but
financial reporting process.
conclusion thereon. not for the purpose of expressing an
Auditor’s responsibilities for the opinion on the effectiveness of the
In connection with our audit of the Bank’s internal controls.
audit of the financial statements
financial statements, our responsibility is
to read the other information and, in Our objectives are to obtain reasonable • Evaluate the appropriateness of
doing so, consider whether the other assurance about whether the financial accounting policies used and the
information is materially inconsistent with statements as a whole are free from reasonableness of accounting
the financial statements or our knowledge material misstatement, whether due to estimates and related disclosures
obtained in the audit or otherwise fraud or error, and to issue an auditor’s made by management.
appears to be materially misstated. report that includes our opinion.
Reasonable assurance is a high level of • Conclude on the appropriateness of
If, based on the work we have performed, assurance, but is not a guarantee that an management’s use of the going
we conclude that there is a material audit conducted in accordance with concern basis of accounting and,
misstatement of this other information, SLAuSs will always detect a material based on the audit evidence
we are required to report that fact. We misstatement when it exists. obtained, whether a material
have nothing to report in this regard. Misstatements can arise from fraud or uncertainty exists related to events
error and are considered material if, or conditions that may cast significant
Responsibilities of management and individually or in the aggregate, they could doubt on the Bank’s ability to
those charged with governance for reasonably be expected to influence the continue as a going concern. If we
the financial statements economic decisions of users taken on the conclude that a material uncertainty
basis of these financial statements. exists, we are required to draw
Management is responsible for the
attention in our auditor’s report to
preparation of financial statements that
As part of an audit in accordance with the related disclosures in the
give a true and fair view in accordance
SLAuSs, we exercise professional financial statements or, if such
with Sri Lanka Accounting Standards, and
judgment and maintain professional disclosures are inadequate, to modify
for such internal control as management
skepticism throughout the audit. We also: our opinion. Our conclusions are
determines is necessary to enable the
based on the audit evidence
preparation of financial statements that
• Identify and assess the risks of obtained up to the date of our
are free from material misstatement,
material misstatement of the financial auditor’s report. However, future
whether due to fraud or error.
statements, whether due to fraud or events or conditions may cause the
error, design and perform audit Bank to cease to continue as a going
procedures responsive to those risks, concern.
and obtain audit evidence that is
sufficient and appropriate to provide


• Evaluate the overall presentation, Report on other legal and regulatory

structure and content of the financial requirements
statements, including the disclosures,
As required by section 163 (2) of the
and whether the financial statements
Companies Act No. 07 of 2007, we have
represent the underlying transactions
obtained all the information and
and events in a manner that achieves
explanations that were required for the
fair presentation.
audit and, as far as appears from our
We communicate with those charged with examination, proper accounting records
governance regarding, among other have been kept by the Bank.
matters, the planned scope and timing of
the audit and significant audit findings, CA Sri Lanka membership number of the
including any significant deficiencies in engagement partner responsible for
internal control that we identify during signing this independent auditor’s report
our audit. is 1884.
We also provide those charged with

governance with a statement that we
have complied with relevant ethical
requirements regarding independence, 17 February 2023
and to communicate with them all Colombo
relationships and other matters that may
reasonably be thought to bear on our
independence, and where applicable,
related safeguards.
From the matters communicated with

those charged with governance, we
determine those matters that were of
most significance in the audit of the
financial statements of the current period
and are therefore the key audit matters.
We describe these matters in our
auditor’s report unless law or regulation
precludes public disclosure about the
matter or when, in extremely rare
circumstances, we determine that a
matter should not be communicated in
our report because the adverse
consequences of doing so would
reasonably be expected to outweigh the
public interest benefits of such
communication.

FINANCIAL STATEMENT HIGHLIGHTS
Gross Income Net Interest Margin Net Fee & Commission Income
Rs Bn % Rs Bn
200 6 20
5
150 88.9% 205 bps 15 69.4%
4
100 3 10
2
50 5
1
2021 104.6
2022 197.6
2021 3.61
2022 5.66
2021 11.5
2022 19.4
0 0 0
3UR΋WEHIRUH$OO7D[HV 3UR΋WDIWHU7D[ Earnings per Share

Rs Bn Rs Bn Rs
25 15 12
20 12 10
5.4% 5.4%
8
15 9
6
10 2.6% 6
4
5 3 2
2021 10.89
2022 11.48
2021 20.7
2022 20.2
2021 12.5
2022 13.1
0 0 0
Financial Assets at Amortised Cost Financial Liabilities at Amortised Cost

Total Assets - Net Loans & Advances - Due to Depositors
Rs Bn Rs Bn Rs Bn
1,500 1,000 1,200
800 6.4% 1,000 12.1%

1,200 10.4%
800
900 600
600
600 400
400
300 200 200
2022 1,096.1
2021 1,199.9
2022 1,324.4
2021 762.6
2022 811.2
2021 977.9
0 0 0

STATEMENT OF PROFIT OR LOSS
Bank Group
For the year ended 31st December Note 2022 2021 Change 2022 2021 Change
Rs 000 Rs 000 % Rs 000 Rs 000 %
Gross income 6 197,570,518 104,570,303 88.9 206,002,254 113,075,143 82.2
Interest income 157,619,458 85,986,952 83.3 164,775,651 92,427,928 78.3

Less: Interest expense 84,117,088 44,317,761 89.8 88,733,558 46,909,728 89.2
Net interest income 7 73,502,370 41,669,191 76.4 76,042,093 45,518,200 67.1
Fee & commission income 21,940,763 13,239,648 65.7 22,685,656 14,236,984 59.3
Less: Fee & commission expense 2,499,396 1,764,995 41.6 2,500,860 1,765,975 41.6
Net fee & commission income 8 19,441,367 11,474,653 69.4 20,184,796 12,471,009 61.9
Net (loss)/gain from trading 9 (2,248,355) 399,243 (663.2) (2,266,306) 399,243 (667.7)
1HWJDLQRQGHUHFRJQLWLRQRIȴQDQFLDODVVHWV 10 541,825 150,413 260.2 559,216 150,413 271.8
Net other operating income 11 19,716,827 4,794,047 311.3 20,248,037 5,860,575 245.5
Total operating income 110,954,034 58,487,547 89.7 114,767,836 64,399,440 78.2
Less: Impairment charge 12 62,706,010 17,084,814 267.0 62,908,121 18,559,200 239.0

Net operating income 48,248,024 41,402,733 16.5 51,859,715 45,840,240 13.1
Less: Operating expenses

Personnel expenses 13 12,496,048 9,542,996 30.9 13,878,531 10,916,278 27.1
Depreciation & amortisation expenses 14 2,544,968 2,454,371 3.7 2,396,761 2,491,340 (3.8)
Other operating expenses 15 13,006,891 8,670,697 50.0 13,613,025 9,311,739 46.2
Total operating expenses 28,047,907 20,668,064 35.7 29,888,317 22,719,357 31.6
2SHUDWLQJSUR΋WEHIRUHWD[HVRQ΋QDQFLDO
services 20,200,117 20,734,669 (2.6) 21,971,398 23,120,883 (5.0)
/HVV9DOXHDGGHGWD[RQȴQDQFLDOVHUYLFHV 4,953,917 3,900,725 27.0 5,340,457 4,295,777 24.3

Social security contribution levy 222,054 - 100.0 236,322 - 100.0
7RWDOWD[HVRQ΋QDQFLDOVHUYLFHV 5,175,971 3,900,725 32.7 5,576,779 4,295,777 29.8
3UR΋WEHIRUHLQFRPHWD[ 15,024,146 16,833,944 (10.8) 16,394,619 18,825,106 (12.9)
Less: Income tax expense 16 1,889,994 4,376,447 (56.8) 2,334,109 4,968,645 (53.0)
3UR΋WIRUWKH\HDU 13,134,152 12,457,497 5.4 14,060,510 13,856,461 1.5
Attributable to:
Equity holders of the Bank 13,134,152 12,457,497 5.4 14,060,510 13,856,461 1.5
Non-controlling interest - - -
13,134,152 12,457,497 5.4 14,060,510 13,856,461 1.5
Earnings per share: Basic/Diluted (Rs) 17 11.48 10.89 5.4 12.29 12.11 1.5
Dividend per share 18

Dividend per share: Gross (Rs) 4.60* 4.25
Dividend per share: Net (Rs) 3.91* 4.25
* Based on proposed dividend which is to be approved at the Annual General Meeting.

The Notes to the Financial Statements from pages 253 to 409 form an integral part of these Financial Statements.

STATEMENT OF COMPREHENSIVE INCOME
Bank Group
For the year ended 31st December 2022 2021 Change 2022 2021 Change
Rs 000 Rs 000 % Rs 000 Rs 000 %
3UR΋WIRUWKH\HDU 13,134,152 12,457,497 5.4 14,060,510 13,856,461 1.5
Other comprehensive income

ΖWHPVWKDWZLOOEHUHFODVVLȴHGWRSURȴWRUORVV
Debt instruments at fair value through other
comprehensive income:
Loss arising on re-measurement (4,477,620) (1,381,203) (224.2) (4,477,620) (1,381,203) (224.2)
5HFODVVLȴFDWLRQWRSURȴWRUORVVGXHWR
derecognition 13,481 (30,313) 144.5 13,481 (30,313) 144.5
Changes in impairment for expected credit losses 538,230 34,373 1,465.9 538,230 34,373 1,465.9
5HFODVVLȴFDWLRQRIWUHDVXU\ERQGVDW)92&ΖWR
amortised cost 4,787,611 - 100.0 4,787,611 - 100.0
'HIHUUHGWD[H΍HFWLQFOXGLQJWKHH΍HFWRIUDWH
change on the opening balance (167,626) 325,010 (151.6) (167,626) 325,010 (151.6)
Net other comprehensive income to be
UHFODVVL΋HGWRSUR΋WRUORVV 694,076 (1,052,133) 166.0 694,076 (1,052,133) 166.0
ΖWHPVWKDWZLOOQRWEHUHFODVVLȴHGWRSURȴWRUORVV
Equity instruments at fair value through other
comprehensive income:
(Loss)/gain arising on re-measurement (3,213,837) 670,639 (579.2) (3,213,837) 670,639 (579.2)
([FKDQJHGL΍HUHQFHLQWUDQVODWLRQ 3,433,832 290,118 1,083.6 3,433,832 290,118 1,083.6
change on the opening balance (284,058) (121,092) (134.6) (284,058) (121,092) (134.6)
(64,063) 839,665 (107.6) (64,063) 839,665 (107.6)
$FWXDULDOJDLQRQGHȴQHGEHQHȴWSODQV 1,146,179 2,804,233 (59.1) 1,157,109 2,810,748 (58.8)

change on the opening balance (203,418) (878,809) 76.9 (205,712) (881,212) 76.7
942,761 1,925,424 (51.0) 951,397 1,929,536 (50.7)
Revaluation surplus on property, plant & equipment 977,915 - 100.0 1,854,607 - 100.0
change on the opening balance (542,841) 166,311 (426.4) (1,055,321) 331,244 (418.6)
435,074 166,311 161.6 799,286 331,244 141.3
Net other comprehensive income not to be

UHFODVVL΋HGWRSUR΋WRUORVV 1,313,772 2,931,400 (55.2) 1,686,620 3,100,445 (45.6)
Other comprehensive income net of tax 2,007,848 1,879,267 6.8 2,380,696 2,048,312 16.2
Total comprehensive income for the year
net of tax 15,142,000 14,336,764 5.6 16,441,206 15,904,773 3.4
Attributable to:
Equity holders of the Bank 15,142,000 14,336,764 5.6 16,441,206 15,904,773 3.4
15,142,000 14,336,764 5.6 16,441,206 15,904,773 3.4

STATEMENT OF FINANCIAL POSITION
Bank Group
As at 31st December Note 2022 2021 Change 2022 2021 Change
Rs 000 Rs 000 % Rs 000 Rs 000 %
ASSETS
Cash & cash equivalents 20 79,162,545 22,882,999 245.9 79,344,587 23,027,588 244.6
Balances with Central Bank of Sri Lanka 21 31,579,185 30,874,556 2.3 31,579,185 30,874,556 2.3
Placements with banks 22 10,927,216 2,739,514 298.9 10,927,216 2,739,514 298.9
Reverse repurchase agreements 10,072,569 2,752,011 266.0 10,299,569 4,861,922 111.8
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 23 44,598 1,399,119 (96.8) 44,598 1,399,119 (96.8)
)LQDQFLDODVVHWVUHFRJQLVHGWKURXJKSURȴW
or loss - measured at fair value 24 4,641,277 3,907,704 18.8 4,822,395 3,907,704 23.4
Financial assets at amortised cost
- loans & advances 25 811,157,649 762,588,294 6.4 839,976,738 795,804,353 5.6
- debt & other instruments 26 278,775,796 293,766,967 (5.1) 284,237,662 294,667,208 (3.5)
Financial assets - fair value through other
comprehensive income 27 32,772,930 43,004,145 (23.8) 32,772,986 43,004,201 (23.8)
Investment in subsidiaries 28 3,898,512 3,503,350 11.3 - - -
Property, plant & equipment 29 8,910,525 7,817,923 14.0 19,067,412 16,337,516 16.7
Intangible assets 30 578,031 544,916 6.1 600,341 567,681 5.8
Right-of-use assets 31 3,540,286 3,265,318 8.4 3,265,770 3,031,790 7.7
Current tax receivables 39 - - - - 4,177 (100.0)
Deferred tax assets 32 21,734,244 6,157,958 252.9 21,992,147 6,242,982 252.3
Other assets 33 26,630,974 14,708,621 81.1 28,388,956 16,162,339 75.6
Total Assets 1,324,426,337 1,199,913,395 10.4 1,367,319,562 1,242,632,650 10.0
LIABILITIES
Due to banks 34 11,297,181 23,653,247 (52.2) 15,255,184 31,532,293 (51.6)
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 23 1,449,393 607,923 138.4 1,449,393 607,923 138.4
Securities sold under repurchase
agreements 2,283,291 4,157,662 (45.1) 2,283,291 4,157,662 (45.1)
Financial liabilities at amortised cost
- due to depositors 35 1,096,099,874 977,945,952 12.1 1,115,155,879 994,317,574 12.2
- due to other borrowers 36 9,173,923 14,434,115 (36.4) 9,173,923 14,434,115 (36.4)
- due to debt securities holders 37 25,259,536 31,006,592 (18.5) 32,872,261 37,274,207 (11.8)
5HWLUHPHQWEHQHȴWREOLJDWLRQ 38 1,845,228 2,573,127 (28.3) 1,998,238 2,706,462 (26.2)
Dividend payable 187,141 148,032 26.4 187,141 148,032 26.4
Current tax liabilities 39 18,754,155 7,524,844 149.2 19,186,239 8,375,511 129.1
Deferred tax liabilities 32 - - - 1,465,662 979,815 49.6
Other liabilities 40 31,696,670 19,110,242 65.9 32,741,284 20,913,538 56.6
Total Liabilities 1,198,046,392 1,081,161,736 10.8 1,231,768,495 1,115,447,132 10.4

Bank Group
As at 31st December Note 2022 2021 Change 2022 2021 Change
Rs 000 Rs 000 % Rs 000 Rs 000 %
EQUITY
Stated capital 41 47,622,493 47,622,493 - 47,622,493 47,622,493 -
Reserves
Statutory reserve fund 42 5,755,000 5,075,000 13.4 6,033,000 5,315,000 13.5
Other reserves 43 64,832,981 57,247,452 13.3 68,330,919 60,381,178 13.2
Retained earnings 44 8,169,471 8,806,714 (7.2) 13,564,655 13,866,847 (2.2)
Total equity attributable to equity holders
of the Bank 126,379,945 118,751,659 6.4 135,551,067 127,185,518 6.6
Total Equity 126,379,945 118,751,659 6.4 135,551,067 127,185,518 6.6
Total Liabilities & Equity 1,324,426,337 1,199,913,395 10.4 1,367,319,562 1,242,632,650 10.0
Commitments & contingencies 45 315,363,167 392,079,682 (19.6) 314,491,810 389,844,633 (19.3)
Net asset value per share (Rs) 46 110.44 103.77 6.4 118.45 111.14 6.6
I certify that these Financial Statements are presented in compliance with the requirements of the Companies Act No. 07 of 2007.
AJANTHA DE VAS GUNASEKARA

([HFXWLYH'LUHFWRU&KLHI)LQDQFLDO2ɝFHU
The Board of Directors is responsible for these Financial Statements.

Approved and signed for and on behalf of the Board,
HARSHA AMARASEKERA NANDA FERNANDO RUSHANKA SILVA LASANTHA SENARATNE

Chairman Managing Director Deputy Chairman Company Secretary
17th February 2023

Colombo, Sri Lanka

248
Bank Stated Statutory Other Reserves Retained Total Equity

Capital Reserve Revaluation FVOCI General Earnings
Fund Reserve Reserve Reserve
(Note 41) (Note 42) (Note 43.1) (Note 43.2) (Note 43.3) (Note 44)
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Balance as at 1st January 2021 47,622,493 4,450,000 2,993,599 1,838,203 46,455,786 4,188,723 107,548,804
Total comprehensive income for the year 2021
3URȴWIRUWKH\HDU - - - - - 12,457,497 12,457,497
Other comprehensive income - - 166,311 (212,468) - 1,925,424 1,879,267
ABOUT

Total comprehensive income for the year 2021 - - 166,311 (212,468) - 14,382,921 14,336,764
Transactions with equity holders, recognised directly in equity, contributions
by and distributions to equity holders
Final dividend for 2020: cash - - - - - (3,147,028) (3,147,028)
Unclaimed dividend adjustments - - - - 13,119 - 13,119
Total contributions by and distributions to equity holders - - - - 13,119 (3,147,028) (3,133,909)
Realised gain (net of tax) from derecognition of equity instruments at FVOCI - - - (7,098) - 7,098 -
Transfer to reserves during the year - 625,000 - - 6,000,000 (6,625,000) -
Balance as at 31st December 2021 47,622,493 5,075,000 3,159,910 1,618,637 52,468,905 8,806,714 118,751,659
Balance as at 1st January 2022 47,622,493 5,075,000 3,159,910 1,618,637 52,468,905 8,806,714 118,751,659
Adjustment for Surcharge Tax levied under the Surcharge Tax Act No. 14 of 2022 - - - - - (2,670,567) (2,670,567)
Adjusted balance as at 1st January 2022 47,622,493 5,075,000 3,159,910 1,618,637 52,468,905 6,136,147 116,081,092
3URȴWIRUWKH\HDU - - - - - 13,134,152 13,134,152
Other comprehensive income - - 435,074 630,013 - 942,761 2,007,848

Total comprehensive income for the year 2022 - - 435,074 630,013 - 14,076,913 15,142,000
Transactions with equity holders, recognised directly in equity, contributions
by and distributions to equity holders
Final dividend for 2021: cash - - - - - (4,863,589) (4,863,589)
Unclaimed dividend adjustments - - - - 20,442 - 20,442
Total contributions by and distributions to equity holders - - - - 20,442 (4,863,589) (4,843,147)
STATEMENT OF CHANGES IN EQUITY
Transfer to reserves during the year - 680,000 - - 6,500,000 (7,180,000) -

Balance as at 31st December 2022 47,622,493 5,755,000 3,594,984 2,248,650 58,989,347 8,169,471 126,379,945
STRATEGY REPORT
Group Stated Statutory Other Reserves Retained Total Equity Non - Total Equity
Capital Reserve Revaluation FVOCI General Earnings Attributable Controlling
Fund Reserve Reserve Reserve to Equity Interest
Holders of
(Note 41) (Note 42) (Note 43.1) (Note 43.2) (Note 43.3) (Note 44) the Bank
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000

AND ANALYSIS
Balance as at 1st January 2021 47,622,493 4,635,000 5,962,392 1,838,203 46,455,786 7,900,780 114,414,654 - 114,414,654

3URȴWIRUWKH\HDU - - - - - 13,856,461 13,856,461 - 13,856,461
Other comprehensive income - - 331,244 (212,468) - 1,929,536 2,048,312 - 2,048,312
Total comprehensive income for the year 2021 - - 331,244 (212,468) - 15,785,997 15,904,773 - 15,904,773
Transactions with equity holders, recognised directly in equity,
contributions by and distributions to equity holders
Final dividend for 2020: cash - - - - - (3,147,028) (3,147,028) - (3,147,028)
Unclaimed dividend adjustments - - - - 13,119 - 13,119 - 13,119
Total contributions by and distributions to equity holders - - - - 13,119 (3,147,028) (3,133,909) - (3,133,909)
GOVERNANCE AND
RISK MANAGEMENT
Realised gain (net of tax) from derecognition of equity

instruments at FVOCI - - - (7,098) - 7,098 - - -
Transfer to reserves during the year - 680,000 - - 6,000,000 (6,680,000) - - -
Balance as at 31st December 2021 47,622,493 5,315,000 6,293,636 1,618,637 52,468,905 13,866,847 127,185,518 - 127,185,518
Balance as at 1st January 2022 47,622,493 5,315,000 6,293,636 1,618,637 52,468,905 13,866,847 127,185,518 - 127,185,518
Adjustment for Surcharge Tax levied under the Surcharge
Tax Act No. 14 of 2022 - - - - - (3,232,510) (3,232,510) - (3,232,510)
Adjusted balance as at 1st January 2022 47,622,493 5,315,000 6,293,636 1,618,637 52,468,905 10,634,337 123,953,008 - 123,953,008
3URȴWIRUWKH\HDU - - - - - 14,060,510 14,060,510 - 14,060,510
Other comprehensive income - - 799,286 630,013 - 951,397 2,380,696 - 2,380,696
Total comprehensive income for the year 2022 - - 799,286 630,013 - 15,011,907 16,441,206 - 16,441,206
Transactions with equity holders, recognised directly in equity,
contributions by and distributions to equity holders
Final dividend for 2021: cash - - - - - (4,863,589) (4,863,589) - (4,863,589)
Unclaimed dividend adjustments - - - - 20,442 - 20,442 - 20,442
Total contributions by and distributions to equity holders - - - - 20,442 (4,863,589) (4,843,147) - (4,843,147)
Transfer to reserves during the year - 718,000 - - 6,500,000 (7,218,000) - - -
Balance as at 31st December 2022 47,622,493 6,033,000 7,092,922 2,248,650 58,989,347 13,564,655 135,551,067 - 135,551,067
INFORMATION
SUPPLEMENTARY

249
STATEMENT OF CASH FLOWS
Bank Group
For the year ended 31st December Note 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
&DVKΌRZVIURPRSHUDWLQJDFWLYLWLHV
Interest receipts 142,302,283 76,866,422 149,076,097 83,392,263
Interest payments (71,003,192) (43,695,551) (74,978,503) (46,500,115)
Net commission receipts 19,436,145 11,414,982 20,179,574 12,411,338
Cash payments to employees (11,540,242) (9,612,570) (12,881,663) (10,953,167)
7D[HVRQȴQDQFLDOVHUYLFHV (3,905,145) (4,840,804) (4,311,899) (5,259,880)
Receipts from other operating activities 1,549,881 429,878 2,475,703 1,652,413
Cash payments to other operating activities (12,472,909) (8,050,975) (13,637,995) (8,258,051)
2SHUDWLQJSUR΋WEHIRUHFKDQJHVLQRSHUDWLQJDVVHWV OLDELOLWLHV 1RWH$ 64,366,821 22,511,382 65,921,314 26,484,801
(Increase)/decrease in operating assets

Balances with Central Bank of Sri Lanka (704,629) (17,539,378) (704,629) (17,539,378)
Financial assets at amortised cost - loans & advances (19,883,211) (38,982,849) (15,197,151) (41,558,757)
Other assets (11,082,349) (8,726,819) (11,437,568) (9,125,486)
(31,670,189) (65,249,046) (27,339,348) (68,223,621)
(Decrease)/increase in operating liabilities

Due to banks (16,630,586) (13,169,339) (20,964,596) (13,120,522)
Re-purchase agreements (2,019,286) 782,781 (2,019,286) 1,875,781
Financial liabilities at amortised cost - due to depositors 9,159,796 81,985,590 11,407,514 81,810,841
Financial liabilities at amortised cost - due to other borrowers (5,253,119) (918,591) (5,253,119) (918,591)
Other liabilities 9,275,832 (412,389) 9,163,991 (364,703)
(5,467,363) 68,268,052 (7,665,496) 69,282,806
Net cash generated from operating activities

before income & surcharge taxes 27,229,269 25,530,388 30,916,470 27,543,986
Income tax & surcharge tax paid (10,105,479) (3,558,857) (11,727,749) (3,788,355)
Net cash generated from operating activities 17,123,790 21,971,531 19,188,721 23,755,631
&DVKΌRZVIURPLQYHVWLQJDFWLYLWLHV
Purchase of property, plant & equipment 29.1 & 29.2 (887,298) (466,451) (2,080,445) (1,679,810)
Proceeds from disposal of property, plant & equipment 1,905 9,716 3,777 46,931
1HWFDVKȵRZIURPUHYHUVHUHSXUFKDVHDJUHHPHQWV (7,250,000) 1,700,000 (5,367,089) 1,371,251
1HWFDVKȵRZIURPȴQDQFLDODVVHWV)93/ (231,345) 5,282,016 (413,023) 5,282,016
1HWFDVKȵRZIURPGHEWLQVWUXPHQWVDWDPRUWLVHGFRVW 56,989,231 (12,244,128) 52,427,606 (13,110,225)
1HWFDVKȵRZIURPȴQDQFLDODVVHWV)92&Ζ 3,028,313 (18,772,514) 3,028,313 (18,772,514)
Purchase of intangible assets 30 (309,934) (181,605) (321,964) (191,750)
'LYLGHQGUHFHLYHGIURPȴQDQFLDODVVHWV 162,317 174,368 162,557 174,608
Dividend received from subsidiaries - 5,123 - -
Net cash generated from/(used in) investing activities 51,503,189 (24,493,475) 47,439,732 (26,879,493)
&DVKΌRZVIURP΋QDQFLQJDFWLYLWLHV
Proceeds from the issue of debentures 37.1 - 6,000,000 - 7,500,000
Redemption of debentures 37.1 (6,000,000) (6,000,000) (7,000,000) (7,078,010)
Net proceeds from securitisation - - 2,163,000 (447,110)
Dividend paid (4,863,589) (3,147,028) (4,863,589) (3,147,028)
Repayment of principal portion of lease liabilities (1,203,807) (1,335,139) (721,391) (728,618)
1HWFDVKXVHGLQ΋QDQFLQJDFWLYLWLHV (12,067,396) (4,482,167) (10,421,980) (3,900,766)
Net cash generated/(used) during the year 56,559,583 (7,004,111) 56,206,473 (7,024,628)
1HWIRUHLJQH[FKDQJHGL΍HUHQFH 8,357,060 214,987 8,357,060 214,987
Cash & cash equivalents at the beginning of the year 25,155,288 31,944,412 25,299,191 32,108,832
Cash & cash equivalents at the end of the year (Note B) 90,071,931 25,155,288 89,862,724 25,299,191
7KHFRPSDUDWLYHLQIRUPDWLRQRIWKH6WDWHPHQWRI&DVK)ORZVKDVEHHQUHFODVVLȴHGWRFRQIRUPWRWKHFXUUHQW\HDUȇVSUHVHQWDWLRQ

NOTE (A) RECONCILIATION OF OPERATING PROFIT BEFORE CHANGES IN OPERATING ASSETS AND LIABILITIES
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
3URȴWEHIRUHLQFRPHWD[ 15,024,146 16,833,944 16,394,619 18,825,106

Interest income accrued on impaired loans & advances 7.1 (6,278,942) (3,009,971) (6,281,486) (3,027,412)
Net loss/(gain) from trading 9
Forward exchange contract revaluation loss/(gain) 2,195,990 (635,628) 2,195,990 (635,628)
Net mark to market loss - government & equity securities 56,287 238,326 74,238 238,326
Dividend income (3,922) (1,941) (3,922) (1,941)
1HW JDLQ ORVVRQGHUHFRJQLWLRQRIȴQDQFLDODVVHWV 10
Financial assets FVPL (555,306) (114,418) (572,697) (114,418)
Financial assets FVOCI 13,481 (30,313) 13,481 (30,313)
Financial assets - amortised cost - (5,682) - (5,682)
Net other operating income 11
'LYLGHQGLQFRPHIURPȴQDQFLDODVVHWV)92&Ζ (162,245) (172,427) (162,485) (172,667)
Dividend income from subsidiaries (395,163) (157,699) - -
3URȴWRQGLVSRVDORISURSHUW\SODQW HTXLSPHQW (1,641) (2,007) (2,092) (3,459)
Net impairment charge 12 62,706,010 17,084,814 62,908,121 18,559,200
Personnel expenses
Charge/(reversal) on gratuity & pension 13 531,437 (891,364) 572,499 (858,679)
Other non-cash personnel expenses 372,806 344,679 386,808 358,130
Depreciation & amortisation expenses 14
Depreciation of property, plant & equipment 771,878 767,104 1,196,384 1,190,237
Amortisation of intangible assets 279,017 390,304 297,980 415,758
Amortisation of right-of-use assets 1,494,073 1,296,963 902,397 885,345
Accrual for interest & commission income (14,759,565) (8,017,707) (15,139,400) (7,915,400)
Accrual for interest expense 13,113,896 622,210 13,755,055 409,613
Other accruals & non-cash income/expense (10,035,416) (2,027,805) (10,614,176) (1,631,315)
2SHUDWLQJSUR΋WEHIRUHFKDQJHVLQRSHUDWLQJDVVHWVOLDELOLWLHV 64,366,821 22,511,382 65,921,314 26,484,801
NOTE (B) RECONCILIATION OF CASH & CASH EQUIVALENTS
Bank Group
As at 31st December Note 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Local currency in hand 20 18,206,833 19,308,886 18,358,248 19,443,575

Foreign currency in hand 20 3,560,890 692,285 3,560,890 692,285
Balances with local banks 20 174,876 341,803 205,543 351,723
Balances with foreign banks 20 55,413,612 2,137,788 55,413,612 2,137,788
Money at call and short notice 20 1,907,621 500,418 1,907,621 500,418
Placements less than three months 22 10,929,771 2,739,907 10,929,771 2,739,907
Unfavourable balances with local & foreign banks 34.2 (121,672) (565,799) (512,961) (566,505)
Cash & cash equivalents at the end of the year 90,071,931 25,155,288 89,862,724 25,299,191

STATEMENT OF CASH FLOWS
NOTE (C) RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
Bank Group
Debentures Finance Lease Debentures Finance Lease Securitisation
Liability Liability
(Note 37.1) (Note 31.1) (Note 37.1) (Note 31.1) (Note 37)
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Balance as at 1st January 2021 28,031,975 3,779,635 33,872,527 3,210,792 447,924

&DVKȵRZVIURPȴQDQFLQJDFWLYLWLHV
Proceeds from the issue of debentures 6,000,000 - 7,500,000 - -
Redemption of debentures/securitisation (6,000,000) - (7,078,010) - (447,110)
Repayment of principal portion of lease liabilities - (1,335,139) - (728,618) -
Non cash changes
Additions during the year - 1,282,115 - 1,011,474 -
Net accrual/payment of interest (35,856) - (30,783) - (814)
Balance as at 31st December 2021 27,996,119 3,726,611 34,263,734 3,493,648 -
Balance as at 1st January 2022 27,996,119 3,726,611 34,263,734 3,493,648 -

&DVKȵRZVIURPȴQDQFLQJDFWLYLWLHV
Net proceeds from securitisation - - - - 2,163,000
Redemption of debentures (6,000,000) - (7,000,000) - -
Repayment of principal portion of lease liabilities - (1,203,807) - (721,391) -
Non cash changes
Additions during the year - 1,769,040 - 1,136,377 -
Net accrual/payment of interest (22,603) - (53,082) - 212,589
Balance as at 31st December 2022 21,973,516 4,291,844 27,210,652 3,908,634 2,375,589

NOTES TO THE FINANCIAL STATEMENTS
1. REPORTING ENTITY banking, resident and non-resident foreign 2.2. Responsibility for Financial
1.1. General currency operations, electronic banking Statements
services such as: telephone banking,
Sampath Bank PLC ('The Bank'), is a The Board of Directors is responsible for
internet banking, mobile banking and
domiciled, public limited liability company the Financial Statements of the Group
money remittance facilities, pawning,
incorporated in Sri Lanka on 10th March and the Bank as per Sri Lanka Accounting
leasing, factoring, travel related services
1986 under the Companies Act No. 17 of Standards and the provisions of the
and dealing in government securities etc.
1982. It is a Licensed Commercial Bank Companies Act No. 07 of 2007.
registered under the Banking Act No. 30
1.3.2. Subsidiaries
of 1988 (Banking Act) and amendments The Board of Directors acknowledges their
thereto. The Bank was re-registered with Ownership of subsidiaries as of 31st UHVSRQVLELOLW\IRUȴQDQFLDOVWDWHPHQWVDV
the Registrar General of Companies as per December 2022 and 31st December set out in the “Annual Report of the Board
the requirements of the Companies Act 2021 is given in Note 28 to the Financial RI'LUHFWRUVRQWKH$΍DLUVRIWKH&RPSDQ\ȋ
No. 07 of 2007 (Companies Act) on 28th 6WDWHPHQWV7KHUHZHUHQRVLJQLȴFDQW (pages 221 to 231), “Statement of Directors’
April 2008 under the name of Sampath changes in the nature of the principal Responsibility for Financial Reporting” (pages
%DQN3/&7KHUHJLVWHUHGRɝFHRIWKH DFWLYLWLHVRIWKH*URXSGXULQJWKHȴQDQFLDO WR DQGWKHFHUWLȴFDWLRQRQWKH
Bank is located at No. 110, Sir James Peiris year under review. Statement of Financial Position on page 247.
Mawatha, Colombo 02. The shares of the
2. BASIS OF PREPARATION 2.3. Approval of Financial Statements
Bank have a primary listing on the Colombo
Stock Exchange (CSE). The unsecured 2.1. Statement of Compliance by Directors
subordinated debentures of the Bank are The Consolidated Financial Statements The Financial Statements of the Group as
DOVROLVWHGRQWKH&6(7KHVWD΍VWUHQJWK of the Group and the Separate Financial at and for the year ended 31st December
of the Bank as at 31st December 2022 was Statements of the Bank, which comprise 2022 were authorised for issue by the
3,948 (2021: 4,013). the Statement of Financial Position, Board of Directors in accordance with the
6WDWHPHQWRI3URȴWRU/RVV6WDWHPHQW resolution of the Board of Directors on
1.2. Consolidated Financial of Comprehensive Income, Statement of 17th February 2023.
Statements Changes in Equity, Statement of Cash Flows
and Notes to the Financial Statements 2.4. Basis of Measurement
The Consolidated Financial Statements of
the Bank as at and for the year ended 31st have been prepared and presented in The Financial Statements of the Group have
December 2022 comprise the Bank (Parent accordance with Sri Lanka Accounting been prepared on the historical cost basis,
Company) and its Subsidiaries (together Standards (SLFRSs and LKASs) laid down except for the following material items in
referred to as the "Group" and individually by the Institute of Chartered Accountants the Statement of Financial Position:
as "Group entities"). The subsidiaries of of Sri Lanka and in compliance with the
Ì 'HULYDWLYHȴQDQFLDOLQVWUXPHQWVDUH
the Bank as at 31st December 2022 were requirements of the Companies Act No. 07
measured at fair value (Note 23)
Sampath Centre Ltd, SC Securities (Pvt) of 2007. The presentation of the Financial
Ì Financial assets held at fair value
Ltd, Siyapatha Finance PLC and Sampath Statements is also in compliance with the
through other comprehensive
Information Technology Solutions Ltd. requirements of the Banking Act No.30 of
income (FVOCI) are measured at fair
1988 and amendments thereto and provide
value (Note 27)
Sampath Bank PLC is the ultimate parent of appropriate disclosures as required by the
the Group. Listing Rules of the CSE. Ì Financial assets recognised through
profit or loss (FVPL) are measured at
The Financial Statements of all companies The formats used in the preparation and fair value (Note 24)
LQWKH*URXSKDYHDFRPPRQȴQDQFLDO\HDU presentation of the Financial Statements Ì Land and buildings which are
which ends on 31st December. and the disclosures made therein also measured at cost at the time of
FRPSO\ZLWKWKHVSHFLȴHGIRUPDWV acquisition subsequently measured
1.3. Principal Activities and Nature of prescribed by the CBSL in the Circular No. at revalued amounts, which are the
Operations 02 of 2019 on “Publication of Annual and fair values at the date of revaluation
1.3.1. Bank Quarterly Financial Statements and Other (Note 29)
Disclosures by Licensed Banks”. The Bank
The Bank provides a comprehensive Ì Liabilities for defined benefit
DOVRSXEOLVKDQQXDODQGTXDUWHUO\ȴQDQFLDO
UDQJHRIȴQDQFLDOVHUYLFHVHQFRPSDVVLQJ obligations are recognised at the
information and other disclosures in the
accepting deposits, corporate and retail present value of the defined benefit
Press and the Website in compliance with
EDQNLQJSURMHFWȴQDQFLQJWUDGHȴQDQFH obligation less the fair value of the
Section 4.2 of the aforementioned Circular.
treasury and investment services, issuing plan assets (Note 38)
RIFUHGLWFDUGVDQGGHELWFDUGVR΍VKRUH

2.5. Functional and Presentation 2.8. Comparative Information 2.10.1. Going Concern
Currency 7KHFRPSDUDWLYHLQIRUPDWLRQLVUHFODVVLȴHG The Directors have made an assessment of
The Financial Statements of the Group wherever necessary to conform to the the Group's ability to continue as a going
are presented in Sri Lankan Rupees (Rs), FXUUHQW\HDU VFODVVLȴFDWLRQLQRUGHUWR FRQFHUQDQGDUHVDWLVȴHGWKDWLWKDVWKH
which is the currency of the primary provide a better presentation. resources to continue in business for the
economic environment in which Sampath foreseeable future. The Directors have
Bank PLC operates. Financial information 2.9. Statement of Cash Flows considered the impact of the current adverse
presented in Sri Lankan Rupees has been The Statement of Cash Flows has been macro-economic conditions on the business
rounded to the nearest thousand unless prepared by using the direct method in operations of the Group including a possible
indicated otherwise. There was no change accordance with the Sri Lanka Accounting restructuring/hair-cut on government debts,
in the Group's presentation and functional Standard - LKAS 7 (Statement of Cash in making this assessment. Furthermore,
currency during the year under review. Flows), whereby gross cash receipts the Board is not aware of any material
and gross cash payments of operating XQFHUWDLQWLHVWKDWPD\FDVWVLJQLȴFDQW
2.6. Presentation of Financial DFWLYLWLHVȴQDQFLQJDFWLYLWLHVDQGLQYHVWLQJ doubt upon the Group's ability to continue
Statements activities have been recognised. Cash and as a going concern and they do not intend
The assets and liabilities of the Group cash equivalents comprise short term, either to liquidate or to cease operations
presented in the Statement of Financial highly liquid investments that are readily of the Group. Therefore, the Financial
Position are grouped by nature and listed in convertible to known amounts of cash Statements continue to be prepared on the
DQRUGHUWKDWUHȵHFWVWKHLUUHODWLYHOLTXLGLW\ DQGDUHVXEMHFWWRDQLQVLJQLȴFDQWULVNRI going concern basis.
and maturity pattern. No adjustments have changes in value.
EHHQPDGHIRULQȵDWLRQDU\IDFWRUVD΍HFWLQJ 2.10.2. Impairment Losses on Loans and
the Financial Statements. Cash and cash equivalents include cash in Advances
hand, balances with banks, placements with The measurement of impairment losses
An analysis on recovery or settlement banks (less than 3 months), money at call under Sri Lanka Accounting Standards
within 12 months after the reporting and short notice, net of unfavourable local - SLFRS 9 (Financial Instruments) across
date (current) and more than 12 months & foreign bank balances. DOOFDWHJRULHVRIȴQDQFLDODVVHWVUHTXLUHV
after the reporting date (non-current) is judgement. These estimates are driven by
presented in the Note 52 to the Financial 6LJQL΋FDQW$FFRXQWLQJ a number of factors, changes in which can
Statements. Judgments, Estimates and UHVXOWLQGL΍HUHQWOHYHOVRIDOORZDQFHV
Assumptions
2.7. Materiality and Aggregation The preparation of Financial Statements The Group reviews its individually
In compliance with Sri Lanka Accounting of the Group in conformity with Sri Lanka VLJQLȴFDQWORDQVDQGDGYDQFHVDWHDFK
Standard - LKAS 1 (Presentation of Financial Accounting Standards requires the reporting date to assess whether an
Statements), each material class of similar management to make judgments, estimates impairment loss should be recorded in the
items is presented separately in the DQGDVVXPSWLRQVWKDWD΍HFWWKHDSSOLFDWLRQ 6WDWHPHQWRI3URȴWRU/RVVΖQSDUWLFXODU
Financial Statements. Items of dissimilar of accounting policies and the reported management's judgment is required in
nature or functions too are presented amounts of assets, liabilities, income and the estimation of the amount and timing
separately unless they are immaterial. H[SHQVHV$FWXDOUHVXOWVPD\GL΍HUIURP RIIXWXUHFDVKȵRZVZKHQGHWHUPLQLQJWKH
)LQDQFLDODVVHWVDQGȴQDQFLDOOLDELOLWLHVDUH these estimates. impairment loss. Loans and advances that
R΍VHWDQGWKHQHWDPRXQWUHSRUWHGLQ have been assessed individually and found
the Statement of Financial Position only Estimates and underlying assumptions are to be not impaired and all individually
when there is a legally enforceable right to reviewed on an ongoing basis. Revisions LQVLJQLȴFDQWORDQVDQGDGYDQFHVDUHWKHQ
R΍VHWWKHUHFRJQLVHGDPRXQWVDQGWKHUH to accounting estimates are recognised assessed collectively, by categorising them
is an intention to settle on a net basis, or in the period in which the estimate is into groups of assets with similar risk
to realise the assets and settle the liability UHYLVHGDQGLQDQ\IXWXUHSHULRGVD΍HFWHG characteristics, to determine the expected
simultaneously. Income and expenses are 7KHPRVWVLJQLȴFDQWDUHDVRIHVWLPDWLRQ credit loss on such loans and advances.
QRWR΍VHWLQWKH6WDWHPHQWRI3URȴWRU uncertainty and critical judgments in
Loss unless required or permitted by an applying accounting policies that have
Accounting Standard. PRVWVLJQLȴFDQWH΍HFWRQWKHDPRXQWV
recognised in the Financial Statements of
the Group are as follows:

The expected credit loss (ECL) calculation The Group continued to extend the is impaired/having an increased credit risk
under SLFRS 9 requires management to moratorium for eligible borrowers as LQFOXGHVDPRQJRWKHUWKLQJVVLJQLȴFDQW
make judgments and estimates with regard directed by the Central Bank of Sri Lanka ȴQDQFLDOGLɝFXOW\RIWKHLVVXHUDEUHDFKRI
to the following. during the year 2022. All customers who contract such as a default or delinquency
were under moratorium for a prolonged in interest or principal payments etc.
Ì The Group's criteria for assessing if
SHULRGRIWLPHKDYHEHHQFODVVLȴHGDWOHDVW Management judgement has been involved
there has been a significant increase
under stage 2 on a prudent basis even LQGHWHUPLQLQJZKHWKHUWKHUHLVVLJQLȴFDQW
in credit risk and so impairment for
though such customers no longer enjoyed increase in credit risk of these instruments
financial assets should be measured
the moratorium as at 31st December or these instruments are impaired as at
on a lifetime ECL basis
2022. A case-by-case analysis has been WKHUHSRUWLQJGDWH7KH%DQNFODVVLȴHG
Ì Development of ECL models, FRQGXFWHGRQWKHLQGLYLGXDOO\VLJQLȴFDQW its investment in Sri Lanka Development
including various formulas and the FXVWRPHUVDQGFODVVLȴHGDVVWDJHZKHQ Bonds and Sri Lanka Sovereign Bonds
choice of inputs the circumstances demand so. Collateral under stage 2 having considered the
values were appropriately discounted debt restructuring arrangement of the
Ì Selection of forward-looking
WRUHȵHFWWKHFXUUHQWPDUNHWYDOXH7KH government of Sri Lanka.
macroeconomic scenarios and their
exposures which are not individually
probability weightings, to derive the
VLJQLȴFDQWKDYHEHHQPRYHGWRVWDJH (TXLW\LQVWUXPHQWVFODVVLȴHGDV)92&ΖDUH
economic inputs into the ECL model
based on the industry risk of the underlying not subjective for impairment assessment.
borrowers.
It has been the Group's policy to regularly
2.10.4. Fair Value of Financial
review its models in the context of actual
The assumptions used to calculate the Instruments
loss experience and adjust when necessary.
allowance for overlay for moratorium 7KHGHWHUPLQDWLRQRIIDLUYDOXHVRIȴQDQFLDO
The above assumptions and judgments are
loans as at 31st December 2021 were DVVHWVDQGȴQDQFLDOOLDELOLWLHVUHFRUGHG
discussed in detail under Note 3.4.6 to the
Financial Statements.
IXUWKHUȴQHWXQHGGXULQJWKH\HDUEDVHG on the Statement of Financial Position
on the post moratorium movements of the for which there is no observable market
customers’ arrears buckets. Accordingly, price are determined using a variety of
In response to the unprecedented
the allowance for overlay was increased valuation techniques that include the use
macro-economic conditions experienced
for the customers who continued to enjoy of mathematical models. The valuation of
during the year, key assumptions used
further concessions as at 31st December
in the Group’s calculation of ECL have ȴQDQFLDOLQVWUXPHQWVLVGHVFULEHGLQPRUH
2022. Further, additional allowance for detail in Note 3.4.11.
been revised. The economic scenarios
overlay has been recognised on personal
and forward-looking macroeconomic
customers considering the possible The Group measures fair value using
assumptions underpinning the collective
decrease in repayment capacity due to WKHIDLUYDOXHKLHUDUFK\WKDWUHȵHFWVWKH
provision calculation are outlined in Note
LQFUHDVHLQLQȵDWLRQLQWHUHVWUDWHVDQG VLJQLȴFDQFHRILQSXWXVHGLQPDNLQJ
3.4.6.7, while the impact on changing the
income tax rates. measurements. The fair value hierarchy is
ZHLJKWDJHVRIGL΍HUHQWPDFURHFRQRPLF
scenarios during the year are given in given in Note 50.4 and 50.6.
A breakdown of the loans and advances
Note 51.2.1(c). As at the reporting date,
the expected impacts of the adverse
RIWKH%DQN*URXSFODVVLȴHGXQGHUVWDJH 2.10.5. Financial Assets and Liabilities
2 is given in Note 51.2.1(e). Sensitivity of &ODVVL΋FDWLRQ
macro-economic conditions have been
WKHLQGLYLGXDOO\VLJQLȴFDQWORDQLPSDLUPHQW
captured via the modelled outcome as The Group's accounting policies provide
WRUHFRYHU\FDVKȵRZVLVJLYHQLQ1RWH
well as separate management overlays scope for assets and liabilities to be
51.2.1(c) while sensitivity of collective
UHȵHFWLQJWKHFRQVLGHUDEOHXQFHUWDLQW\ FODVVLȴHGDWLQFHSWLRQLQWRGL΍HUHQW
impairment provision to the staging of the
remaining in the modelled outcome. DFFRXQWLQJFDWHJRULHV7KHFODVVLȴFDWLRQ
loans and advances is disclosed in Note
Although the credit model inputs and RIȴQDQFLDOLQVWUXPHQWVLVJLYHQLQ1RWH
51.2.1(d).
assumptions, including forward-looking 19, 'Analysis of Financial Instruments by
macroeconomic assumptions were revised Measurement Basis'.
2.10.3. Impairment of Other Financial
in response to the current economic crisis,
Assets
the fundamental credit model mechanics
and methodology underpinning the The Group reviews its debt securities
Group’s calculation of ECL have remained FODVVLȴHGDV)92&ΖDPRUWLVHGFRVWDWHDFK
consistent with prior periods. reporting date. Objective evidence that a
debt security held at FVOCI/amortised cost

2.10.6. Taxation freehold lands and buildings in terms of accounted for as investment properties. On
the Sri Lanka Accounting Standard-SLFRS the other hand, a property that is used for
The Group is subject to income tax and
13, (Fair Value Measurement). The details operations or in the process of providing
judgment is required to determine the
of freehold land and buildings, including services or for administrative purposes
total provision for current, deferred and
methods of valuation are given in Note and which do not directly generate cash
other taxes due to the uncertainties that
29.3 and 29.4 to the Financial Statements. ȵRZVDVDVWDQGDORQHDVVHWDUHDFFRXQWHG
exist with respect to the interpretation
The Group revalued its freehold lands and for as property, plant and equipment. The
of the applicable tax laws, at the time of
buildings as at 31st December 2022 and Group assesses on an annual basis, the
preparation of these Financial Statements.
necessary adjustments were included in the DFFRXQWLQJFODVVLȴFDWLRQRILWVSURSHUWLHV
ȴQDQFLDOVWDWHPHQWV taking into consideration the current use of
The details of deferred tax computation
such properties. Currently the Group does
is given in Note 32 to the Financial
2.10.9. Useful Lifetime of the Property, not have any investment property.
Statements.
Plant and Equipment
The Group reviews the residual values, 2.10.12. SLFRS 16 – Leases
'H΋QHG%HQH΋W3ODQV
useful lives and methods of depreciation The Group uses its judgment to determine
7KHFRVWRIWKHGHȴQHGEHQHȴWSODQVDQG
of property, plant and equipment at whether an operating lease contract
the present value of their obligations are
each reporting date. Judgment of the TXDOLȴHVIRUUHFRJQLWLRQRIULJKWRIXVH
determined using actuarial valuations.
management is exercised in the estimation assets. It also uses judgement in the
The actuarial valuation involves making
of these values, rates, methods and hence determination of the discount rate in
assumptions about discount rates, future
they are subject to uncertainty. the calculation of the lease liability. The
salary increases, mortality rates and
lease liability is initially measured at the
possible future pension increases if any.
2.10.10. Commitments and Contingencies present value of the lease payments that
Due to the long term nature of these plans,
All discernible risks are accounted for are not paid at the commencement date,
VXFKHVWLPDWHVDUHVXEMHFWWRVLJQLȴFDQW
in determining the amount of all known discounted using the interest rate implicit
uncertainty. All assumptions are reviewed
liabilities. Contingent liabilities are possible in the lease. As the Group cannot readily
at each reporting date.
obligations whose existence will be determine the interest rate implicit in the
In determining the appropriate discount FRQȴUPHGRQO\E\XQFHUWDLQIXWXUHHYHQWV lease, it uses its incremental borrowing
rate, management considers the interest or present obligations where the transfer of rate to measure the lease liability. The
rates of Sri Lanka government bonds with HFRQRPLFEHQHȴWLVQRWSUREDEOHRUFDQQRW incremental borrowing rate is the rate of
maturities corresponding to the expected be reliably measured. Contingent liabilities interest that the Group would have to pay,
GXUDWLRQRIWKHGHȴQHGEHQHȴWREOLJDWLRQ are not recognised in the Statement of to borrow an amount similar to the value
The mortality rate is based on publicly Financial Position but are disclosed unless of the lease asset, over a similar term and
available mortality tables. Future salary they are remote. Details of commitments with similar security in similar economic
increases and pension increases are based and contingencies are given in Note 45. environment. Further, the Group applies
RQH[SHFWHGIXWXUHLQȵDWLRQUDWHDQG judgement in evaluating whether it is
expected future salary increase rates of the &ODVVL΋FDWLRQRI,QYHVWPHQW reasonably certain to renew or terminate
Group. Properties the lease at the end of the lease term.
That is, it considers all relevant factors
Management requires using its judgment
2.10.8. Fair Value of Property, Plant and WKDWFUHDWHDQHFRQRPLFEHQHȴWIRULWWR
WRGHWHUPLQHZKHWKHUDSURSHUW\TXDOLȴHV
Equipment exercise, either the renewal or termination
as an investment property. The Group
option.
The freehold land and buildings of the has developed criteria so it can exercise
*URXSDUHUHȵHFWHGDWIDLUYDOXHDWWKH its judgment consistently. A property
date of revaluation less any accumulated that is held to earn rentals or for capital
depreciation and impairment losses. The appreciation or both and which generates
Group engages independent valuation FDVKȵRZVODUJHO\LQGHSHQGHQWO\RIWKH
specialists to determine fair value of other assets held by the Group are

3. GENERAL ACCOUNTING POLICIES 3.1. Basis of Consolidation

The general accounting policies of the Group have been applied consistently to all periods The Group's Financial Statements comprise
SUHVHQWHGLQWKH)LQDQFLDO6WDWHPHQWVH[FHSWDVVSHFLȴHGLQ1RWH&RPSDUDWLYH consolidation of the Financial Statements
Information. Set out below is an index of accounting policies, the details of which are of the Bank and its subsidiaries in terms of
available on the pages that follow: the Sri Lanka Accounting Standard - SLFRS
10 (Consolidated Financial Statements). The
Note Description Page No. Reference to Other Bank's Financial Statements comprise the
Notes in Financial amalgamation of the Financial Statements
Statements RIWKH'RPHVWLF%DQNLQJ8QLWDQGWKH2΍
Shore Banking Unit.
3 General Accounting Policies
3.1 Basis of Consolidation 257 28 3.2. Business Combinations and
3.2 Business Combinations and Goodwill 257 28 Goodwill
3.3 Foreign Currency Transactions and 258 9,11 Business combinations are accounted
Balances for using the acquisition method as per
3.4 Financial Instruments - Initial Recognition, 258 - 269 12,19,20,22 to 27, 34 the requirements of Sri Lanka Accounting
&ODVVLȴFDWLRQDQG6XEVHTXHQW to 37,43.2,45 Standard-SLFRS 3 (Business Combinations).
Measurement
3.5 Leases 269 31 The Group measures goodwill as the fair
3.6 Fiduciary Assets 270 value of the consideration transferred
3.7 Provisions 270 15 including the recognised amount of any
3.8 Operational Risk Events 270 15 non-controlling interest in the acquiree,
3.9 Impairment of Non-Financial 270 less the net recognised amount (generally
Assets IDLUYDOXH RIWKHLGHQWLȴDEOHDVVHWV
3.10 Other Taxes 270 acquired and liabilities assumed, all
3.11 Regulatory Provisions 270 15 measured as of the acquisition date. The
4 New Accounting Standards Issued during 271 consideration transferred does not include
the Year/Changes to already Existing amounts related to the settlement of pre-
Accounting Standards existing relationships. Such amounts are
5 Accounting Standards Issued but Not Yet 271 JHQHUDOO\UHFRJQLVHGLQSURȴWRUORVV:KHQ
(΍HFWLYHDVDWVW'HFHPEHU excess is negative, a bargain purchase gain
7 Net Interest Income 272 LVUHFRJQLVHGLPPHGLDWHO\LQSURȴWRUORVVLI
8 Net Fee and Commission Income 273 controlling power is acquired.
9 Net (Loss)/Gain from Trading 274
10 Net Gain on Derecognition of Financial 275 The changes in parent's ownership interest
Assets in a subsidiary that do not result in the
13 Personnel Expenses 277 - 279 38 parent losing control of the subsidiary are
14 Depreciation and Amortisation Expenses 280 29, 30, 31 equity transactions. The Group elects on a
16 Income Tax Expense 282 32,39
transaction-by-transaction basis whether to
17 Earnings Per Share 284
measure non-controlling interest at its fair
28 Investment in Subsidiaries 308 - 309
value, or at its proportionate share of the
29 Property Plant and Equipment 310 - 311 14, 43.1
UHFRJQLVHGDPRXQWRIWKHLGHQWLȴDEOHQHW
30 Intangible Assets 319 14
assets, at the acquisition date. Transaction
47 Related Party Disclosures 347 - 350
costs, other than those associated with the
48 Segment Information 351
issue of debt or equity securities, that the
49 Events after the Reporting Period 353 18
Group incurs in connection with a business
50 Fair Value of Assets and Liabilities 353 - 354
combination are expensed as incurred.
51 Risk Management 361 - 362

3.3. Foreign Currency Transactions gains or losses are dealt within the technique whose variables include only
and Balances 6WDWHPHQWRI3URȴWRU/RVVXQGHU 1HWJDLQ data from observable markets, the Group
loss from trading'. UHFRJQLVHVWKHGL΍HUHQFHEHWZHHQWKH
All foreign currency transactions are
transaction price and fair value ('Day 1'
translated into the functional currency,
3.4. Financial Instruments - Initial SURȴWRUORVV LQWKH6WDWHPHQWRI3URȴW
which is Sri Lankan Rupees, using the
5HFRJQLWLRQ&ODVVL΋FDWLRQDQG RU/RVVRYHUWKHWHQRURIWKHȴQDQFLDO
exchange rates prevailing at the dates of
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3.4.1. Date of Recognition rate method. In cases where fair value
is determined using data which is not
Monetary assets and liabilities Financial assets and liabilities, with the
REVHUYDEOHWKHGL΍HUHQFHEHWZHHQWKH
denominated in foreign currencies at exception of loans and advances to
transaction price and model value is only
the reporting date are translated to Sri customers and balances due to customers,
UHFRJQLVHGLQWKH6WDWHPHQWRI3URȴWRU
Lankan Rupees using the spot foreign are initially recognised on the trade date,
Loss when the inputs become observable,
exchange rate ruling at that date and all i.e. the date that the Group becomes a
or when the instrument is derecognised.
GL΍HUHQFHVDULVLQJRQQRQWUDGLQJDFWLYLWLHV party to the contractual provisions of the
are taken to 'Other operating income' instrument. This includes regular way
The “Day 1 loss” arising in the case of loans
LQWKH6WDWHPHQWRI3URȴWRU/RVV7KH WUDGHVSXUFKDVHVRUVDOHVRIȴQDQFLDO
granted to employees at concessionary
foreign currency gain or loss on monetary assets that require delivery of assets within
rates under uniformly applicable schemes
LWHPVLVWKHGL΍HUHQFHEHWZHHQDPRUWLVHG the time frame generally established by
LVGHIHUUHGDQGDPRUWLVHGXVLQJ(΍HFWLYH
cost in the functional currency at the regulation or convention in the market
Interest Rates (EIR) in “Interest income” and
beginning of the period, adjusted for place. Loans and advances to customers
“Personnel expenses” over the remaining
H΍HFWLYHLQWHUHVWDQGSD\PHQWVGXULQJWKH are recognised when funds are transferred
service period of the employees or tenure
period, and the amortised cost in foreign to the customers' accounts. The Group
of the loan whichever is shorter.
currency translated at the rate of exchange recognises balances due to depositors
prevailing at the end of the reporting when funds are transferred to the Group.
3.4.3. Measurement Categories of
period.
Financial Assets and Liabilities
3.4.2. Initial Measurement of Financial
Non-monetary items in a foreign currency Instruments 7KH*URXSFODVVLȴHVDOORILWVȴQDQFLDO
that are measured in terms of historical assets based on the business model
7KHFODVVLȴFDWLRQRIȴQDQFLDOLQVWUXPHQWV
cost are translated using the exchange for managing the assets and the asset's
at initial recognition depends on their
rates as at the dates of the initial contractual terms, measured at either:
contractual terms and the business model
transactions. Non- monetary items in for managing the instruments, as described Ì Amortised cost, as explained in Note
foreign currency measured at fair value are in Notes 3.4.3.1(a) and 3.4.3.1(b). Financial 3.4.3.1
translated using the exchange rates at the instruments are initially measured at their
date when the fair value was determined. Ì FVOCI as explained in Notes 3.4.3.5
fair value.
and 3.4.3.6
)RUHLJQH[FKDQJHGL΍HUHQFHVDULVLQJRQ ([FHSWLQWKHFDVHRIȴQDQFLDODVVHWV Ì FVPL
the settlement or reporting of monetary DQGȴQDQFLDOOLDELOLWLHVUHFRUGHGDW
LWHPVDWUDWHVGL΍HUHQWIURPWKRVHZKLFK 7KH*URXSFODVVLȴHVDQGPHDVXUHVLWV
FVPL, transaction costs are added
were initially recorded are dealt with in derivative and trading portfolio at FVPL
to, or subtracted from, this amount.
WKH6WDWHPHQWRI3URȴWRU/RVV+RZHYHU as explained in Notes 3.4.3.2 and 3.4.3.3.
Trade receivables are measured at the
IRUHLJQFXUUHQF\GL΍HUHQFHVDULVLQJRQ 7KH*URXSPD\GHVLJQDWHȴQDQFLDO
transaction price. When the fair value of
HTXLW\LQVWUXPHQWVFODVVLȴHGDVIDLUYDOXH instruments at FVPL, if so doing eliminates
ȴQDQFLDOLQVWUXPHQWVDWLQLWLDOUHFRJQLWLRQ
through other comprehensive income, RUVLJQLȴFDQWO\UHGXFHVPHDVXUHPHQWRU
GL΍HUVIURPWKHWUDQVDFWLRQSULFHWKH
ȴQDQFLDOOLDELOLWLHVGHVLJQDWHGDVDKHGJHRI recognition inconsistencies, as explained in
*URXSDFFRXQWVIRUWKH'D\SURȴWRUORVV
a net investment in a foreign operation, or Note 3.4.3.4
as described below.
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in other comprehensive income. Financial liabilities, other than loan
ȅ'D\ 3UR΋WRU/RVV
FRPPLWPHQWVDQGȴQDQFLDOJXDUDQWHHV
:KHQWKHWUDQVDFWLRQSULFHGL΍HUV are measured at amortised cost or at FVPL
Forward exchange contracts are valued
from the fair value of other observable when they are held for trading, derivative
at the forward market rates ruling on the
current market transactions in the same instruments or the fair value designation
reporting date. Resulting net unrealised
instrument, or based on a valuation is applied, as explained in Notes 3.4.3.2,
3.4.3.3, 3.4.3.4 and 3.4.3.7.

3.4.3.1. Loans and advances to The expected frequency, value and timing
3.4.3.2. Derivatives recorded at fair value
customers, debt and other of sales are also important aspects of the
WKURXJKSUR΋WRUORVV
instruments, reverse repurchase Group's assessment.
$GHULYDWLYHLVDȴQDQFLDOLQVWUXPHQWRU
agreements
The business model assessment is other contract with all three of the following
The Group only measures loans and characteristics:
based on reasonably expected scenarios
advances to customers, debt and other
without taking 'worst case' or 'stress Ì Its value changes in response to the
instruments and reverse repurchase
FDVH VFHQDULRVLQWRDFFRXQWΖIFDVKȵRZV FKDQJHLQDVSHFLȴHGLQWHUHVWUDWH
agreements at amortised cost if both of the
after initial recognition are realised in a ȴQDQFLDOLQVWUXPHQWSULFHFRPPRGLW\
following conditions are met:
ZD\WKDWLVGL΍HUHQWIURPWKH*URXS V price, foreign exchange rate, index of
Ì 7KHȴQDQFLDODVVHWLVKHOGZLWKLQD original expectations, the Group does not prices or rates, credit rating or credit
business model with the objective of FKDQJHWKHFODVVLȴFDWLRQRIWKHUHPDLQLQJ index or other variable, provided that,
FROOHFWLQJFRQWUDFWXDOFDVKȵRZV ȴQDQFLDODVVHWVKHOGLQWKDWEXVLQHVV LQWKHFDVHRIDQRQȴQDQFLDOYDULDEOH
model, but incorporates such information LWLVQRWVSHFLȴFWRDSDUW\WRWKH
Ì 7KHFRQWUDFWXDOWHUPVRIWKHȴQDQFLDO
when assessing newly originated or newly contract (i.e. the 'underlying').
DVVHWJLYHULVHRQVSHFLȴHGGDWHVWR
SXUFKDVHGȴQDQFLDODVVHWVJRLQJIRUZDUG
FDVKȵRZVWKDWDUHVROHO\SD\PHQWV Ì It requires no initial net investment or
of principal and interest (SPPI) on the an initial net investment that is
3.4.3.1(b). The SPPI test
principal amount outstanding. smaller than would be required for
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other types of contracts expected to
The details of these conditions are outlined process the Group assesses the contractual
have a similar response to changes in
below. WHUPVRIȴQDQFLDOLQVWUXPHQWVWRLGHQWLI\
market factors.
whether they meet the SPPI test. 'Principal'
3.4.3.1(a). Business model assessment IRUWKHSXUSRVHRIWKLVWHVWLVGHȴQHGDV Ì It is settled at a future date.
WKHIDLUYDOXHRIWKHȴQDQFLDODVVHWDWLQLWLDO
The Group determines its business
recognition and may change over the life of The Group enters into derivative
PRGHODWWKHOHYHOWKDWEHVWUHȵHFWVKRZ
WKHȴQDQFLDODVVHW IRUH[DPSOHLIWKHUHDUH transactions with various counterparties.
LWPDQDJHVJURXSVRIȴQDQFLDODVVHWVWR
repayments of principal or amortisation of These include interest rate swaps, cross-
achieve its business objective.
the premium/discount). currency swaps, forward exchange
contracts etc. Derivatives are recorded at
The Group's business model is not
7KHPRVWVLJQLȴFDQWHOHPHQWVRILQWHUHVW fair value and carried as assets when their
assessed on an instrument-by instrument
within a lending arrangement are typically fair value is positive and as liabilities when
basis, but at a higher level of aggregated
the consideration for the time value of their fair value is negative. The notional
portfolios and is based on observable
money and credit risk. To make the SPPI amount and fair value of such derivatives
factors such as:
assessment, the Group applies judgment are disclosed separately in Note 23.
and considers relevant factors such as Changes in the fair value of derivatives are
Ì How the performance of the
WKHFXUUHQF\LQZKLFKWKHȴQDQFLDODVVHWLV included in net gain/(loss) from trading
EXVLQHVVPRGHODQGWKHȴQDQFLDO
denominated and the period for which the unless hedge accounting is applied. The
assets held within that business
interest rate is set. In contrast, contractual Group has not applied hedge accounting
model are evaluated and reported to
terms that introduce a more than de for any of its derivatives during the years
the entity's key management
minimis exposure to risks or volatility in the ended 31st December 2022 and 2021.
personnel
FRQWUDFWXDOFDVKȵRZVWKDWDUHXQUHODWHG
Ì 7KHULVNVWKDWD΍HFWWKHSHUIRUPDQFH to a basic lending arrangement, do not give 3.4.3.2(a). Embedded derivatives
of the business model (and the ULVHWRFRQWUDFWXDOFDVKȵRZVWKDWDUHVROHO\ An embedded derivative is a component
ȴQDQFLDODVVHWVKHOGZLWKLQWKDW payments of principal and interest on the of a hybrid instrument that also includes
business model) and, in particular, amount outstanding. In such cases, the a non-derivative host contract with the
the way those risks are managed ȴQDQFLDODVVHWLVUHTXLUHGWREHPHDVXUHG H΍HFWWKDWVRPHRIWKHFDVKȵRZVRIWKH
Ì How managers of the business are at FVPL. combined instrument vary in a way, similar
compensated (for example, whether to a stand-alone derivative.
the compensation is based on the
fair value of the assets managed or
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collected)

An embedded derivative causes some or income is recorded in net trading income )LQDQFLDODVVHWVDQGȴQDQFLDOOLDELOLWLHVDW
DOORIWKHFDVKȵRZVWKDWRWKHUZLVHZRXOG when the right to payment has been FVPL are recorded in the statement of
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DFFRUGLQJWRDVSHFLȴHGLQWHUHVWUDWH are debt securities and equity investments LQIDLUYDOXHDUHUHFRUGHGLQSURȴWRUORVV
ȴQDQFLDOLQVWUXPHQWSULFHFRPPRGLW\SULFH that have been acquired principally for with the exception of movements in fair
foreign exchange rate, index of prices or the purpose of selling or repurchasing in value of liabilities designated at FVPL due
rates, credit rating or credit index, or other the near term. The Group does not have to changes in the Group's own credit risk.
variable, provided that, in the case of a DQ\ȴQDQFLDOOLDELOLWLHVFODVVLȴHGDVKHOGIRU Such changes in fair value are recorded in
QRQȴQDQFLDOYDULDEOHLWLVQRWVSHFLȴFWR trading as at 31st December 2022. the "Own credit reserve" through OCI and
a party to the contract. A derivative that is GRQRWJHWUHF\FOHGWRWKHSURȴWRUORVV
DWWDFKHGWRDȴQDQFLDOLQVWUXPHQWEXWLV )LQDQFLDODVVHWVDQG΋QDQFLDO Interest earned or incurred on instruments
contractually transferable independently liabilities designated at fair value designated at FVPL is accrued in interest
RIWKDWLQVWUXPHQWRUKDVDGL΍HUHQW WKURXJKSUR΋WRUORVV income or interest expense, respectively,
counterparty from that instrument, is not )LQDQFLDODVVHWVDQGȴQDQFLDOOLDELOLWLHVLQ using the EIR, taking into account any
an embedded derivative, but a separate this category are those that are not held for discount/premium and qualifying
ȴQDQFLDOLQVWUXPHQW trading and have been either designated transaction costs being integral parts of the
by management upon initial recognition or instrument.
Derivatives embedded in liabilities and are mandatorily required to be measured
QRQȴQDQFLDOKRVWFRQWUDFWVDUHWUHDWHG at fair value under SLFRS 9. Management 3.4.3.5. Debt instruments at FVOCI
as separate derivatives and recorded only designates an instrument at FVPL The Group applies this category for debt
DWIDLUYDOXHLIWKH\PHHWWKHGHȴQLWLRQ upon initial recognition when one of the instruments when both of the following
RIDGHULYDWLYH DVGHȴQHGDERYH WKHLU following criteria are met. Such designation conditions are met:
economic characteristics and risks are is determined on an instrument-by-
not closely related to those of the host instrument basis: Ì The instrument is held within a
contract, and the host contract is not itself business model, the objective of
held for trading or designated at FVPL. Ì The designation eliminates, or which is achieved by both collecting
The embedded derivatives separated VLJQLȴFDQWO\UHGXFHVWKHLQFRQVLVWHQW FRQWUDFWXDOFDVKȵRZVDQGVHOOLQJ
from the host were carried at fair value in treatment that would otherwise arise ȴQDQFLDODVVHWV
the trading portfolio with changes in fair from measuring the assets or
value recognised in the income statement.
Ì 7KHFRQWUDFWXDOWHUPVRIWKHȴQDQFLDO
liabilities or recognising gains or
'HULYDWLYHVHPEHGGHGLQȴQDQFLDODVVHWV
asset meet the SPPI test
ORVVHVRQWKHPRQDGL΍HUHQWEDVLV
are no longer separated. Instead, they are These instruments largely comprise
Or
FODVVLȴHGEDVHGRQWKHEXVLQHVVPRGHO government securities.
and SPPI assessments as outlined in Notes Ì The liabilities are part of a group of
3.4.3.1(a) and 3.4.3.1(b). ȴQDQFLDOOLDELOLWLHVZKLFKDUHPDQDJHG FVOCI debt instruments are subsequently
and their performance evaluated on measured at fair value with gains and
)LQDQFLDODVVHWVRU΋QDQFLDO a fair value basis, in accordance with losses arising due to changes in fair value
liabilities held for trading a documented risk management or recognised in OCI. Interest income and
7KH*URXSFODVVLȴHVȴQDQFLDODVVHWVRU investment strategy foreign exchange gains and losses are
ȴQDQFLDOOLDELOLWLHVDVKHOGIRUWUDGLQJ UHFRJQLVHGLQSURȴWRUORVVLQWKHVDPH
Or
when they have been purchased or issued PDQQHUDVIRUȴQDQFLDODVVHWVPHDVXUHGDW
SULPDULO\IRUVKRUWWHUPSURȴWPDNLQJ Ì The liabilities containing one or more amortised cost.
through trading activities or form part of embedded derivatives, unless they
DSRUWIROLRRIȴQDQFLDOLQVWUXPHQWVWKDW GRQRWVLJQLȴFDQWO\PRGLI\WKHFDVK The ECL calculation for debt instruments
are managed together, for which there is ȵRZVWKDWZRXOGRWKHUZLVHEH at FVOCI is explained in Note 3.4.6.5.
evidence of a recent pattern of short-term required by the contract, or it is clear On derecognition, cumulative gains or
SURȴWWDNLQJ+HOGIRUWUDGLQJDVVHWVDQG with little or no analysis when a losses previously recognised in OCI are
liabilities are recorded and measured in VLPLODULQVWUXPHQWLVȴUVWFRQVLGHUHG UHFODVVLȴHGIURP2&ΖWRSURȴWRUORVV
WKHVWDWHPHQWRIȴQDQFLDOSRVLWLRQDWIDLU that separation of the embedded
value. Changes in fair value are recognised derivative(s) is prohibited 3.4.3.6. Equity instruments at FVOCI
in net trading income. Interest income from Upon initial recognition, the Group
ȴQDQFLDODVVHWVKHOGIRUWUDGLQJLVUHFRUGHG occasionally elects to classify irrevocably
under net interest income while dividend some of its equity investments at FVOCI
ZKHQWKH\PHHWWKHGHȴQLWLRQRIHTXLW\

under Sri Lanka Accounting Standard Undrawn loan commitments and letters of LVPHDVXUHGDWWKHUHFODVVLȴFDWLRQGDWH
- LKAS 32 (Financial Instruments: credits are commitments under which, over $Q\JDLQRUORVVDULVLQJIURPWKHGL΍HUHQFH
Presentation) and are not held for trading. the duration of the commitment, the Group between the previous amortised cost of the
6XFKFODVVLȴFDWLRQLVGHWHUPLQHGRQDQ is required to provide a loan with pre- ȴQDQFLDODVVHWDQGIDLUYDOXHLVUHFRJQLVHG
instrument-by instrument basis. VSHFLȴHGWHUPVWRWKHFXVWRPHU6LPLODU LQSURȴWRUORVV
WRȴQDQFLDOJXDUDQWHHFRQWUDFWVWKHVH
Gains and losses on these equity contracts are within the scope of the ECL :KHQDȴQDQFLDODVVHWLVUHFODVVLȴHGRXW
LQVWUXPHQWVDUHQHYHUUHF\FOHGWRSURȴW requirements. RIWKHIDLUYDOXHWKURXJKSURȴWRUORVV
'LYLGHQGVDUHUHFRJQLVHGLQSURȴWRUORVV measurement category and into the
under other operating income when the 7KHQRPLQDOFRQWUDFWXDOYDOXHRIȴQDQFLDO amortised cost measurement category,
right of the payment has been established, guarantees, letters of credit and undrawn LWVIDLUYDOXHDWWKHUHFODVVLȴFDWLRQGDWH
H[FHSWZKHQWKH*URXSEHQHȴWVIURPVXFK loan commitments, where the loan agreed becomes its new gross carrying amount.
proceeds as a recovery of part of the cost to be provided is on market terms, are
of the instrument, in which case, such gains QRWUHFRUGHGLQWKHVWDWHPHQWRIȴQDQFLDO
:KHQDȴQDQFLDODVVHWLVUHFODVVLȴHGRXWRI
are recorded in OCI. Equity instruments the amortised cost measurement category
position. The nominal values of these
at FVOCI are not subject to an impairment and into the fair value through other
instruments are disclosed in Note 45, while
assessment. comprehensive income measurement
the corresponding ECL is disclosed under
category, its fair value is measured at
Note 40, "Other liabilities".
3.4.3.7. Securities sold under repurchase WKHUHFODVVLȴFDWLRQGDWH$Q\JDLQRUORVV
agreements, due to banks, due to DULVLQJIURPWKHGL΍HUHQFHEHWZHHQWKH
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depositors, other borrowers and SUHYLRXVDPRUWLVHGFRVWRIWKHȴQDQFLDO
Assets and Liabilities
debt securities holders asset and fair value is recognised in other
The Group does not reclassify its FRPSUHKHQVLYHLQFRPH7KHH΍HFWLYH
After initial measurement, securities sold
ȴQDQFLDODVVHWVVXEVHTXHQWWRWKHLULQLWLDO interest rate and the measurement of
under repurchase agreements, due to
recognition, apart from the exceptional expected credit losses are not adjusted as
banks, due to depositors, due to other
circumstances in which the Group DUHVXOWRIWKHUHFODVVLȴFDWLRQ
borrowers and due to debt securities
may acquire, dispose of, or terminates
holders are subsequently measured
a business line (change in business :KHQDȴQDQFLDODVVHWLVUHFODVVLȴHGRXWRI
at amortised cost. Amortised cost is
model). However, considering the recent the fair value through other comprehensive
calculated by taking into account any
discount or premium on issue of funds unprecedented changes in the macro- income measurement category and into
and costs that are an integral part of the economic conditions, the Institute of the amortised cost measurement category,
EIR. The Group does not have compound Chartered Accountants of Sri Lanka (CA Sri WKHȴQDQFLDODVVHWLVUHFODVVLȴHGDWLWVIDLU
ȴQDQFLDOLQVWUXPHQWVZKLFKFRQWDLQVERWK Lanka) issued a “Statement of Alternative YDOXHDWWKHUHFODVVLȴFDWLRQGDWH+RZHYHU
liability and equity components and require 7UHDWPHQW 6R$7 RQ5HFODVVLȴFDWLRQRI the cumulative gain or loss previously
separation as at the date of the issue. 'HEWSRUWIROLRȋZKLFKSURYLGHGDRQHR΍ recognised in other comprehensive income
option for the entities to reclassify the debt is removed from equity and adjusted
3.4.3.8. Financial guarantees, letters portfolio measured at Fair Value through DJDLQVWWKHIDLUYDOXHRIWKHȴQDQFLDODVVHW
of credit and undrawn loan Other Comprehensive Income (FVOCI) to DWWKHUHFODVVLȴFDWLRQGDWH$VDUHVXOW
commitments Amortised Cost. Although there were no WKHȴQDQFLDODVVHWLVPHDVXUHGDWWKH
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6R$7WKH*URXSUHFODVVLȴHGLWVWUHDVXU\ PHDVXUHGDWDPRUWLVHGFRVW7KHH΍HFWLYH
letters of credit and loan commitments.
bond portfolio as at 1st April 2022 from interest rate and the measurement of
Financial guarantees are initially recognised
FVOCI to Amortised Cost. expected credit losses are not adjusted as
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being the premium received. Subsequent
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to initial recognition, the Group's liability
amortised cost during the year are given in
under each guarantee is measured at the DVVHWVLWDSSOLHVWKHUHFODVVLȴFDWLRQ
Note 27.8.
higher of the amount initially recognised SURVSHFWLYHO\IURPWKHUHFODVVLȴFDWLRQGDWH
less cumulative amortisation recognised without restating any previously recognised
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in the income statement and the ECL gains, losses or interest. Financial liabilities
RIWKHIDLUYDOXHWKURXJKSURȴWRUORVV
provision. DUHQHYHUUHFODVVLȴHG
measurement category and into the fair
value through other comprehensive income
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PHDVXUHPHQWFDWHJRU\WKHȴQDQFLDODVVHW
the income statement under net fees and the amortised cost measurement category
continues to be measured at fair value.
commission income on a straight line basis DQGLQWRWKHIDLUYDOXHWKURXJKSURȴWRU
over the life of the guarantee. loss measurement category, its fair value

:KHQDȴQDQFLDODVVHWLVUHFODVVLȴHGRXWRI 3.4.5.2. Derecognition other than for including interest earned, during the
the fair value through other comprehensive VXEVWDQWLDOPRGL΋FDWLRQ period between the collection date and
income measurement category and the date of required remittance to the
3.4.5.2(a). Financial assets
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PHDVXUHPHQWFDWHJRU\WKHȴQDQFLDODVVHW $ȴQDQFLDODVVHW RUZKHUHDSSOLFDEOHD
SDUWRIDȴQDQFLDODVVHWRUSDUWRIDJURXS $WUDQVIHURQO\TXDOLȴHVIRUGHUHFRJQLWLRQ
continues to be measured at fair value.
RIVLPLODUȴQDQFLDODVVHWV LVGHUHFRJQLVHG if either:
The cumulative gain or loss previously
recognised in other comprehensive income ZKHQWKHULJKWVWRUHFHLYHFDVKȵRZVIURP
WKHȴQDQFLDODVVHWKDYHH[SLUHG7KH*URXS Ì The Group has transferred substantially
LVUHFODVVLȴHGIURPHTXLW\WRSURȴWRUORVV
DOVRGHUHFRJQLVHVWKHȴQDQFLDODVVHWLILW all the risks and rewards of the asset
DVDUHFODVVLȴFDWLRQDGMXVWPHQWDWWKH
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3.4.5 Derecognition of Financial Assets retained substantially all the risks and
and Liabilities 7KH*URXSKDVWUDQVIHUUHGWKHȴQDQFLDO rewards of the asset, but has
asset if, and only if, either: transferred control of the asset
3.4.5.1 Derecognition due to substantial
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conditions
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7KH*URXSGHUHFRJQLVHVDȴQDQFLDO IURPWKHȴQDQFLDODVVHW the practical ability to sell the asset in its
asset, such as a loan to a customer, Or entirety to an unrelated third party and is
when the terms and conditions have
Ì ΖWUHWDLQVWKHULJKWVWRWKHFDVKȵRZV able to exercise that ability unilaterally and
been renegotiated to the extent that,
but has assumed an obligation to pay without imposing additional restrictions on
substantially, it becomes a new loan,
WKHUHFHLYHGFDVKȵRZVLQIXOOZLWKRXW the transfer.
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material delay to a third party under a
derecognition gain or loss, to the extent When the Group has neither transferred
'pass-through' arrangement
that an impairment loss has not already nor retained substantially all the risks and
been recorded. The newly recognised Pass-through arrangements are rewards and has retained control of the
ORDQVDUHFODVVLȴHGDVVWDJHIRU(&/ transactions whereby the Group retains the asset, the asset continues to be recognised
measurement purposes, unless the new FRQWUDFWXDOULJKWVWRUHFHLYHWKHFDVKȵRZV only to the extent of the Group's continuing
loan is deemed to be credit impaired at the RIDȴQDQFLDODVVHW WKH RULJLQDODVVHW EXW involvement, in which case, the Group
date of inception. assumes a contractual obligation to pay also recognises an associated liability.
WKRVHFDVKȵRZVWRRQHRUPRUHHQWLWLHV The transferred asset and the associated
When assessing whether or not to (the 'eventual recipients'), when all of the liability are measured on a basis that
derecognise a loan to a customer, amongst following three conditions are met: UHȵHFWVWKHULJKWVDQGREOLJDWLRQVWKDWWKH
others, the Group considers the following
Group has retained.
factors: Ì The Group has no obligation to pay
amounts to the eventual recipients Continuing involvement that takes the form
Ì Change in currency of the loan unless it has collected equivalent of a guarantee over the transferred asset
amounts from the original asset, is measured at the lower of the original
Ì Introduction of an equity feature
excluding short term advances with the carrying amount of the asset and the
Ì Change in counterparty right to full recovery of the amount lent maximum amount of consideration the
plus accrued interest at market rates Group could be required to pay.
Ì ΖIWKHPRGLȴFDWLRQLVVXFKWKDWWKH
instrument would no longer meet the Ì The Group cannot sell or pledge the
SPPI criterion original asset other than as security to 3.4.5.2(b). Financial liabilities
the eventual recipients $ȴQDQFLDOOLDELOLW\LVGHUHFRJQLVHGZKHQWKH
ΖIWKHPRGLȴFDWLRQGRHVQRWUHVXOWLQ obligation under the liability is discharged,
Ì 7KH*URXSKDVWRUHPLWDQ\FDVKȵRZV
FDVKȵRZVWKDWDUHVXEVWDQWLDOO\GL΍HUHQW cancelled or expired. Where an existing
it collects on behalf of the eventual
WKHPRGLȴFDWLRQGRHVQRWUHVXOWLQ ȴQDQFLDOOLDELOLW\LVUHSODFHGE\DQRWKHU
recipients without material delay. In
derecognition. Based on the change in cash from the same lender on substantially
addition, the Group is not entitled to
ȵRZVGLVFRXQWHGDWWKHRULJLQDO(Ζ5WKH GL΍HUHQWWHUPVRUWKHWHUPVRIDQH[LVWLQJ
UHLQYHVWVXFKFDVKȵRZVH[FHSWIRU
*URXSUHFRUGVDPRGLȴFDWLRQJDLQRUORVV OLDELOLW\DUHVXEVWDQWLDOO\PRGLȴHGVXFKDQ
investments in cash or cash equivalents
to the extent that an impairment loss has H[FKDQJHRUPRGLȴFDWLRQLVWUHDWHGDVD
not already been recorded.

derecognition of the original liability and the The Group has established a policy to This is considered a (partial) derecognition
UHFRJQLWLRQRIDQHZOLDELOLW\7KHGL΍HUHQFH perform an assessment, at the end of each RIWKHȴQDQFLDODVVHW
between the carrying value of the original UHSRUWLQJSHULRGRIZKHWKHUDȴQDQFLDO
ȴQDQFLDOOLDELOLW\DQGWKHFRQVLGHUDWLRQSDLG instrument's credit risk has increased D 'H΋QLWLRQRIGHIDXOWDQGFXUH
LVUHFRJQLVHGLQSURȴWRUORVV VLJQLȴFDQWO\VLQFHLQLWLDOUHFRJQLWLRQE\ 7KH*URXSFRQVLGHUVDȴQDQFLDOLQVWUXPHQW
considering the change in the risk of as defaulted and therefore stage 3 (credit-
3.4.6. Impairment Allowance for default occurring over the remaining life impaired) for ECL calculations in all cases
Financial Assets RIWKHȴQDQFLDOLQVWUXPHQW7KLVLVIXUWKHU when the borrower becomes 90 days past
3.4.6.1. Overview of the ECL principles explained in Note 3.4.6.1(b). Based on the due on its contractual payments.
above process, the Group categorises its
The Group calculates impairment
loans into 'stage 1', 'stage 2', 'stage 3' and As a part of a qualitative assessment of
DOORZDQFHVRQȴQDQFLDODVVHWVLQOLQHZLWK
'originated credit impaired', as described ZKHWKHUDQLQGLYLGXDOO\VLJQLȴFDQWFXVWRPHU
Sri Lanka Accounting Standard - SLFRS
below: is in default, the Group also considers
9 (Financial Instruments) and as per the
CBSL Directive No. 13 of 2021 & No. 14 a variety of instances that may indicate
RIRQ&ODVVLȴFDWLRQ5HFRJQLWLRQ
Ì 6WDJH:KHQORDQVDUHȴUVW unlikeliness to pay. When such events
recognised, the Group recognises an occur, the Group carefully considers
and Measurement of Credit Facilities/
impairment based on 12mECLs. Stage 1 whether the event should result in treating
Other Financial Assets in Licensed
loans also include facilities where the the customer as defaulted and therefore
Banks. Accordingly, the Group has been
credit risk has improved and the loan assessed as stage 3 for ECL calculations or
recording impairment (expected credit
ORVVHV IRUDOOORDQVGHEW RWKHUȴQDQFLDO
KDVEHHQUHFODVVLȴHGIURPVWDJHDQG whether stage 2 is appropriate.
stage 3.
instruments not held at FVPL, together with
Such events include:
ORDQFRPPLWPHQWVȴQDQFLDOJXDUDQWHH Ì Stage 2: When a loan has shown a
contracts, letter of credit and acceptances. VLJQLȴFDQWLQFUHDVHLQFUHGLWULVNVLQFH
Ì Customer's Internal Risk Rating (CIRR) is
Equity instruments are not subject to origination, the Group records an
below C + or any down grading of the
impairment under SLFRS 9. impairment for the LTECLs. Stage 2
CIRR by two notches or more from the
loans also include facilities, where the
previous year
Impairment is based on the credit losses credit risk has improved and the loan
expected to arise over the life of the KDVEHHQUHFODVVLȴHGIURPVWDJH Ì Reasonable and supportable forecasts
asset [the lifetime expected credit loss of future economic conditions show a
Ì Stage 3: Loans considered credit-
RU /7(&/ @ZKHQWKHUHLVDVLJQLȴFDQW direct negative impact on the
impaired [as outlined in Note
increase in credit risk since origination. performance of a customer/group of
3.4.6.1(a)]. The Group records an
In all other instances, the impairment is customers
impairment for the LTECLs.
based on the 12 months' expected credit
Ì $VLJQLȴFDQWFKDQJHLQWKHJHRJUDSKLFDO
loss (12mECL). The Group's policies for Ì Originated credit impaired: Originated
locations or natural catastrophes that
GHWHUPLQLQJLIWKHUHKDVEHHQDVLJQLȴFDQW FUHGLWLPSDLUHGDVVHWVDUHȴQDQFLDO
directly impact the performance of a
increase in credit risk are set out in Note assets that are credit impaired on initial
customer/group of customers
3.4.6.1(b). recognition. They are recorded at fair
value at initial recognition and interest Ì 7KHYDOXHRIFROODWHUDOLVVLJQLȴFDQWO\
The 12mECL is the portion of LTECL that income is subsequently recognised reduced and/or realisability of collateral
represent the ECLs that result from default based on a credit-adjusted EIR. ECLs is doubtful
HYHQWVRQDȴQDQFLDOLQVWUXPHQWWKDWDUH are only recognised or released to the
Ì The borrower is subject to litigation that
possible within the 12 months after the extent that there is a subsequent
VLJQLȴFDQWO\D΍HFWVWKHSHUIRUPDQFHRI
reporting date. change in the expected credit losses.
the credit facility
The Group did not have originated
Both LTECLs and 12mECLs are calculated credit impaired loans as at 31st Ì Frequent changes in the board of
on either an individual basis or a December 2022 and 2021. directors and senior management of an
collective basis, depending on the nature institutional customer
RIWKHXQGHUO\LQJSRUWIROLRRIȴQDQFLDO )RUȴQDQFLDODVVHWVIRUZKLFKWKH*URXSKDV
Ì Delay in commencement of business
instruments. The policy for grouping no reasonable expectations of recovering
operations/projects by more than two
ȴQDQFLDODVVHWVPHDVXUHGRQDFROOHFWLYH either the entire outstanding amount, or
years from the originally agreed date
basis is explained in Note 3.4.6.4. The a proportion thereof, the gross carrying
details of individual assessment of ECLs are DPRXQWRIWKHȴQDQFLDODVVHWLVUHGXFHG
given in Note 3.4.6.3.

Ì 0RGLȴFDWLRQRIWHUPVUHVXOWLQJLQ The Group also applies secondary best case and the worst case), discounted
concessions, including extensions, qualitative methods for triggering a at an approximation to the EIR. Each of
deferment of payments, waiver of VLJQLȴFDQWLQFUHDVHLQFUHGLWULVNVXFKDV WKHVHLVDVVRFLDWHGZLWKGL΍HUHQWORVVUDWHV
covenants etc. restructuring of an asset while the asset The assessment of multiple scenarios
is less than 30 days past due. Further, incorporates how defaulted loans are
Ì The borrower is deceased/insolvent
rescheduled loans will remain in stage expected to be recovered, including the
Ì %DQNLVXQDEOHWRFRQWDFWRUȴQGWKH 2 for at least one year from the date of probability that the loans will cure and the
borrower reschedulement even if such loans become value of collateral or the amount that might
less than 30 days past due. In certain cases, be received from selling the asset.
Ì $IDOORIRUPRUHLQWKHWXUQRYHU
the Group may also consider that events
DQGRUSURȴWEHIRUHWD[RIWKHERUURZHU
H[SODLQHGLQ1RWH D DUHVLJQLȴFDQW Key elements of the ECL calculations are
when compared to the previous year,
increase in credit risk as opposed to a outlined below:
for two consecutive years
default, particularly for customers who are
Ì Erosion of net-worth of the borrower by FRQVLGHUHGDVLQGLYLGXDOO\VLJQLȴFDQWDQG Ì PD - The Probability of Default is an
PRUHWKDQ RWKHUWKDQGXHWR LQYHVWPHQWLQRWKHUȴQDQFLDODVVHWV estimate of the likelihood of default
changes in equity structure and over a given time horizon. A default may
dividend policy) when compared to the The Group is focused on supporting only happen at a certain time over the
SUHYLRXVȴQDQFLDO\HDU customers who are experiencing assessed period, if the facility has not
ȴQDQFLDOGLɝFXOWLHVEHFDXVHRIWKH been previously derecognised and is
It is the Group's policy to consider a COVID-19 pandemic and the subsequent still in the portfolio. The concept of PD
ȴQDQFLDOLQVWUXPHQWDV FXUHG DQG unprecedented macro-economic is further explained in Note 3.4.6.4(a).
WKHUHIRUHUHFODVVLȴHGRXWRIVWDJHZKHQ FRQGLWLRQVR΍HULQJDUDQJHRILQGXVWU\
Ì EAD - The Exposure at Default is an
none of the material default criteria have ZLGHȴQDQFLDODVVLVWDQFHPHDVXUHV
estimate of the exposure at a future
been presented. including the debt moratorium initiated
default date, taking into account
by the Central Bank of Sri Lanka. All
expected changes in the exposure after
Once cured, the decision whether to LQGLYLGXDOO\VLJQLȴFDQWFXVWRPHUVZKRZHUH
the reporting date, including
classify an asset as stage 2 or stage 1 under moratorium for a prolonged period
repayments of principal and interest,
largely depends on the days past due, at RIWLPHKDYHEHHQFODVVLȴHGDWOHDVWXQGHU
whether scheduled by contract or
the time of the cure. The corresponding stage 2 on a prudent basis when calculating
otherwise, expected drawdowns on
reduction in ECL is recognised under the impairment provisions. Furthermore, a
committed facilities, and accrued
"Impairment charge/reversal" in Note 12 to case-by-case analysis has been conducted
interest from missed payments. The
WKHȴQDQFLDOVWDWHPHQWV RQWKHPRVWVLJQLȴFDQWH[SRVXUHVDQG
EAD is further explained in Note
KDYHEHHQFODVVLȴHGDVVWDJHZKHQWKH
3.4.6.4(b).
The Group's criterion for 'cure' for circumstances demand so. The exposures
rescheduled/restructured loans is more ZKLFKDUHQRWLQGLYLGXDOO\VLJQLȴFDQWKDYH Ì LGD - The Loss Given Default is an
stringent than ordinary loans and is been moved to stage 2 based on the estimate of the loss arising in the case
explained in Note 3.4.6.11. industry risk of the underlying borrowers. where a default occurs at a given time.
7KH*URXSKDVLGHQWLȴHGLQGXVWULHVVXFK ΖWLVEDVHGRQWKHGL΍HUHQFHEHWZHHQ
E 6LJQL΋FDQWLQFUHDVHLQ as tourism, vehicle imports, construction WKHFRQWUDFWXDOFDVKȵRZVGXHDQG
credit risk (including condominiums), transport those that the lender would expect to
The Group continuously monitors all assets and storing etc. as industries carrying receive, including the realisation of any
subject to ECLs. In order to determine an increased credit risk. Accordingly, collateral. It is usually expressed as a
whether an instrument or a portfolio exposures outstanding from the borrowers percentage of the EAD. The LGD is
of instruments is subject to 12mECL operating in these industries have been further explained in Note 3.4.6.4(c).
or LTECL, the Group assesses whether FODVVLȴHGDVVWDJH$QDQDO\VLVRIWKH
WKHUHKDVEHHQDVLJQLȴFDQWLQFUHDVHLQ ORDQVFODVVLȴHGXQGHUVWDJHLVJLYHQLQ With the exception of credit cards and
credit risk since initial recognition. The Note 51.2.1(e) other revolving facilities, for which the
Group considers an exposure to have a treatment is separately set out in Note
VLJQLȴFDQWO\LQFUHDVHGFUHGLWULVNZKHQLWLV 3.4.6.2. The calculation of ECL 3.4.6.6, the maximum period for which
past due for more than 30 days. the credit losses are determined is the
The Group calculates ECL based on three
FRQWUDFWXDOOLIHRIDȴQDQFLDOLQVWUXPHQW
probability-weighted scenarios to measure
unless the Group has the legal right to call
the expected cash shortfall (the base case,
it earlier.

3.4.6.3. Calculation of ECLs for Ì The amount and timing of expected characteristics of the loans, as described
LQGLYLGXDOO\VLJQL΋FDQWORDQV receipts and recoveries; below:
7KH*URXSȴUVWDVVHVVHV(&/VLQGLYLGXDOO\ Ì The extent of other creditors'

Ì Product type
IRUȴQDQFLDODVVHWVWKDWDUHLQGLYLGXDOO\ commitments ranking ahead of, or
VLJQLȴFDQWWRWKH*URXSΖQWKHHYHQW pari- passu with the Bank and the Ì Type of collateral
the Group determines that such assets likelihood of other creditors continuing
Ì Industry of the borrower
are not impaired, moves in to a group to support the company;
RIȴQDQFLDODVVHWVZLWKVLPLODUFUHGLWULVN Ì Whether the loan is restructured/
Ì The complexity of determining the
characteristics and collectively assesses rescheduled
aggregate amount and ranking of all
them for impairment. However, assets that
creditor claims and the extent to which
are individually assessed for impairment 3.4.6.4(a). The internal rating and PD
legal and insurance uncertainties are
and for which an impairment loss is estimation process
or continues to be recognised are not evident;
The Bank and its' subsidiary, Siyapatha
included in a collective assessment of Ì The realisable value of security (or other Finance PLC have their own internal rating
impairment. The criteria used to determine credit mitigants) and likelihood of models. These models incorporate both
ZKHWKHULQGLYLGXDOO\VLJQLȴFDQWFXVWRPHULV successful repossession; qualitative and quantitative information
in default is discussed in Note 3.4.6.1(a).
DQGLQDGGLWLRQWRLQIRUPDWLRQVSHFLȴFWR
Ì The likely deduction of any costs
the borrower, utilise supplemental external
If the asset is impaired, the amount of involved in recovery of amounts
LQIRUPDWLRQWKDWFRXOGD΍HFWWKHERUURZHU V
the loss is measured by discounting the outstanding;
behaviour. Although these PDs are used for
H[SHFWHGIXWXUHFDVKȵRZVRIDȴQDQFLDO The ability of the borrower to obtain
Ì regulatory purposes, the same is not used
DVVHWDWLWVRULJLQDOH΍HFWLYHLQWHUHVWUDWH
and make payments in the currency of for PD estimation under SLFRS 9.
and comparing the resultant present value
the loan if not denominated in local
ZLWKWKHȴQDQFLDODVVHW VFXUUHQWFDUU\LQJ
currency; and PD estimation for loans and advances
amount. In determining the expected future
under SLFRS 9 is largely based on the Days
FDVKȵRZVWKH*URXSWDNHVLQWRDFFRXQW Ì The likely dividend available on
Past Due (DPD) of the customers which is
the base case, the best case and the liquidation or bankruptcy
common for most banks in the country at
worst case scenarios considering various
present.
modes of settlement of the impaired *URXSLQJ΋QDQFLDODVVHWV
credit facilities. Impairment on individually measured on a collective basis
Accordingly, exposures are categorised
VLJQLȴFDQWDFFRXQWVDUHUHYLHZHGPRUH The Group calculates ECLs either on a
regularly when circumstances require. This among 5 groups based on the DPD as
collective or an individual basis. Asset
normally encompasses re-assessment of follows.
classes where the Group calculates ECL on
the enforceability of any collateral held an individual basis include:
and the timing and amount of actual and Ì Zero days past due
anticipated receipts. Individually assessed Ì All customers whose exposure is more Ì 1 - 30 days past due
impairment is only released when there than or equal to the internal threshold
is reasonable and objective evidence of a Ì 31 - 60 days past due
for classifying them as individually
reduction in the established loss estimate. Ì 61 - 90 days past due
VLJQLȴFDQW+RZHYHULIWKHFXVWRPHULV
Interest on impaired assets continues to be
determined to be not impaired such Ì Above 90 days past due
recognised through the unwinding of the
customers are moved back to collective
discount.
ECL calculation. The movement of the customers into
When ECLs are determined for individually Ì The treasury, trading and interbank adverse DPD categories are tracked at each
VLJQLȴFDQWȴQDQFLDODVVHWVIROORZLQJIDFWRUV relationships (such as due from banks, account level over the periods and it is
are considered: debt and other instruments at used to estimate the amount of loans that
amortised cost/FVOCI) ZLOOHYHQWXDOO\EHZULWWHQR΍
Ì Aggregate exposure to the customer
including any undrawn exposures; For all other asset classes, the Group However, for loans granted to banks, debt
calculates ECL on a collective basis. The RWKHUȴQDQFLDOLQVWUXPHQWVFODVVLȴHGDV
Ì The viability of the customer's business
Group categorises these exposures into amortised cost/FVOCI, the Group relies on
model and their capacity to trade
smaller homogeneous portfolios, based external credit ratings in determining their
VXFFHVVIXOO\RXWRIȴQDQFLDOGLɝFXOWLHV
on a combination of internal and external respective PDs.
DQGJHQHUDWHVXɝFLHQWFDVKȵRZVWR
service debt obligations;

3.4.6.4(b). Exposure at default characteristics (e.g. product type, collateral In its ECL models, the Group relies on a
type) as well as borrower characteristics. broad range of forward-looking information
The exposure at default (EAD) represents
Further, recent data and forward-looking as economic inputs. The inputs and
WKHJURVVFDUU\LQJDPRXQWRIWKHȴQDQFLDO
economic scenarios are used in order models used for calculating ECLs may
instruments subject to the impairment
to determine the LGD for each collateral not always capture all characteristics of
calculation, addressing both the client's
type. The LGD rates, where possible, are WKHPDUNHWDVDWWKHGDWHRIWKHȴQDQFLDO
ability to increase its exposure while
calibrated through back testing against VWDWHPHQWV7RUHȵHFWWKLVTXDOLWDWLYH
approaching default and potential early
recent recoveries. adjustments or overlays are occasionally
repayments too.
made as temporary adjustments when such
)RUȴQDQFLDOLQYHVWPHQWVRWKHUWKDQORDQV GL΍HUHQFHVDUHVLJQLȴFDQWO\PDWHULDO
To calculate the EAD for a stage 1 loan,
and advances, the Group uses the LGD
the Group assesses the possible default
UDWHVVSHFLȴHGE\WKHUHJXODWRULQWKH%DVHO In 2022, the Group changed the values of
events within 12 months. However, if a
III guidelines when calculating the ECL as the key macro-economic variables in the
stage 1 loan that is expected to default
per SLFRS 9. impairment calculation model including
within the 12 months from the balance
the GDP growth rate, unemployment rate,
sheet date is also expected to cure and
3.4.6.5. Debt instruments measured at interest rate, exchange rate etc. These
subsequently default again, then all linked
FVOCI values have been determined based on the
default events are considered. For stage
The ECLs for debt instruments measured at most recent forecasts available as at the
DQGVWDJHȴQDQFLDODVVHWVDQGFUHGLW
FVOCI do not reduce the carrying amount date of the calculation.
LPSDLUHGȴQDQFLDODVVHWVDWRULJLQDWLRQ
events over the lifetime of the instruments RIWKHVHȴQDQFLDODVVHWVLQWKHVWDWHPHQW
RIȴQDQFLDOSRVLWLRQZKLFKUHPDLQVDW 7RUHȵHFWWKHHFRQRPLFXQFHUWDLQWLHVLQ
are considered. The Group determines
fair value. Instead, an amount equal to the calculation of expected credit losses,
EADs by modelling the range of possible
the impairment that would arise if the the Group also revisited the weightages
exposure outcomes at various points in
assets were measured at amortised cost assigned for multiple economic scenarios
time, corresponding the multiple scenarios.
is recognised in OCI as an accumulated during the year. Weightages assigned for
The SLFRS 9 PDs are then assigned to each
impairment amount, with a corresponding each scenario is given below along with the
economic scenario based on the outcome
FKDUJHWRSURȴWRUORVV7KHDFFXPXODWHG weightages used in 2021.
of Group's models.
loss recognised in OCI is recycled to the
2022 2021
3.4.6.4(c). Loss given default SURȴWDQGORVVXSRQGHUHFRJQLWLRQRIWKH
assets. Base Case
LGD values are assessed at least annually
Best Case
for each material collateral type. The Group
3.4.6.6. Credit cards and other revolving Worst Case
segregates its customer loan book based
facilities
on following major types of collaterals when
7KH%DQN VSURGXFWR΍HULQJLQFOXGHVFUHGLW To ensure completeness and accuracy, the
calculating the LGD.
card facilities and other revolving products, Group obtains the above data primarily
in which the Bank has the right to cancel from the Central Bank of Sri Lanka (CBSL).
Ì Secured against cash/deposits held
and/or reduce the facilities with a very short Other third party sources such as World
within the bank
notice. The Bank does not limit its exposure Bank and International Monetary Fund
Ì Secured against immovable property to credit losses to the contractual notice etc is also used when CBSL data is not
Ì Secured against motor vehicles and period, but, instead calculates ECL over a available. The Bank's internal Research Unit
other movable properties SHULRGRIPRQWKVWRUHȵHFWWKH%DQN V reviews the inputs used and the weights
expectations of the customer behaviour, its attributed to multiple scenarios.
Ì Secured against gold
likelihood of default and the Bank's future
Ì Secured against listed shares risk mitigation procedures, which could 3.4.6.8. Collateral valuation
include reducing or cancelling the facilities. 7RPLWLJDWHLWVFUHGLWULVNVRQȴQDQFLDO
Ì Secured against lease receivables
assets, the Group seeks to use collateral,
3.4.6.7. Forward looking information where possible.
These LGD rates consider the expected
EAD in comparison to the amount The economic environment remains
uncertain and future impairment charges The collateral comes in various forms,
expected to be recovered or realised from
may be impacted depending on the such as cash, securities, letter of credit/
any collateral held. Historically collected
longevity of the current economic crisis. guarantees, real estate, receivables,
loss data is used for LGD calculation
LQYHQWRULHVRWKHUQRQȴQDQFLDODVVHWV
and involves a wider set of transaction
and credit enhancements such as netting

agreements. The fair value of collateral 7RWDOYDOXHRIORDQVZULWWHQR΍GXULQJ GLVFORVHGLQ1RWH I ΖIPRGLȴFDWLRQV

D΍HFWVWKHFDOFXODWLRQRI(&/VΖWLVJHQHUDOO\ the year are given in Note 25.2. Although are substantial, the loan is derecognised, as
assessed, at a minimum, at inception and the Bank has written-down these loans, explained in Note 3.4.5.1.
to fall in line with the CBSL directives. it retains the enforcement rights on the
full capital until the legal proceedings are 3.4.6.12. Relief measures to assist
To the extent possible, the Group uses concluded. businesses and individuals
DFWLYHPDUNHWGDWDIRUYDOXLQJȴQDQFLDO DΊHFWHGE\&29,'DQG
DVVHWVKHOGDVFROODWHUDO2WKHUȴQDQFLDO 3.4.6.11. Rescheduled and restructured unprecedented macro-economic
assets which do not have readily loans conditions
determinable market values are valued The Group sometimes makes concessions &HQWUDO%DQNRI6UL/DQNDSURYLGHGȴQDQFLDO
XVLQJPRGHOV1RQȴQDQFLDOFROODWHUDO RUPRGLȴFDWLRQVWRWKHRULJLQDOWHUPV assistance to disrupted industry sectors
such as real estate, is valued based on of loans in response to the borrower's DQGWKHD΍HFWHGEXVLQHVVHVLQGLYLGXDOV
data provided by third parties such as ȴQDQFLDOGLɝFXOWLHVUDWKHUWKDQWDNLQJ in the form of debt moratoriums through
independent valuation specialists. possession of the collateral. The Group OLFHQVHGEDQNVȴQDQFLDOLQVWLWXWLRQV
considers a loan as rescheduled/ The Group actively involved in providing
3.4.6.9. Collateral repossessed restructured, when such concessions or DVVLVWDQFHWRD΍HFWHGFXVWRPHUVXQGHU
The Group's policy is to determine whether PRGLȴFDWLRQVDUHSURYLGHGDVDUHVXOW these moratorium schemes. Accordingly,
a repossessed asset can be best used for of the borrower's present or expected moratorium was extended for the
its internal operations or should be sold. ȴQDQFLDOGLɝFXOWLHVDQGWKH*URXSZRXOG customers who continued to experience
Assets determined to be useful for the not have agreed to them if the borrower FDVKȵRZGLɝFXOWLHVGXULQJWKH\HDU
internal operations are transferred to the KDGEHHQȴQDQFLDOO\KHDOWK\ΖQGLFDWRUV The 4th phase of the CBSL moratorium
relevant asset category at the lower of the RIȴQDQFLDOGLɝFXOWLHVLQFOXGHGHIDXOWV completed on 30th June 2022 for the
repossessed value or the carrying value of RQFRYHQDQWVRUVLJQLȴFDQWFRQFHUQV borrowers in the tourism sector. Upon
the original secured asset. The Bank did raised by the Credit Risk Department. completion of the 4th phase of the
not transfer any repossessed assets to Reschedulement/restructure may involve moratorium, CBSL requested licenced
its property, plant and equipment during extending the payment arrangements and EDQNVWRR΍HUIXUWKHUFRQFHVVLRQV LQ
the years ended 31st December 2022 and the agreement of new loan conditions. the form of deferment of capital and/or
2021. Once the terms have been renegotiated, interest, restructuring of credit facilities
any impairment is measured using the etc) on need basis, to the individuals and
:ULWHRΊV original EIR as calculated before the businesses, whose income or the business
)LQDQFLDODVVHWVDUHZULWWHQR΍HLWKHU PRGLȴFDWLRQRIWHUPVΖWLVWKH*URXS V KDVEHHQDGYHUVHO\D΍HFWHGE\WKH
partially or in their entirety only when the policy to monitor rescheduled/restructured current macro-economic conditions. The
Group has stopped pursuing the recovery. loans to ensure that future payments are *URXSFRQFOXGHGWKDWWKHPRGLȴFDWLRQV
For individual customers, the Group has likely to occur. When the Group reschedule/ to loan contracts consequent to the
DSROLF\RIZULWLQJR΍WKHJURVVFDUU\LQJ restructure a loan facility of a customer, the above concessions were not substantial
DPRXQWZKHQWKHȴQDQFLDODVVHWLVSDVWGXH HQWLUHSRUWIROLRRIWKHFXVWRPHULVFODVVLȴHG to derecognise the original loans and
for 7 years, based on historical experience DVPLQLPXPVWDJHDWWKHPRGLȴFDWLRQ therefore it continued to recognise the
on recovery of similar assets. For corporate date. The Group also considers whether RULJLQDOORDQVLQLWVȴQDQFLDOVWDWHPHQWV
customers, the Group individually makes VXFKDVVHWVVKRXOGEHFODVVLȴHGDVVWDJH The Group continued to recognise interest
an assessment with respect to the timing 3. Rescheduled customers will remain in DWWKHUDWHVVSHFLȴHGE\WKH&%6/RQWKH
DQGDPRXQWRIZULWHR΍EDVHGRQZKHWKHU stage 3/stage 2 for at least one year even if deferred capital, during the period of
there is a reasonable expectation of the days past due of the rescheduled loan deferment. Accordingly, the Group did
recovery. facility is less than 30 days. Restructured QRWUHTXLUHWRUHFRJQLVHDQ\PRGLȴFDWLRQ
loans are upgraded to stage 1 by the losses during the year.
ΖIWKHDPRXQWWREHZULWWHQR΍LVJUHDWHU Bank’s Risk Department based on their
than the accumulated impairment, the independent evaluation of the customers. However, when calculating the expected
GL΍HUHQFHLVȴUVWWUHDWHGDVDQDGGLWLRQWR If the upgraded rescheduled/restructured FUHGLWORVVHVWKH*URXSFODVVLȴHGDOO
the impairment that is then applied against loans become past due (for more than 30 LQGLYLGXDOO\VLJQLȴFDQWFXVWRPHUVZKRZHUH
the gross carrying amount. Any subsequent days) on a later date, loss allowance reverts under moratorium for a prolonged period
recoveries are credited to the statement of to being measured at an amount equal of time under stage 2 on a prudent basis.
SURȴWRUORVV to life time expected credit losses. Details Furthermore, a case-by-case analysis has
of restructured/rescheduled loans are EHHQFRQGXFWHGRQWKHPRVWVLJQLȴFDQW
H[SRVXUHVDQGKDYHEHHQFODVVLȴHGDV

stage 3 when the circumstances demand 3.4.9. Hedge Accounting its non-performance risk. When available,
so. Further, an additional provision the Group measures the fair value of an
The Group designates certain derivatives
has been recognised in the Financial instrument using the quoted price in an
as either:
Statements as at 31st December 2022 as active market for that instrument (Level 01
an allowance for overlay on account of all Ì Hedges of fair value of recognised valuation). A market is regarded as active
customers enjoyed the CBSL moratorium. DVVHWVOLDELOLWLHVRUȴUPFRPPLWPHQWV if transactions for the asset or liability take
(fair value hedge); SODFHZLWKVXɝFLHQWIUHTXHQF\DQGYROXPH
0RGL΋FDWLRQRI)LQDQFLDO to provide pricing information on an
Ì Hedges of highly probable future cash ongoing basis.
Instruments in the Context of
ȵRZVDWWULEXWDEOHWRDUHFRJQLVHGDVVHW
Interest Rate Benchmark Reform
or liability, or a forecast transaction If there is no quoted price in an active
– Phase 2 Amendments
FDVKȵRZKHGJH RU market, then the Group uses valuation
When the basis for determining the techniques that maximise the use of
FRQWUDFWXDOFDVKȵRZVRIDȴQDQFLDODVVHW Ì Hedges of net investments in foreign
relevant observable inputs and minimise
operations (net investment hedges)
RUȴQDQFLDOOLDELOLW\PHDVXUHGDWDPRUWLVHG the use of unobservable inputs. The chosen
cost is changed as a result of interest valuation technique incorporates all of the
Hedge accounting is used for derivatives
rate benchmark reform (IBOR reform), factors that market participants would take
designated in this way provided certain
WKH*URXSXSGDWHVWKHH΍HFWLYHLQWHUHVW into account in pricing a transaction.
criteria are met. The Group documents,
UDWHRIWKHȴQDQFLDODVVHWRUȴQDQFLDO
at the inception of the transaction, the
OLDELOLW\VLPLODUWRDȵRDWLQJUDWHȴQDQFLDO The best evidence of the fair value of a
relationship between hedging instruments
instrument and does not derecognise or ȴQDQFLDOLQVWUXPHQWDWLQLWLDOUHFRJQLWLRQ
and hedged items, as well as its risk
adjust the carrying amount (the practical is normally the transaction price - i.e. the
management objective and strategy for
expedient). This practical expedient is fair value of the consideration given or
undertaking various hedge transactions.
DSSOLHGRQO\ZKHQWKHPRGLȴFDWLRQLV received. If the Group determines that the
The Group also documents its assessment,
required as a direct consequence of IBOR IDLUYDOXHDWLQLWLDOUHFRJQLWLRQGL΍HUVIURP
both at hedge inception and on an ongoing
reform, and the new basis for determining the transaction price and the fair value
basis, of whether the derivatives that are
is evidenced neither by a quoted price
WKHFRQWUDFWXDOFDVKȵRZVLVHFRQRPLFDOO\ used in hedging transactions are highly
in an active market for an identical asset
equivalent to the previous basis. H΍HFWLYHLQR΍VHWWLQJFKDQJHVLQIDLUYDOXHV
or liability (Level 01 valuation) nor based
RUFDVKȵRZVRIKHGJHGLWHPV
on a valuation technique that uses only
ΖIFKDQJHVDUHPDGHWRDȴQDQFLDODVVHWRU
data from observable markets (Level 02
ȴQDQFLDOOLDELOLW\LQDGGLWLRQWRFKDQJHVWR The Group did not designate any derivative
YDOXDWLRQ WKHQWKHȴQDQFLDOLQVWUXPHQW
the basis for determining the contractual as a hedging instrument during the years
is initially measured at fair value, adjusted
FDVKȵRZVUHTXLUHGE\WKHLQWHUHVWUDWH ended 31st December 2022 and 2021
WRGHIHUWKHGL΍HUHQFHEHWZHHQWKH
benchmark reform, then the Group
fair value at initial recognition and the
VHTXHQWLDOO\XSGDWHVWKHH΍HFWLYHLQWHUHVW 3.4.10. Amortised Cost Measurement
transaction price. Subsequently, that
ȴUVWWRUHȵHFWWKHFKDQJHUHTXLUHGE\Ζ%25 7KHDPRUWLVHGFRVWRIDȴQDQFLDODVVHWRU GL΍HUHQFHLVUHFRJQLVHGLQSURȴWRUORVV
reform and then applies its policies on OLDELOLW\LVWKHDPRXQWDWZKLFKWKHȴQDQFLDO on an appropriate basis over the life of the
PRGLȴFDWLRQRUGHUHFRJQLWLRQRIȴQDQFLDO asset or liability is measured at initial instrument but not later than when the
DVVHWVDQGȴQDQFLDOOLDELOLWLHV recognition, minus principal repayments, valuation is wholly supported by observable
plus or minus the cumulative amortisation market data or the transaction is closed
2ΊVHWWLQJRI)LQDQFLDO,QVWUXPHQWV XVLQJWKHH΍HFWLYHLQWHUHVWPHWKRGRIDQ\ out.
GL΍HUHQFHEHWZHHQWKHLQLWLDODPRXQW
)LQDQFLDODVVHWVDQGȴQDQFLDOOLDELOLWLHVDUH
recognised and the maturity amount, minus )DLUYDOXHVUHȵHFWWKHFUHGLWULVNRIWKH
R΍VHWDQGWKHQHWDPRXQWSUHVHQWHGLQWKH
any reduction for impairment. instrument and include adjustments
Statement of Financial Position only when
WKH*URXSKDVDOHJDOULJKWWRVHWR΍WKH to take account of the credit risk of the
3.4.11. Fair Value Measurement Group entity and the counterparty where
recognised amounts and it intends either
Fair value is the price that would be appropriate. Fair value estimates obtained
to settle on a net basis or to realise the
received to sell an asset or paid to from models are adjusted for any other
asset and settle the liability simultaneously.
transfer a liability (exit price) in an orderly factors, such as liquidity risk or model
Income and expenses are presented on
transaction between market participants uncertainties; to the extent that the Group
a net basis only when permitted under
at the measurement date in the principal believes a third-party market participant
LKASs/SLFRSs or for gains and losses
or, in its absence, the most advantageous would take them into account in pricing a
arising from a group of similar transactions
market to which the Group has access at transaction.
such as in the Group's trading activity. WKDWGDWH7KHIDLUYDOXHRIDOLDELOLW\UHȵHFWV

The fair value of a demand deposit is not Ì The Group has the right to operate the corresponding adjustment is made to the
less than the amount payable on demand, asset; or carrying amount of the right of use asset, or
GLVFRXQWHGIURPWKHȴUVWGDWHRQZKLFKWKH LVUHFRUGHGLQSURȴWRUORVVLIWKHFDUU\LQJ
Ì The Group designed the asset in a way
amount could be required to be paid. amount of the right of use asset has been
that predetermines how and for what
reduced to zero.
purpose it will be used.
$IDLUYDOXHPHDVXUHPHQWRIDQRQȴQDQFLDO
asset considers a market participant's The Group presents right of use assets
3.5.1 Group as the Lessee
DELOLW\WRJHQHUDWHHFRQRPLFEHQHȴWVE\ XQGHU1RWHWRWKHȴQDQFLDOVWDWHPHQWV
using the asset in its highest and best The Group recognises a right of use while the corresponding lease liability is
use or by selling it to another market asset and a lease liability at the lease presented in Note 40, ‘Other Liabilities’.
participant that would use the asset in its commencement date. The right of use
highest and best use. asset is initially measured at cost, which 3.5.1.1. Short term leases and leases of
comprises the initial amount of the lease low value assets
The Group recognises transfers between liability adjusted for any lease payments
The Group has elected not to recognise
levels of the fair value hierarchy as of the made on or before the commencement
right-of-use assets and lease liabilities for
end of the reporting period during which date, plus any initial direct costs incurred
short term leases (that have a lease term
the change has occurred. and an estimate of costs to dismantle and
of 12 months or less) and leases of low
remove the underlying assets or to restore
value assets. The Group recognises lease
3.5. Leases the underlying asset or the site on which it is
payments associated with these leases as
located, less any lease incentives received.
At inception of a contract, the Group an expense on a straight line basis over the
assesses whether the contract is, or lease term.
The right of use asset is subsequently
contains a lease. A contract is, or contains
depreciated using straight line method
a lease, if the contract conveys the 3.5.2. Group as the Lessor
from the commencement date to the
ULJKWWRFRQWUROWKHXVHRIDQLGHQWLȴHG When the Group acts as a lessor, it
earlier of the end of the useful life of the
asset for a period of time in exchange determines at least inception whether each
right of use asset or the end of the lease
for a consideration. To assess whether OHDVHLVDȴQDQFHOHDVHRUDQRSHUDWLQJ
term. The estimated useful lives of right
a contract conveys the right to control lease. To classify each lease, the Group
of use assets are determined on the
WKHXVHRIDQLGHQWLȴHGDVVHWWKH*URXS makes an overall assessment of whether
same basis as those of property plant and
considers whether: the lease transfers substantially all of the
equipment and are in the range of 1 to 20
Ì The contract involves the use of an years. risks and rewards incidental to ownership
LGHQWLȴHGDVVHW7KLVPD\EHVSHFLȴHG of the underlying asset. If this is the case,
explicitly or implicitly and should be In addition, the right of use asset is WKHQWKHOHDVHLVDȴQDQFHOHDVHΖIQRW
physically distinct or represent periodically reduced by impairment it is an operating lease. As part of this
substantially all of the capacity of a losses, if any, and adjusted for certain re- assessment, the Group considers certain
physically distinct asset. If the supplier measurements of the lease liability. indicators such as whether the lease is for
has a substantive substitution right, the major part of the economic life of the
WKHQWKHDVVHWLVQRWLGHQWLȴHG The lease liability is initially measured at the assets.
present value of the lease payments that
Ì The Group has right to obtain When the Group is the lessor under
are not paid at the commencement date,
substantially all of the economic DȴQDQFHOHDVHFRQWUDFWWKHDPRXQWV
discounted using the interest rate implicit
EHQHȴWVIURPWKHXVHRIWKHDVVHW due under the leases, after deduction of
in the lease or, if that rate cannot be readily
throughout the period of use; and unearned interest income, are included
determined, the Groups’ incremental
Ì The Group has right to direct the use of borrowing rate. Generally, the Group uses in Note 25, 'Loans and advances’. Interest
the asset. The Group has this right its incremental borrowing rate as the income receivable is recognised in 'Net
when it has the decision-making rights discount rate. interest income' over the periods of the
that are most relevant to changing how leases so as to give a constant rate of
and for what purpose the asset is used. The lease liability is subsequently measured return on the net investment in the leases.
In rare cases where the decision about DWDPRUWLVHGFRVWXVLQJWKHH΍HFWLYH
how and for what purpose the asset is interest method. It is re-measured when The Group recognises lease payments
used is predetermined, the Group has there is a change in future lease payments received under operating leases as income
the right to direct the use of the asset if such as Group changes its assessment on a straight line basis over the lease term
either; of whether it will exercise a purchase, as part of other income.
extension or termination option. When the
lease liability is re-measured in this way, a

3.6. Fiduciary Assets 3.8. Operational Risk Events 3.10.2. Social Security Contribution Levy
7KH*URXSSURYLGHVȴGXFLDU\VHUYLFHVWKDW Provisions for operational risk events are Social Security Contribution Levy shall be
result in the holding of assets on behalf recognised for losses incurred by the paid by any person carrying on the business
RILWVFXVWRPHUV$VVHWVKHOGLQȴGXFLDU\ Group which do not relate directly to the RIVXSSO\LQJȴQDQFLDOVHUYLFHVRQWKHOLDEOH
capacity are not reported in the Financial amounts of principal outstanding for loans WXUQRYHUVSHFLȴHGLQWKH6HFRQG6FKHGXOH
Statements, as they are not assets of the and advances. The amount recognised of the Social Security Contribution Levy
Group. as a provision is the best estimate of $FW1RRIDWWKHUDWHRI
the expenditure required to settle the ZLWKH΍HFWIURPVW2FWREHU66&/
3.7. Provisions present obligation as at the reporting LVSD\DEOHRQRIWKHYDOXHDGGLWLRQ
date, taking into account the risks and DWWULEXWDEOHWRȴQDQFLDOVHUYLFHV
A provision is recognised if, as a result
of a past event, the Group has a present uncertainties that surround the events and
FLUFXPVWDQFHVWKDWD΍HFWWKHSURYLVLRQ 7KHYDOXHDGGLWLRQDWWULEXWDEOHWRȴQDQFLDO
legal or constructive obligation that can be
services shall be computed for the payment
estimated reliably, and it is probable that
3.9. Impairment of Non-Financial of SSCL on the business of supplying
DQRXWȵRZRIHFRQRPLFEHQHȴWVZLOOEH
Assets ȴQDQFLDOVHUYLFHVE\DSSO\LQJWKHDWWULEXWDEOH
required to settle the obligation.
method referred to in Chapter IIIA of the
The carrying amounts of the Group’s
Value Added Tax Act No. 14 of 2002.
The amount recognised is the best estimate QRQȴQDQFLDODVVHWVRWKHUWKDQ
of the consideration required to settle deferred tax assets, are reviewed at each
3.11. Regulatory Provisions
the present obligation at the reporting reporting date to determine whether
date, taking in to account the risks and there is any indication of impairment. 3.11.1. Deposit Insurance and Liquidity
uncertainties surrounding the obligation at If any such indication exists or when Support Scheme
that date. Where a provision is measured annual impairment testing for an asset is All Licensed Commercial Banks were
XVLQJFDVKȵRZVHVWLPDWHGWRVHWWOHWKH required, the Group estimates the asset’s required to insure their deposit liabilities
present obligation, its carrying amount is recoverable amount. An impairment loss in the "Sri Lanka Deposit Insurance and
determined based on the present value of is recognised if the carrying amount of an Liquidity Support Scheme" in terms of the
WKRVHFDVKȵRZV asset exceeds its estimated recoverable Banking Act Direction No. 2 of 2021, issued
amount. The recoverable amount of an on 06th August 2021. The Bank's total
A provision for onerous contracts is asset is the greater of its value in use capital ratio as at 31st December 2021
UHFRJQLVHGZKHQWKHH[SHFWHGEHQHȴWVWR and its fair value less cost of disposal. In H[FHHGHGDQGDFFRUGLQJO\WKH%DQN
be derived by the Group from a contract assessing value in use, the estimated future SDLGDSUHPLXPRIRIWKHHOLJLEOH
are lower than the unavoidable cost of FDVKȵRZVDUHGLVFRXQWHGWRWKHLUSUHVHQW deposits as deposit insurance premium,
meeting its obligations under the contract. value using a pre- tax discount rate that during the year ended 31st December
The provision is measured as the present UHȵHFWVFXUUHQWPDUNHWDVVHVVPHQWVRIWKH 2022. Deposit insurance premium expense
value of the lower of the expected cost of WLPHYDOXHRIPRQH\DQGWKHULVNVVSHFLȴF of the Bank/Group is given in Note 15 to
terminating the contract and the expected to the asset. the Financial Statements.
net cost of continuing with the contract.
3.10. Other Taxes 3.11.2. Crop Insurance Levy
Before a provision is established, the 3.10.1. Value Added Tax (VAT) In terms of the Finance Act No. 12 of 2013,
Group recognises any impairment loss on all institutions under the purview of Banking
9$7RQȴQDQFLDOVHUYLFHVLVFDOFXODWHGLQ
WKHDVVHWVXVHGLQIXOȴOOLQJWKHFRQWUDFW Act No. 30 of 1988, Finance Business Act
accordance with Value Added Tax (VAT)
The expense relating to any provision is No. 42 of 2011 and Regulation of Insurance
Act No. 14 of 2002 and subsequent
SUHVHQWHGLQWKH6WDWHPHQWRI3URȴWRU Industry Act No. 43 of 2000 are required
amendments thereto. The base for the
Loss net of any reimbursement. WRSD\RIWKHSURȴWDIWHUWD[DV&URS
FRPSXWDWLRQRIYDOXHDGGHGWD[RQȴQDQFLDO
VHUYLFHVLVWKHDFFRXQWLQJSURȴWEHIRUH9$7 Insurance Levy to the National Insurance
and income tax adjusted for the economic 7UXVW)XQGH΍HFWLYHIURPVW$SULO
depreciation and emoluments payable
WRHPSOR\HHVLQFOXGLQJFDVKEHQHȴWV
QRQFDVKEHQHȴWV SURYLVLRQVUHODWLQJWR
WHUPLQDOEHQHȴWV

4. NEW ACCOUNTING STANDARDS ISSUED DURING THE YEAR/CHANGES TO ALREADY EXISTING ACCOUNTING STANDARDS
Accounting Description (ΊHFWLYH Assessment of the Impact

Standard Date on the Group/Bank
SLFRS 3 - Business The amendment replaced a reference to the Framework for the 1st January No material impact on the
Combinations Preparation and Presentation of Financial Statements, issued in 2022 Financial Statements of the
1989, with a reference to the Conceptual Framework for Financial Bank/Group
5HSRUWLQJLVVXHGLQ0DUFKZLWKRXWVLJQLȴFDQWO\FKDQJLQJLWV
requirements.
LKAS 37 - Provisions, $PHQGPHQWVSHFLȴHVWKHFRVWVWKDWDQHQWLW\QHHGVWRLQFOXGHZKHQ 1st January No material impact on the
Contingent Liabilities assessing whether a contract is onerous or loss-making. 2022 Financial Statements of the
and Contingent Assets Bank/Group
LKAS 16 - Property, Amendment prohibits entities from deducting any proceeds from 1st January No material impact on the
Plant and Equipment selling items produced, while bringing that asset to the location and 2022 Financial Statements of the
condition necessary for it to be capable of operating in the manner Bank/Group
intended by management, from the cost of an item of property, plant
and equipment.
$SDUWIURPWKHDERYHWKHUHZHUHQRQHZDFFRXQWLQJVWDQGDUGVDPHQGPHQWVWRH[LVWLQJDFFRXQWLQJVWDQGDUGVWKDWEHFDPHH΍HFWLYHGXULQJ
the year. The Group has applied all relevant accounting standards which have been issued up to 31st December 2022 in the preparation of
the Financial Statements for the year ended 31st December 2022.
5. ACCOUNTING STANDARDS/AMENDMENTS ISSUED BUT NOT YET EFFECTIVE AS AT 31ST DECEMBER 2022
The following new Sri Lanka Accounting Standards/amendments which have been issued by the Institute of Chartered Accountants of Sri
/DQNDLVH΍HFWLYHIRUDQQXDOSHULRGVEHJLQQLQJRQRUDIWHUVW-DQXDU\
Accounting Description (ΊHFWLYH Assessment of the Impact

Standard Date on the Group/Bank
Amendments to The amendments clarify the following. 1st January No material impact on the
LKAS 8 - Accounting Ì Distinction between changes in accounting estimates, changes in 2023 Financial Statements of the
Policies, Changes in accounting policies and the correction of errors. Bank/Group
Accounting Ì How entities use measurement techniques and inputs to develop
Estimates and accounting estimates.
Errors Ì A change in an input or a change in a measurement technique are
changes in accounting estimates if they do not result from the
correction of prior period errors.
Amendments Ì HSODFHVWKHUHTXLUHPHQWIRUHQWLWLHVWRGLVFORVHWKHLUȆVLJQLȴFDQWȇ
5 1st January No material impact on the
to LKAS 1 accounting policies with a requirement to disclose ‘material’ 2023 Financial Statements of the
- Presentation accounting policies. Bank/Group
of Financial Ì Provides guidance on how entities apply the concept of materiality
Statements in making decisions about accounting policy disclosures.
Ì Specify the requirements for classifying liabilities as current or

non-current.
Amendments to The amendments introduce an exception to the initial recognition 1st January No material impact on the
LKAS 12 - Income H[HPSWLRQLQ/.$67KHH΍HFWRIWKHVHDPHQGPHQWVHVVHQWLDOO\PHDQ 2023 Financial Statements of the
Taxes that the initial recognition exemption is not available for transactions Bank/Group
which involve the recognition of both an asset and liability which in turn
OHDGVWRHTXDODQGRSSRVLWHWHPSRUDU\GL΍HUHQFHV7KHUHIRUHGHIHUUHG
WD[HVDUHFDOFXODWHGDQGERRNHGIRUERWKWHPSRUDU\GL΍HUHQFHVDWLQLWLDO
recognition and subsequently.
Sri Lanka SLFRS 17 is a comprehensive new accounting standard for insurance 1st January No material impact on the
Accounting contracts covering recognition and measurement, presentation and 2025 Financial Statements of the
Standard - SLFRS GLVFORVXUH2QFHH΍HFWLYH6/)56ZLOOUHSODFH6/)56 ΖQVXUDQFH Bank/Group
17 (Insurance Contracts).
Contracts)

6 GROSS INCOME
ACCOUNTING POLICY
5HYHQXHLVUHFRJQLVHGWRWKHH[WHQWWKDWLWLVSUREDEOHWKDWWKHHFRQRPLFEHQHȴWVZLOOȵRZWRWKH*URXSDQGWKHUHYHQXHFDQ
EHUHOLDEO\PHDVXUHG6SHFLȴFUHFRJQLWLRQFULWHULDWKDWPXVWEHPHWEHIRUHUHFRJQLVLQJUHYHQXHLVGLVFXVVHGXQGHU1RWH1HW
Interest Income, Note 8 - Net Fee and Commission Income, Note 9 - Net (Loss)/Gain from Trading and Note 10 - Net Gain on
Derecognition of Financial Assets.
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Interest income 7.1 157,619,458 85,986,952 164,775,651 92,427,928

Fee & commission income 8 21,940,763 13,239,648 22,685,656 14,236,984
Net (loss)/gain from trading 9 (2,248,355) 399,243 (2,266,306) 399,243
1HWJDLQRQGHUHFRJQLWLRQRIȴQDQFLDODVVHWV 10 541,825 150,413 559,216 150,413
Net other operating income 11 19,716,827 4,794,047 20,248,037 5,860,575
197,570,518 104,570,303 206,002,254 113,075,143
7 NET INTEREST INCOME
ACCOUNTING POLICY
Recognition of Interest Income
7KH*URXSUHFRJQLVHVLQWHUHVWLQFRPHIRUDOOȴQDQFLDOLQVWUXPHQWVPHDVXUHGDWDPRUWLVHGFRVWLQWHUHVWEHDULQJȴQDQFLDODVVHWV
PHDVXUHGDW)92&ΖDQG)93/XVLQJWKHH΍HFWLYHLQWHUHVWUDWH (Ζ5 PHWKRG7KH(Ζ5LVWKHUDWHWKDWH[DFWO\GLVFRXQWVWKHHVWLPDWHG
IXWXUHFDVKUHFHLSWVWKURXJKWKHH[SHFWHGOLIHRIWKHȴQDQFLDOLQVWUXPHQWRUZKHQDSSURSULDWHDVKRUWHUSHULRGWRWKHQHWFDUU\LQJ
DPRXQWRIWKHȴQDQFLDODVVHW
The EIR (and therefore, the amortised cost of the asset) is calculated by taking into account any discount or premium on acquisition,
fees and costs that are an integral part of the EIR. The Group recognises interest income using a rate of return that represents the best
HVWLPDWHRIDFRQVWDQWUDWHRIUHWXUQRYHUWKHH[SHFWHGOLIHRIWKHORDQ+HQFHLWUHFRJQLVHVWKHH΍HFWRISRWHQWLDOO\GL΍HUHQWLQWHUHVW
rates charged at various stages, and other characteristics of the product life cycle (including prepayments, penalty interest and charges).
ΖIH[SHFWDWLRQVUHJDUGLQJWKHFDVKȵRZVRQWKHȴQDQFLDODVVHWDUHUHYLVHGIRUUHDVRQVRWKHUWKDQFUHGLWULVNWKHDGMXVWPHQWLVERRNHGDV
a positive or negative adjustment to the carrying amount of the asset in the Statement of Financial Position with an increase or reduction
in interest income. The adjustment is subsequently amortised through interest and similar income in the Income Statement.
:KHQDȴQDQFLDODVVHWEHFRPHVFUHGLWLPSDLUHG>DVVHWRXWLQ1RWH D @DQGLVWKHUHIRUHUHJDUGHGDVȆ6WDJHȇWKH*URXS
FDOFXODWHVLQWHUHVWLQFRPHE\DSSO\LQJWKHH΍HFWLYHLQWHUHVWUDWHWRWKHQHWDPRUWLVHGFRVWRIWKHȴQDQFLDODVVHWΖIWKHȴQDQFLDODVVHW
cures and is no longer credit-impaired, the Group reverts to calculating interest income on a gross basis.
7.1 Interest Income
Bank Group
For the year ended 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Placements with banks 579,168 194,059 580,318 194,059

)LQDQFLDODVVHWVUHFRJQLVHGWKURXJKSURȴWRUORVVPHDVXUHGDWIDLUYDOXH 870,330 431,623 870,330 431,623
Reverse repurchase agreements 167,031 269,627 285,624 386,956
- loans & advances 117,837,726 61,008,589 124,206,091 67,313,779
- debt & other instruments 27,487,927 18,624,774 28,153,468 18,625,790
Interest income accrued on impaired loans & advances (Note 25.2) 6,278,942 3,009,971 6,281,486 3,027,412
Financial assets - fair value through other comprehensive income 4,398,334 2,448,309 4,398,334 2,448,309
157,619,458 85,986,952 164,775,651 92,427,928

7.2 Interest Expense
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Due to banks 707,483 1,421,552 1,995,720 1,890,347

Securities sold under repurchase agreements (Note 7.3) 5,305,493 205,078 5,262,143 196,882
due to depositors 73,677,806 38,307,965 76,183,079 39,661,625
due to other borrowers 447,100 491,523 447,100 491,523
due to debt securities holders 3,453,444 3,637,408 4,389,923 4,352,565
Interest rate SWAP 102,186 70,400 102,186 70,400
Finance leases (Notes 31.1) 423,576 183,835 353,407 246,386
84,117,088 44,317,761 88,733,558 46,909,728
Net interest income 73,502,370 41,669,191 76,042,093 45,518,200
7.3 Net Interest Income from Sri Lanka Government Securities
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Interest income 31,742,892 21,095,759 32,527,026 21,214,104

Interest expense (Note 7.2) (5,305,493) (205,078) (5,262,143) (196,882)
Net interest income from government securities 26,437,399 20,890,681 27,264,883 21,017,222
8 NET FEE AND COMMISSION INCOME
ACCOUNTING POLICY
Fee Income Earned from Services that are Provided over a Certain Period of Time
Fees earned for the provision of services over a period of time are accrued over that period. These fees include professional
fees, trade service fees, commission income and asset management fees etc. Loan commitment fees for loans that are likely
to be drawn down and other credit related fees are deferred (together with any incremental costs) and recognised as an
DGMXVWPHQWWRWKHH΍HFWLYHLQWHUHVWUDWHRIWKHORDQ:KHQLWLVXQOLNHO\WKDWDORDQZLOOEHGUDZQGRZQWKHORDQFRPPLWPHQW
fees are recognised over the commitment period on a straight-line basis.
Fee Income from Providing Transaction Services

Fees arising from negotiating or participating in the negotiation of a transaction for a third party, such as the arrangement of an
acquisition of shares or other securities or the purchase or sale of businesses, are recognised on completion of the underlying
transaction. Fees or components of fees that are linked to a certain performance are recognised as the related services are
performed.
Expenses on Account of Customer Loyalty Program

$ZDUGFUHGLWVXQGHUFXVWRPHUOR\DOW\SURJUDPDUHDFFRXQWHGIRUDVDVHSDUDWHO\LGHQWLȴDEOHFRPSRQHQWRIWKHWUDQVDFWLRQLQ
which they are granted. The fair value of the consideration received in respect of the initial sale is allocated between the award
credits and the other components of the sale. Expense incurred for customer loyalty program is accounted under fee and
commission expense.
Other Fee and Commission Expense

Other fee and commission expense relate mainly to transactions and services fees which are expensed as the services are
received. Fee and commission expenses are recognised on an accrual basis.

8 NET FEE AND COMMISSION INCOME CONTD.
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Fee & commission income 21,940,763 13,239,648 22,685,656 14,236,984

Fee & commission expense (2,499,396) (1,764,995) (2,500,860) (1,765,975)
Net fee & commission income 19,441,367 11,474,653 20,184,796 12,471,009
Comprising:
Loans & advances 1,643,688 1,543,218 1,953,214 1,823,670
Credit & debit cards 5,806,497 3,473,342 5,806,497 3,473,342
Trade & remittances 8,660,900 3,458,994 8,660,900 3,458,994
Deposits 526,362 462,066 526,379 462,085
Guarantees 566,567 650,878 566,629 650,942
2WKHUEDQNLQJ ȴQDQFLDOVHUYLFHV 2,237,353 1,886,155 2,671,177 2,601,976
Net fee & commission income 19,441,367 11,474,653 20,184,796 12,471,009
9 NET (LOSS)/GAIN FROM TRADING
ACCOUNTING POLICY
1HW ORVV JDLQIURPWUDGLQJLQFOXGHVDOOWKHJDLQVDQGORVVHVIURPFKDQJHVLQIDLUYDOXHDQGGLYLGHQGIURPȴQDQFLDODVVHWV
PHDVXUHGDWIDLUYDOXHWKURXJKSURȴWRUORVV'LYLGHQGLQFRPHLVUHFRJQLVHGZKHQWKH*URXSȇVULJKWWRUHFHLYHWKHSD\PHQWLV
HVWDEOLVKHG7KLVFDWHJRU\DOVRLQFOXGHVIRUHLJQH[FKDQJHGL΍HUHQFHVDULVLQJIURPGHULYDWLYHFRQWUDFWVZKLFKDUHQRWGHVLJQDWHG
as hedging instruments.
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
'HULYDWLYH΋QDQFLDOLQVWUXPHQWV
Forward exchange contract revaluation (loss)/gain
- Inter bank (1,752,084) 1,813,164 (1,752,084) 1,813,164
- Others (443,906) (1,177,536) (443,906) (1,177,536)
)LQDQFLDODVVHWVUHFRJQLVHGWKURXJKSUR΋WRUORVVȁPHDVXUHGDWIDLU
value
Government Securities
Net mark to market loss (128,670) (231,521) (128,670) (231,521)
Equity Securities
Net mark to market gain/(loss) 72,383 (6,805) 54,432 (6,805)
Dividend income 3,922 1,941 3,922 1,941
(2,248,355) 399,243 (2,266,306) 399,243

10 NET GAIN ON DERECOGNITION OF FINANCIAL ASSETS
ACCOUNTING POLICY
1HWJDLQ ORVV RQGHUHFRJQLWLRQRIȴQDQFLDODVVHWVLQFOXGHUHDOLVHGJDLQ ORVV UHODWHGWRȴQDQFLDODVVHWVPHDVXUHGDWIDLUYDOXH
WKURXJKSURȴWRUORVVGHEWLQVWUXPHQWVPHDVXUHGDW)92&ΖDQGȴQDQFLDOLQVWUXPHQWVPHDVXUHGDWDPRUWLVHGFRVW
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Recognised at:
IDLUYDOXHWKURXJKSURȴWRUORVV 555,306 114,418 572,697 114,418
- fair value through other comprehensive income (13,481) 30,313 (13,481) 30,313
- amortised cost - 5,682 - 5,682
541,825 150,413 559,216 150,413
11 NET OTHER OPERATING INCOME
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Exchange income
- Inter bank 3,281,409 (1,215,853) 3,281,409 (1,215,853)
- Others 15,175,164 5,428,990 15,175,164 5,428,990
'LYLGHQGLQFRPHIURPȴQDQFLDODVVHWVDW)92&Ζ 162,245 172,427 162,485 172,667
Dividend income from subsidiaries 395,163 157,699 - -
3URȴWRQGLVSRVDORISURSHUW\SODQW HTXLSPHQW 1,641 2,007 2,092 3,459
Rental & other income 701,205 248,777 1,626,887 1,471,312
19,716,827 4,794,047 20,248,037 5,860,575
11.1 Exchange income represents both revaluation gain/(loss) on the Bank's net open position and realised exchange gain/(loss) on
foreign exchange contracts including the Bank's currency notes operation. Loss on forward exchange contracts amounting to Rs
0Q SURȴWRI5V0Q LVUHSRUWHGXQGHU1RWH 1HW ORVV JDLQIURPWUDGLQJ DVUHTXLUHGE\WKH6UL/DQND$FFRXQWLQJ
Standard SLFRS 9 (Financial Instruments). Accordingly total exchange income of the Bank & the Group for the year ended 31st
December 2022 amounted to Rs 16,261 Mn (2021: Rs 4,849 Mn).

12 IMPAIRMENT CHARGE/(REVERSAL)
ACCOUNTING POLICY
7KHDFFRXQWLQJSROLFLHVDGRSWHGLQGHWHUPLQLQJWKHLPSDLUPHQWDOORZDQFHIRUȴQDQFLDODVVHWVLQFOXGLQJORDQVDQGDGYDQFHVDUH
given in Note 3.4.6 to the Financial Statements.
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Cash & cash equivalents (Note 20.2)

Stage 1 (46,940) 61,817 (46,920) 61,822
Stage 2 - - - -
Stage 3 - - - -
(46,940) 61,817 (46,920) 61,822
Placements with banks (Note 22.2)
Stage 1 2,162 (54) 2,162 (54)
Stage 2 - - - -
Stage 3 - - - -
2,162 (54) 2,162 (54)
Financial assets at amortised cost - loans & advances (Note 25.2)
Stage 1 5,098,043 864,257 5,081,396 776,790
Stage 2 20,554,192 9,763,769 20,703,899 10,213,725
Stage 3 28,691,655 2,080,800 28,656,170 3,209,022
54,343,890 12,708,826 54,441,465 14,199,537
Financial assets at amortised cost - debt & other instruments (Note 26.3)
Stage 1 (5,625,277) 3,713,213 (5,625,277) 3,713,213
Stage 2 12,894,749 - 12,894,749 -
Stage 3 (7,369) (7,529) (7,369) (7,529)
7,262,103 3,705,684 7,262,103 3,705,684
Financial assets at fair value through other comprehensive income (Note 43.2)
Stage 1 - 34,373 - 34,373
Stage 2 538,230 - 538,230 -
Stage 3 - - - -
538,230 34,373 538,230 34,373
Credit related commitments & contingencies (Note 45.2)
Stage 1 639,857 150,146 669,949 113,173
Stage 2 288,329 270,739 288,329 270,739
Stage 3 (320,818) 153,283 (320,818) 153,283
607,368 574,168 637,460 537,195
Property, plant & equipment (Note 29.3) (803) - (803) -
Others - - 74,424 20,643
62,706,010 17,084,814 62,908,121 18,559,200

12.1 Measurement of Expected Credit Losses

12.1 (a) Loans and advances
The Bank witnessed an increasing number of customers going into arrears in 2022, amidst severe economic stress triggered by lack
of foreign reserves, fuel crisis, social unrest, political instability etc. As a result, impairment charge for Stage 3 loans and advances
amounted to Rs 28.7 Bn for the year ended 31st December 2022.
7KH*URXSHYDOXDWHGDOOLQGLYLGXDOO\VLJQLȴFDQWFXVWRPHUVVKRZLQJVLJQVRIGHIDXOWDQGDGHTXDWHSURYLVLRQLQJPDGHLQWKH)LQDQFLDO
Statements. When assessing the impairment provision for large exposures, several prudent measures such as extending the
UHFRYHU\FDVKȵRZVGLVFRXQWLQJWKHSURSHUW\YDOXHVWRUHȵHFWDPRUHUHDVRQDEOHHVWLPDWHRIWKHIDLUYDOXHHWFZHUHDOVRDSSOLHG
Meanwhile the Group extended various relief measures, including restructuring and reschedulement options to assist the customers
during these challenging times. The 5th phase of the CBSL moratorium was also granted to eligible customers. All these relief packages
R΍HUHGWRFXVWRPHUVKHLJKWHQHGWKH*URXSȇVFUHGLWULVN)XUWKHUPRUHLWZDVGHWHUPLQHGWKDWULVLQJLQȵDWLRQKLJKLQWHUHVWUDWHVDQG
income tax rates were some of the other key concerns likely to impact the repayment capacity of individuals and businesses in the
PHGLXPWRVKRUWWHUP$FFRUGLQJO\WKH*URXSDOVRUHYLVLWHGLWVFROOHFWLYHLPSDLUPHQWPRGHOVWRHQVXUHWKDWWKH\VXɝFLHQWO\FDSWXUH
WKHLQFUHDVHGULVN$VH[SODLQHGLQ1RWH E WKH%DQNSUXGHQWO\FODVVLȴHGVRPHH[SRVXUHVXQGHU6WDJHZLWKDGGLWLRQDO
provisions recognised as allowance for overlays. In addition, the Probability of Default (PD), Loss Given Default (LGD) rates and the
Economic Factor Adjustment were updated based on the most recent recovery and market data available as at the reporting date.
Further, LGD rates were adjusted incorporating a discount on property values where applicable. These resulted in further increasing
WKHLPSDLUPHQWSURYLVLRQVGXULQJWKH\HDUSDUWLFXODUO\IRUORDQVFODVVLȴHGXQGHU6WDJHDQG6WDJH
12.1 (b) Sri Lanka Development Bonds (SLDB) and Sri Lanka Sovereign Bonds (SLISB)
The Group recognised an impairment charge of Rs 7.8 Bn on account of SLDBs and SLISBs during the year, following the downgrade
of the country’s sovereign rating and the announcement made by the Government in April 2022 stating the Government’s intention
to restructure its external public debt. Total impairment provision on account of SLDBs/SLISBs amounted to Rs 18.3 Bn as at 31st
December 2022.
13 PERSONNEL EXPENSES
ACCOUNTING POLICY
6KRUW7HUP(PSOR\HH%HQH΋WV
6KRUWWHUPHPSOR\HHEHQHȴWREOLJDWLRQVDUHPHDVXUHGRQDQXQGLVFRXQWHGEDVLVDQGDUHH[SHQVHGDVWKHUHODWHGVHUYLFHLV
SURYLGHG$OLDELOLW\LVUHFRJQLVHGIRUWKHDPRXQWH[SHFWHGWREHSDLGXQGHUVKRUWWHUPFDVKERQXVRUSURȴWVKDULQJSODQVLIWKH
Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and
the obligation can be estimated reliably.
'H΋QHG&RQWULEXWLRQ3ODQV
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HQWLW\ DIXQG DQGZLOOKDYHQROHJDORUFRQVWUXFWLYHREOLJDWLRQWRSD\IXUWKHUFRQWULEXWLRQVLIWKHIXQGGRHVQRWKROGVXɝFLHQW
DVVHWVWRSD\DOOHPSOR\HHEHQHȴWVUHODWLQJWRHPSOR\HHVHUYLFHVLQWKHFXUUHQWDQGSULRUSHULRGVDVGHȴQHGLQWKH6UL/DQND
$FFRXQWLQJ6WDQGDUG/.$6 (PSOR\HH%HQHȴWV
7KHFRQWULEXWLRQSD\DEOHE\WKHHPSOR\HUWRDGHȴQHGFRQWULEXWLRQSODQLVLQSURSRUWLRQWRWKHVHUYLFHVUHQGHUHGWRWKH
Group by the employees and is recorded as an expense under ‘Personnel expenses’ as and when they become due. Unpaid
contributions are recorded as a liability under ‘Other liabilities’ in Note 40.
7KH*URXSFRQWULEXWHVRIWKHVDODU\RIHDFKHPSOR\HHWRWKH(PSOR\HHVȇ7UXVW)XQG)XUWKHUWKHVXEVLGLDU\FRPSDQLHV
FRQWULEXWHRQWKHVDODU\RIHDFKHPSOR\HHWRWKH(PSOR\HHVȇ3URYLGHQW)XQG7KHDERYHH[SHQVHVDUHLGHQWLȴHGDV
FRQWULEXWLRQVWRȊ'HȴQHG&RQWULEXWLRQ3ODQVȋDVGHȴQHGLQWKH6UL/DQND$FFRXQWLQJ6WDQGDUG/.$6 (PSOR\HH%HQHȴWV
'H΋QHG%HQH΋W3ODQV
$GHȴQHGEHQHȴWSODQLVDSRVWHPSOR\PHQWEHQHȴWSODQRWKHUWKDQDGHȴQHGFRQWULEXWLRQSODQ$FFRUGLQJO\WKHSHQVLRQ
IXQGVWD΍JUDWXLW\DQGWKH(PSOR\HHVȇ3URYLGHQW)XQGRIWKH%DQNZHUHFRQVLGHUHGDVGHȴQHGEHQHȴWSODQVDVSHU6UL/DQND
$FFRXQWLQJ6WDQGDUG/.$6 (PSOR\HH%HQHȴWV

13 PERSONNEL EXPENSES CONTD.
Pension Fund
The Bank has a pension fund for all members who joined the Bank for permanent employment before 1st June 2003. A member
is eligible for a monthly pension after attainment of the retirement age and completion of 10 years uninterrupted service. The
%DQNPHDVXUHVWKHSUHVHQWYDOXHRIWKHSHQVLRQREOLJDWLRQZKLFKLVDGHȴQHGEHQHȴWSODQZLWKWKHDGYLFHRIDQLQGHSHQGHQW
professional actuary using the Projected Unit Credit (PUC) method as required by Sri Lanka Accounting Standard - LKAS 19
(PSOR\HH%HQHȴWV $QDFWXDULDOYDOXDWLRQLVFDUULHGRXWDWHYHU\\HDUHQGWRDVFHUWDLQWKHIXOOOLDELOLW\XQGHUWKH)XQG
7KH%DQNȇVREOLJDWLRQLQUHVSHFWRIGHȴQHGEHQHȴWSHQVLRQSODQLVFDOFXODWHGE\HVWLPDWLQJWKHDPRXQWRIIXWXUHEHQHȴWWKDW
HPSOR\HHVKDYHHDUQHGLQUHWXUQIRUWKHLUVHUYLFHLQWKHFXUUHQWDQGSULRUSHULRGVDQGGLVFRXQWLQJWKDWEHQHȴWWRGHWHUPLQH
its present value, then deducting the fair value of any plan assets to determine the net amount to be shown in the Statement
RI)LQDQFLDO3RVLWLRQ7KHYDOXHRIDQ\GHȴQHGEHQHȴWDVVHWLVUHVWULFWHGWRWKHSUHVHQWYDOXHRIDQ\HFRQRPLFEHQHȴWVDYDLODEOH
in the form of refunds from the plan or reductions in the future contributions to the plan. In order to calculate the present
YDOXHRIHFRQRPLFEHQHȴWVFRQVLGHUDWLRQLVJLYHQWRDQ\PLQLPXPIXQGLQJUHTXLUHPHQWVWKDWDSSO\WRDQ\SODQLQWKH%DQN$Q
HFRQRPLFEHQHȴWLVDYDLODEOHWRWKH%DQNLILWLVUHDOLVDEOHGXULQJWKHOLIHRIWKHSODQRURQVHWWOHPHQWRIWKHSODQOLDELOLWLHV
7KH%DQNGHWHUPLQHVWKHQHWLQWHUHVWH[SHQVH LQFRPH RQWKHQHWGHȴQHGEHQHȴWOLDELOLW\ DVVHW E\DSSO\LQJWKHGLVFRXQWUDWH

XVHGWRPHDVXUHWKHGHȴQHGEHQHȴWREOLJDWLRQDWWKHEHJLQQLQJRIWKHDQQXDOSHULRGWRWKHQHWGHȴQHGEHQHȴWOLDELOLW\ DVVHW DW
the beginning of the annual period. The discount rate is the yield at the reporting date on government bonds that have maturity
dates approximating to the terms of the Bank’s obligations.
The increase in the pension fund liabilities attributable to the services provided by employees, who are members of the Fund,
GXULQJWKH\HDUHQGHGVW'HFHPEHU FXUUHQWVHUYLFHFRVW KDVEHHQUHFRJQLVHGLQWKH6WDWHPHQWRI3URȴWRU/RVVXQGHU
‘Personnel expenses’ together with the net interest income/expense. The Bank recognises the total actuarial gain/loss that arise
in calculating the Bank’s obligation in respect of a plan in other comprehensive income during the period in which it occurs.
The demographic assumptions underlying the valuation are early withdrawals from service and retirement on medical grounds,
death before and after retirement etc.
The assets of the fund are held separately from those of the Bank’s assets and are administered independently. The subsidiaries
do not operate pension funds.
Gratuity
ΖQFRPSOLDQFHZLWKWKH*UDWXLW\$FW1RRISURYLVLRQLVPDGHLQWKHDFFRXQWVIURPWKHȴUVW\HDURIVHUYLFHIRUJUDWXLW\
payable to employees who joined the Bank on or after 1st June 2003, as they are not in pensionable service of the Bank.
3URYLVLRQLVQRWPDGHLQWKHDFFRXQWVIRUJUDWXLW\SD\DEOHWRHPSOR\HHVZKRMRLQHGSULRUWRVW-XQHDQGFRPSOHWHGȴYH
or more years of continuous service, as the Bank has its own non-contributory pension scheme in force. However, if employees
who are eligible for pension resign before retirement age, the Bank is liable to pay gratuity to such employees.
An actuarial valuation is carried out at every year end to ascertain the full liability under gratuity.
The gratuity liability is not externally funded. All subsidiary companies too carry out actuarial valuations to ascertain their
respective gratuity liabilities.
7KH*URXSGHWHUPLQHVWKHLQWHUHVWH[SHQVHRQWKLVGHȴQHGEHQHȴWOLDELOLW\E\DSSO\LQJWKHGLVFRXQWUDWHXVHGWRPHDVXUH
WKHGHȴQHGEHQHȴWOLDELOLW\DWWKHEHJLQQLQJRIWKHDQQXDOSHULRGWRWKHGHȴQHGEHQHȴWOLDELOLW\DWWKHEHJLQQLQJRIWKHDQQXDO
period. The discount rate is the yield at the reporting date on government bonds that have maturity dates approximating to the
terms of the Group’s obligations.
The increase in gratuity liabilities attributable to the services provided by employees during the year ended 31st December 2022
FXUUHQWVHUYLFHFRVW KDVEHHQUHFRJQLVHGLQWKH6WDWHPHQWRI3URȴWRU/RVVXQGHUȆ3HUVRQQHOH[SHQVHVȇWRJHWKHUZLWKWKHQHW
interest expense. The Group recognises the total actuarial gain/loss that arise in calculating the Group’s obligation in respect of
gratuity, in other comprehensive income during the period in which it occurs.
The demographic assumptions underlying the valuation are retirement age (60 years), early withdrawals from service and
retirement on medical grounds etc.

Employees’ Provident Fund - Bank

Employees’ Provident Fund is an approved private provident fund which has been set up to meet the provident fund liabilities of
WKH%DQNWRZKLFKWKH%DQNDQGHPSOR\HHVFRQWULEXWHDQGUHVSHFWLYHO\RQWKHVDODU\RIHDFKHPSOR\HH(PSOR\HHVZKR
DUHPHPEHUVRIWKHIXQGHQWLWOHWRUHFHLYHLQWHUHVWDWDJXDUDQWHHGUDWHRI1DWLRQDO6DYLQJV%DQNRQH\HDUȴ[HGGHSRVLWUDWH QHW
RILQFRPHWD[ RQWKHLUEDODQFHHYHQLIWKHIXQGHDUQVDORZHUUHWXUQIURPLWVLQYHVWPHQWLQDJLYHQȴQDQFLDO\HDU$FFRUGLQJO\WKLV
REOLJDWLRQZDVWUHDWHGDVDGHȴQHGEHQHȴWOLDELOLW\DQGDQDFWXDULDOYDOXDWLRQZDVFRQGXFWHGWRYDOXHWKH%DQNȇVREOLJDWLRQRQWKH
same.
Unutilised Accumulated Leave

The Bank’s liability towards the accumulated leave which is expected to be utilised beyond one year from the end of the
UHSRUWLQJSHULRGLVWUHDWHGDVRWKHUORQJWHUPHPSOR\HHEHQHȴWV7KH%DQNȇVQHWREOLJDWLRQWRZDUGVXQXWLOLVHGDFFXPXODWHG
OHDYHLVFDOFXODWHGE\GLVFRXQWLQJWKHDPRXQWRIIXWXUHEHQHȴWWKDWHPSOR\HHVKDYHHDUQHGLQUHWXUQIRUWKHLUVHUYLFHLQWKH
FXUUHQWDQGSULRUSHULRGVWRGHWHUPLQHWKHSUHVHQWYDOXHRIVXFKEHQHȴWV7KHGLVFRXQWUDWHLVWKH\LHOGDWWKHUHSRUWLQJGDWHRQ
government bonds that have maturity dates approximating to the terms of the Bank’s obligation. The calculation is performed
using the Projected Unit Credit method. Net change in liability for unutilised accumulated leave including any actuarial gain/(loss)
LVUHFRJQLVHGLQWKH6WDWHPHQWRI3URȴWRU/RVVXQGHUȆ3HUVRQQHOH[SHQVHVȇLQWKHSHULRGLQZKLFKWKH\DULVH
The Group’s net obligation to pension fund, gratuity, EPF interest guarantee and unutilised accumulated annual leave is
disclosed under Note 38 to the Financial Statements.
Share Based Payment Transactions

The Group does not have any share-based payment transactions in force as at 31st December 2022.
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Salaries & bonus 9,892,897 8,874,188 11,023,766 10,017,551

Contributions to EPF & ETF 921,022 859,815 1,017,933 949,501
Provision on gratuity (Note 38.1.2) 332,972 251,756 374,034 284,441
Charge/(reversal) on pension fund (Note 38.4.2) 198,465 (1,143,120) 198,465 (1,143,120)
Others 1,150,692 700,357 1,264,333 807,905
12,496,048 9,542,996 13,878,531 10,916,278
13.1 In 2021, the Bank recognised a gain of Rs 1,959 Mn (Note 38.4.2) on account of pension fund due to change in the retirement age
from 55 to 60 years. Accordingly, the Bank reported a net reversal of Rs 1,143 Mn on account of the pension fund in the previous
ȴQDQFLDO\HDU

14 DEPRECIATION AND AMORTISATION EXPENSES
ACCOUNTING POLICY
Depreciation of Property, Plant and Equipment
The Group provides depreciation from the date the assets are available for use up to the date of disposal, at the following rates,
on a straight-line basis, over the periods appropriate to the estimated useful lives, based on the pattern in which the asset’s
IXWXUHHFRQRPLFEHQHȴWVDUHH[SHFWHGWREHFRQVXPHGE\WKH*URXS
Improvements to leasehold properties are depreciated over the shorter of the lease term and their useful lives unless it is
reasonably certain that the Group will obtain ownership by the end of the lease term. Freehold lands are not depreciated.
'HSUHFLDWLRQRIDQDVVHWFHDVHVDWWKHHDUOLHURIWKHGDWHWKDWWKHDVVHWLVFODVVLȴHGDVKHOGIRUVDOHRUWKHGDWHWKDWWKHDVVHWLV
derecognised. Depreciation does not cease when the asset becomes idle or is retired from active use unless the asset is fully
depreciated.
Asset Category Depreciation Rate per Annum (%)

2022 2021
Freehold buildings 2.50 2.50

Improvements to leasehold properties 10.00 - 20.00 20.00
Computer equipment - Freehold 15.00 - 25.00 15.00 - 25.00
Motor vehicles 12.50 - 20.00 12.50 - 20.00
2ɝFHHTXLSPHQW 5.00 - 20.00 5.00 - 20.00
)L[WXUHV ȴWWLQJV 4.00 - 20.00 4.00 - 20.00
Amortisation of Intangible Assets

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when the asset is available for use, over the best estimate of its useful economic life, based on a pattern in which the asset’s
HFRQRPLFEHQHȴWVDUHFRQVXPHGE\WKH*URXS7KH*URXSDVVXPHVWKDWWKHUHLVQRUHVLGXDOYDOXHIRULWVLQWDQJLEOHDVVHWV
Asset Category Amortisation Rate per Annum (%)

2022 2021
Computer software 25.00 25.00

Licenses 5.00 - 33.33 5.00 - 33.33
Amortisation of Right-of-Use Assets

The right of use assets are depreciated using a straight-line method from the commencement date to the earlier of the end
of the useful life of the right of use assets or the end of the lease term. The estimated useful lives of right of use assets are
determined on the same basis as those of property plant and equipment and are in the range of 1 to 20 years.
Changes in Estimates
Depreciation/amortisation methods, useful lives and residual values are reassessed at each reporting date and adjusted if
DSSURSULDWH'XULQJWKH\HDUHQGHGVW'HFHPEHUWKH*URXSFRQGXFWHGDQRSHUDWLRQDOHɝFLHQF\UHYLHZDQGHVWLPDWHV
were revised accordingly.

Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Depreciation of property, plant & equipment (Note 29) 771,878 767,104 1,196,384 1,190,237
Amortisation of intangible assets (Note 30) 279,017 390,304 297,980 415,758
Amortisation of right-of-use assets (Note 31) 1,494,073 1,296,963 902,397 885,345
2,544,968 2,454,371 2,396,761 2,491,340
15 OTHER OPERATING EXPENSES
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Directors' fees & expenses 97,853 82,868 158,451 139,638

Auditors' remuneration (Note 15.1) 45,684 22,911 55,037 31,065
Professional & legal expenses 628,728 102,443 652,631 133,197
Deposit insurance premium 1,060,346 914,403 1,086,560 938,858
Donations 1,000 802 1,000 802
Operating lease expenses 245,553 108,044 296,052 136,086
2ɝFHDGPLQLVWUDWLRQH[SHQVHV 3,542,298 2,637,892 3,551,030 2,670,724
Establishment expenses 1,623,055 1,392,027 1,813,429 1,552,608
Other overhead expenses (Note 15.2) 5,762,374 3,409,307 5,998,835 3,708,761
13,006,891 8,670,697 13,613,025 9,311,739
15.1 Auditors' Remuneration
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Audit fees 14,465 12,595 18,897 15,682

Audit related fees & expenses 10,575 3,736 10,695 5,162
Non - audit expenses 20,644 6,580 25,445 10,221
45,684 22,911 55,037 31,065
15.2 Other overhead expenses include advertising and business promotion expenses, credit card related expenses and other
miscellaneous expenses incurred on day to day operations of the Bank/Group.

16 INCOME TAX EXPENSE
ACCOUNTING POLICY
As per Sri Lanka Accounting Standard - LKAS 12 (Income Taxes), tax expense is the aggregate amount included in determination
RISURȴWRUORVVIRUWKHSHULRGLQUHVSHFWRIFXUUHQWDQGGHIHUUHGWD[DWLRQΖQFRPHWD[H[SHQVHLVUHFRJQLVHGLQWKH6WDWHPHQWRI
3URȴWRU/RVVH[FHSWWRWKHH[WHQWLWUHODWHVWRLWHPVUHFRJQLVHGGLUHFWO\LQHTXLW\RURWKHUFRPSUHKHQVLYHLQFRPHLQZKLFKFDVH
it is recognised in equity or in other comprehensive income. The Group applied IFRIC Interpretation 23 “Uncertainty over Income
7D[7UHDWPHQWȋLQWKHGHWHUPLQDWLRQRIWD[DEOHSURȴWWD[EDVHVXQXVHGWD[ORVVHVXQXVHGWD[FUHGLWVDQGWD[UDWHVZKHQWKHUH
is uncertainty over the income tax treatment.
Current Taxation
Current tax assets and liabilities consist of amounts expected to be recovered from or paid to the Commissioner General
of Inland Revenue in respect of the current year, using the tax rates and tax laws enacted or substantively enacted on the
reporting date and any adjustment to tax payable in respect of prior years. Accordingly, provision for taxation is based on the
SURȴWIRUWKH\HDUDGMXVWHGIRUWD[DWLRQSXUSRVHVLQDFFRUGDQFHZLWKWKHSURYLVLRQVRIWKHΖQODQG5HYHQXH$FW1RRI
DQGWKHΖQODQG5HYHQXH $PHQGPHQW $FW1RRIDWWKHUDWHVVSHFLȴHGLQ1RWHWRWKH)LQDQFLDO6WDWHPHQWV
Deferred Taxation
'HIHUUHGWD[LVSURYLGHGRQWHPSRUDU\GL΍HUHQFHVDWWKHUHSRUWLQJGDWHEHWZHHQWKHWD[EDVHVRIDVVHWVDQGOLDELOLWLHVDQGWKHLU
FDUU\LQJDPRXQWVIRUȴQDQFLDOUHSRUWLQJSXUSRVHVIRUDOO*URXSHQWLWLHV'HIHUUHGWD[OLDELOLWLHVDUHUHFRJQLVHGIRUDOOWD[DEOH
WHPSRUDU\GL΍HUHQFHVH[FHSW
Ì Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is
QRWDEXVLQHVVFRPELQDWLRQDQGDWWKHWLPHRIWKHWUDQVDFWLRQD΍HFWVQHLWKHUWKHDFFRXQWLQJSURȴWQRUWD[DEOHSURȴWRUORVV
Ì ΖQUHVSHFWRIWD[DEOHWHPSRUDU\GL΍HUHQFHVDVVRFLDWHGZLWKLQYHVWPHQWVLQVXEVLGLDULHVZKHUHWKHWLPLQJRIWKHUHYHUVDORI
WKHWHPSRUDU\GL΍HUHQFHVFDQEHFRQWUROOHGDQGLWLVSUREDEOHWKDWWKHWHPSRUDU\GL΍HUHQFHVZLOOQRWUHYHUVHLQWKH
foreseeable future.
'HIHUUHGWD[DVVHWVDUHUHFRJQLVHGIRUDOOGHGXFWLEOHWHPSRUDU\GL΍HUHQFHVFDUULHGIRUZDUGXQXVHGWD[FUHGLWVDQGXQXVHG
WD[ORVVHV LIDQ\ WRWKHH[WHQWWKDWLWLVSUREDEOHWKDWWD[DEOHSURȴWZLOOEHDYDLODEOHDJDLQVWZKLFKWKHGHGXFWLEOHWHPSRUDU\
GL΍HUHQFHVFDUULHGIRUZDUGXQXVHGWD[FUHGLWVDQGXQXVHGWD[ORVVHVFDQEHXWLOLVHGH[FHSW
Ì KHUHWKHGHIHUUHGWD[DVVHWUHODWLQJWRWKHGHGXFWLEOHWHPSRUDU\GL΍HUHQFHVDULVLQJIURPWKHLQLWLDOUHFRJQLWLRQRIDQDVVHW
:
RUOLDELOLW\LQDWUDQVDFWLRQWKDWLVQRWDEXVLQHVVFRPELQDWLRQDQGDWWKHWLPHRIWKHWUDQVDFWLRQD΍HFWVQHLWKHUWKHDFFRXQWLQJ
SURȴWQRUWD[DEOHSURȴWRUORVV
Ì ΖQUHVSHFWRIGHGXFWLEOHWHPSRUDU\GL΍HUHQFHVDVVRFLDWHGZLWKLQYHVWPHQWVLQVXEVLGLDULHVGHIHUUHGWD[DVVHWVDUHUHFRJQLVHG
RQO\WRWKHH[WHQWWKDWLWLVSUREDEOHWKDWWKHWHPSRUDU\GL΍HUHQFHVZLOOUHYHUVHLQWKHIRUHVHHDEOHIXWXUHDQGWD[DEOHSURȴW
ZLOOEHDYDLODEOHDJDLQVWZKLFKWKHWHPSRUDU\GL΍HUHQFHVFDQEHXWLOLVHG
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is probable
WKDWVXɝFLHQWWD[DEOHSURȴWZLOOEHDYDLODEOHWRDOORZWKHGHIHUUHGWD[DVVHWWREHXWLOLVHG8QUHFRJQLVHGGHIHUUHGWD[DVVHWVDUH
UHDVVHVVHGDWHDFKUHSRUWLQJGDWHDQGDUHUHFRJQLVHGWRWKHH[WHQWWKDWLWKDVEHFRPHSUREDEOHWKDWIXWXUHWD[DEOHSURȴWZLOO
allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised
or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
&XUUHQWDQGGHIHUUHGWD[DVVHWVDQGOLDELOLWLHVDUHR΍VHWRQO\WRWKHH[WHQWWKDWWKH\UHODWHWRLQFRPHWD[HVLPSRVHGE\WKHVDPH
taxation authority, there is a legal right and intention to settle on a net basis and it is allowed under the tax law of the relevant
jurisdiction. Details of current tax liabilities/(receivables) and deferred tax liabilities/(assets) are given in Note 39 and Note 32 to
the Financial Statements respectively.

Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Current tax expense

&XUUHQWWD[EDVHGRQSURȴWIRUWKH\HDU 1RWH 16,671,170 7,224,162 17,277,470 8,270,591
(Over)/under provision in respect of previous years
Due to change in deductible loan loss provision method (Note 16.5) 2,376,727 - 2,445,580 -
Due to rate reduction (Note 16.3.1) - (817,459) - (882,241)
Other (reversals)/charges including settlements (Note 39.1) (383,674) - (412,906) 19,076
Total current tax expense 18,664,223 6,406,703 19,310,144 7,407,426
Deferred tax (reversal)/expense
Due to rate (increase)/decrease (Note 16.3) (1,775,695) 724,646 (1,798,395) 678,048
Due to change in deductible loan loss provision method (Note 32.1) (2,618,024) - (2,686,877) -
'XHWRFKDQJHLQWHPSRUDU\GL΍HUHQFHV (12,380,510) (2,754,902) (12,490,763) (3,116,829)
Total deferred tax reversal (Note 32.1) (16,774,229) (2,030,256) (16,976,035) (2,438,781)
Total income tax expense 1,889,994 4,376,447 2,334,109 4,968,645
(΍HFWLYHWD[UDWH
5HFRQFLOLDWLRQRIWKH$FFRXQWLQJ3UR΋WWR&XUUHQW7D[([SHQVH
Bank Group
% Rs 000 % Rs 000 % Rs 000 % Rs 000
3URȴWEHIRUHWD[ 15,024,146 16,833,944 16,394,619 18,825,106
7D[H΍HFWRQDFFRXQWLQJSURȴWEHIRUHWD[ 26.1 3,923,296 24.0 4,040,147 26.4 4,334,513 24.0 4,518,025
7D[HΊHFWRQ
Disallowable expenses 99.7 14,974,073 26.1 4,389,686 93.7 15,363,139 27.7 5,204,107
Tax deductible expenses (3.2) (483,251) (2.3) (388,133) (4.2) (696,349) (3.3) (622,807)
Exempt income (11.6) (1,742,948) (4.9) (817,538) (10.6) (1,742,948) (4.3) (817,538)
Income from other sources - - - - 0.1 19,115 - 3,224
Tax losses - - - - - - (0.1) (14,420)
&XUUHQWWD[EDVHGRQSURȴWIRUWKH\HDU
(Note 39.1) 111.0 16,671,170 42.9 7,224,162 105.4 17,277,470 44.0 8,270,591
(Over)/under provision in respect of
previous years (Note 39.1)
Due to change in deductible loan loss
provision method (Note 16.5) 15.8 2,376,727 - - 14.9 2,445,580 - -
Due to rate reduction (Note 16.3.1) - - (4.9) (817,459) - - (4.7) (882,241)
Other (reversals)/charges including
settlements (2.6) (383,674) - - (2.5) (412,906) 0.1 19,076
Deferred tax (reversal)/expense (Note 32.1)
Due to rate (increase)/decrease
(Note 16.3) (11.8) (1,775,695) 4.3 724,646 (11.0) (1,798,395) 3.6 678,048
Due to change in deductible loan loss
provision method (Note 32.1) (17.4) (2,618,024) - - (16.4) (2,686,877) - -
Due to change in temporary
GL΍HUHQFHV (82.4) (12,380,510) (16.4) (2,754,902) (76.2) (12,490,763) (16.6) (3,116,829)
Total income tax expense 12.6 1,889,994 25.9 4,376,447 14.2 2,334,109 26.4 4,968,645

16 INCOME TAX EXPENSE CONTD.

16.2 Applicable Income Tax Rates
Company 2022 2021

1st Six months 2nd Six months
Sampath Bank PLC

S C Securities (Pvt) Ltd
Sampath Centre Ltd
Sampath Information Technology Solutions Ltd
7KH*URXSZDVOLDEOHIRULQFRPHWD[RQORFDOGLYLGHQGUHFHLYHGIRUȴUVWVL[PRQWKVRIWKH\HDURIDVVHVVPHQWDW
DQGVHFRQGVL[PRQWKVRIWKH\HDURIDVVHVVPHQWDW
16.3 Change in Income Tax Rate

16.3.1 For the year ended 31st December 2021
7KH*URXSDSSOLHGWKHUHYLVHGUDWHRIDQGRWKHUDPHQGPHQWVLQOLQHZLWKWKHΖQODQG5HYHQXH$PHQGPHQW$FW1RRI
to calculate the income tax and deferred tax assets/liabilities as at 31st December 2021.
16.3.2 For the year ended 31st December 2022

7KH*URXSFRPSXWHGWKHLQFRPHWD[OLDELOLW\IRUȴUVWVL[PRQWKVRIWKH\HDURIDVVHVVPHQWE\DSSO\LQJWKHLQFRPHWD[
UDWHRI7KHUHYLVHGLQFRPHWD[UDWHRIDQGRWKHUDPHQGPHQWVLQOLQHZLWKWKHΖQODQG5HYHQXH $PHQGPHQW $FW1R
45 of 2022 were considered to calculate the income tax liability of the Group for second six months of the year of assessment
2022/2023. The deferred tax assets/liabilities of the Group as at 31st December 2022 were computed using the revised income tax
UDWHRI
16.4 Surcharge Tax

7KH*RYHUQPHQWRI6UL/DQNDLPSRVHGDRQHWLPHWD[UHIHUUHGWRDV6XUFKDUJH7D[DWWKHUDWHRIRQFRPSDQLHVWKDWKDYH
earned a taxable income in excess of Rs 2 Bn for the year of assessment 2020/2021. According to the Surcharge Tax Act No. 14
RIWKH6XUFKDUJH7D[VKDOOEHGHHPHGWREHDQH[SHQGLWXUHLQWKHȴQDQFLDOVWDWHPHQWVFRPPHQFHGRQVW-DQXDU\
Based on the Surcharge Tax Act requirements and the SoAT on Accounting for Surcharge Tax issued by the Institute of Chartered
Accountants of Sri Lanka, the Group has recognised the total liability to the Surcharge Tax as an adjustment to the opening
retained earnings as at 1st January 2022.
16.5 Change in deductible loan loss provision method for income tax
$FFRUGLQJWRWKHJRYHUQPHQWJD]HWWH1RGDWHGVW$SULOVSHFLȴFORDQORVVSURYLVLRQVPDGHLQDFFRUGDQFHZLWKWKH
CBSL directives had been allowed as claimable loan loss provisions for income tax purpose up to 31st December 2021. However, as
per gazette No. 2305/05 dated 25th October 2022, provisions for impairment charges of Stage 1 and 2 have not been considered
claimable. Consequently, only Stage 3 impairment provisions (subject to conditions) have been considered as claimable loan loss
SURYLVLRQVIRUWD[SXUSRVHLQWKHFXUUHQW\HDU6SHFLȴFDWLRQVRIWKH*D]HWWHKDVEHHQDSSOLHGIURPVW-DQXDU\$FFRUGLQJO\
the transition adjustment as at 1st January 2022 has been calculated separately based on the new law and required adjustments
made in the Financial Statements.
17 EARNINGS PER SHARE
ACCOUNTING POLICY
The Group presents basic and diluted Earnings per Share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing
WKHSURȴWRUORVVDWWULEXWDEOHWRRUGLQDU\HTXLW\VKDUHKROGHUVRIWKH%DQNE\WKHZHLJKWHGDYHUDJHQXPEHURIRUGLQDU\VKDUHV
RXWVWDQGLQJGXULQJWKHSHULRG'LOXWHG(36LVGHWHUPLQHGE\DGMXVWLQJERWKWKHSURȴWDWWULEXWDEOHWRWKHRUGLQDU\HTXLW\
VKDUHKROGHUVDQGWKHZHLJKWHGDYHUDJHQXPEHURIRUGLQDU\VKDUHVRXWVWDQGLQJIRUWKHH΍HFWVRIDOOGLOXWLYHSRWHQWLDORUGLQDU\
shares, if any. The Group did not have any dilutive potential ordinary shares as at 31st December 2022.

17.1 Earnings per Share: Basic/Diluted
Bank Group
2022 2021 2022 2021
Amount used as the numerator

3URȴWDIWHUWD[IRUWKH\HDUDWWULEXWDEOHWR
equity holders (Rs) 13,134,152,314 12,457,497,152 14,060,509,726 13,856,460,848
No. of ordinary shares used as the denominator

Weighted average number of ordinary shares (Note 17.1.1) 1,144,373,955 1,144,373,955 1,144,373,955 1,144,373,955
Basic/diluted earnings per ordinary share (Rs) 11.48 10.89 12.29 12.11
17.1.1 Weighted Average Number of Ordinary Shares for Basic/Diluted EPS

Bank & Group
Outstanding No. of Shares Weighted Average No. of

Shares
2022 2021 2022 2021
Number of shares in issue as at 1st January 1,144,373,955 381,457,985 1,144,373,955 381,457,985

Add:
Increase in number of shares due to sub-division of shares - 762,915,970 - 762,915,970
Number of shares in issue/weighted average number of
shares as at 31st December 1,144,373,955 1,144,373,955 1,144,373,955 1,144,373,955
18 DIVIDEND PAID AND PROPOSED
ACCOUNTING POLICY
3URYLVLRQIRUȴQDOGLYLGHQGDQGLQWHULPGLYLGHQG VFULS DUHUHFRJQLVHGDWWKHWLPHWKHGLYLGHQGLVUHFRPPHQGHGDQGGHFODUHG
by the Board of Directors and approved by the shareholders. However, interim cash dividend is recognised when the Board
approves such dividend in accordance with the Companies Act No. 07 of 2007 and its amendments.
2022 2021
Rs 000 Rs 000
Final dividend paid for the years 2021 & 2020 respectively
Out of dividend received 149,535 11,628
2XWRIQRUPDOSURȴW 4,714,054 3,135,400
Cash dividend paid 4,863,589 3,147,028
Dividend per Ordinary Share (Rs) 4.25 2.75
Final dividend proposed for the years 2022 (Note 18.1) & 2021 respectively
Out of dividend received 561,330 149,535
2XWRIQRUPDOSURȴW 4,702,790 4,714,054
Cash/Scrip dividend payable 5,264,120 4,863,589
Dividend per Ordinary Share (Rs) 4.60 4.25

18 DIVIDEND PAID AND PROPOSED CONTD.

18.1 7KH%RDUGRI'LUHFWRUVKDVUHFRPPHQGHGDȴQDOGLYLGHQGRI5VSHUVKDUH 5VSHUVKDUHLQFDVKDQG5VSHUVKDUHLQ
VFULS IRUWKHȴQDQFLDO\HDUHQGHGVW'HFHPEHUVXEMHFWWRWKHDSSURYDORIWKHVKDUHKROGHUVDWWKH$QQXDO*HQHUDO0HHWLQJ
to be held on 30th March 2023.
18.2 ΖQDFFRUGDQFHZLWK6UL/DQND$FFRXQWLQJ6WDQGDUG/.$6 (YHQWVDIWHUWKH5HSRUWLQJ3HULRG DERYHSURSRVHGȴQDOGLYLGHQG

has not been recognised as a liability as at the year end. Necessary disclosures have been made under Note 49 to the Financial
Statements, "Events after reporting period" as required by the said standard.
18.3 $VSHUWKHΖQODQG5HYHQXH$PHQGPHQW$FW1RRIWKHSURSRVHGȴQDOGLYLGHQGIRUWKH\HDUHQGHGVW'HFHPEHULV
VXEMHFWWRD:LWKKROGLQJ7D[ :+7 RI 1LO $FFRUGLQJO\WRWDO:LWKKROGLQJ7D[OLDELOLW\RQGLYLGHQGSURSRVHGIRUWKH\HDU
ended 31st December 2022 amounted to Rs 789.6 Mn.
19 ANALYSIS OF FINANCIAL INSTRUMENTS BY MEASUREMENT BASIS
ACCOUNTING POLICY
Financial instruments are measured on an ongoing basis either at fair value or at amortised cost. The Accounting Policies
GHVFULEHKRZHDFKFDWHJRU\RIȴQDQFLDOLQVWUXPHQWLVPHDVXUHGDQGKRZLQFRPHDQGH[SHQVHVLQFOXGLQJIDLUYDOXHJDLQVDQG
ORVVHVDUHUHFRJQLVHG7KHIROORZLQJWDEOHDQDO\VHVWKHFDUU\LQJDPRXQWVRIWKHȴQDQFLDOLQVWUXPHQWVE\FDWHJRU\DVGHȴQHGLQ
Sri Lanka Accounting Standard - SLFRS 9 (Financial Instruments) under headings of the Statement of Financial Position.
19.1 Analysis of Financial Instruments by Measurement Basis - Bank
As at 31st December 2022

Note Fair Value Amortised Fair Value Total
WKURXJK3UR΋W Cost through Other
or Loss Comprehensive
Income
Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
Cash & cash equivalents 20 - 79,162,545 - 79,162,545
Balances with Central Bank of Sri Lanka 21 - 31,579,185 - 31,579,185
Placements with banks 22 - 10,927,216 - 10,927,216
Reverse repurchase agreements - 10,072,569 - 10,072,569
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 23 44,598 - - 44,598
)LQDQFLDODVVHWVUHFRJQLVHGWKURXJKSURȴWRU
loss - measured at fair value 24 4,641,277 - - 4,641,277
- loans & advances 25 - 811,157,649 - 811,157,649
- debt & other instruments 26 - 278,775,796 - 278,775,796
comprehensive income 27 - - 32,772,930 32,772,930
Other assets - 21,174,017 - 21,174,017
Total Financial Assets 4,685,875 1,242,848,977 32,772,930 1,280,307,782
Financial Liabilities
Due to banks 34 - 11,297,181 11,297,181
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 23 1,449,393 - 1,449,393
Securities sold under repurchase agreements - 2,283,291 2,283,291
- due to depositors 35 - 1,096,099,874 1,096,099,874
- due to other borrowers 36 - 9,173,923 9,173,923
- due to debt securities holders 37 - 25,259,536 25,259,536
Dividend payable - 187,141 187,141
Other liabilities - 24,725,468 24,725,468
Total Financial Liabilities 1,449,393 1,169,026,414 1,170,475,807

19.2 Analysis of Financial Instruments by Measurement Basis - Bank

Income
Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 23 1,399,119 - - 1,399,119
- loans & advances 25 - 762,588,294 - 762,588,294
Other assets - 10,645,606 - 10,645,606
Due to banks 34 - 23,653,247 23,653,247
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 23 607,923 - 607,923
- due to depositors 35 - 977,945,952 977,945,952
Total Financial Liabilities 607,923 1,066,153,419 1,066,761,342

19 ANALYSIS OF FINANCIAL INSTRUMENTS BY MEASUREMENT BASIS CONTD.

19.3 Analysis of Financial Instruments by Measurement Basis - Group

Income
Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 23 44,598 - - 44,598
- loans & advances 25 - 839,976,738 - 839,976,738
Other assets - 22,481,685 - 22,481,685
Due to banks 34 - 15,255,184 15,255,184
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 23 1,449,393 - 1,449,393
- due to depositors 35 - 1,115,155,879 1,115,155,879
Total Financial Liabilities 1,449,393 1,200,278,657 1,201,728,050

19.4 Analysis of Financial Instruments by Measurement Basis - Group

Income
Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 23 1,399,119 - - 1,399,119
- loans & advances 25 - 795,804,353 - 795,804,353
Other assets - 11,587,129 - 11,587,129
Due to banks 34 - 31,532,293 31,532,293
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 23 607,923 - 607,923
- due to depositors 35 - 994,317,574 994,317,574
Total Financial Liabilities 607,923 1,097,492,319 1,098,100,242

20 CASH AND CASH EQUIVALENTS
ACCOUNTING POLICY
Cash and cash equivalents comprise cash in hand, balances with banks, money at call and short notice that are subject to an
LQVLJQLȴFDQWULVNRIFKDQJHVLQWKHLUYDOXH&DVKDQGFDVKHTXLYDOHQWVDUHFDUULHGDWDPRUWLVHGFRVWLQWKH6WDWHPHQWRI)LQDQFLDO
Position and used by the Group in the management of its short-term commitments. All cash and cash equivalent balances held
by the Group entities were available for use by the Group.
)RUWKHSXUSRVHRIWKH6WDWHPHQWRI&DVK)ORZVFDVKDQGFDVKHTXLYDOHQWVFRQVLVWRIFDVKDQGVKRUWWHUPGHSRVLWVDVGHȴQHG
above, placements with banks (less than 3 months) (Note 22), net of unfavourable balances with local & foreign banks (Note 34.2).
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Local currency in hand 18,206,833 19,308,886 18,358,248 19,443,575

Foreign currency in hand 3,560,890 692,285 3,560,890 692,285
Balances with local banks 174,876 341,803 205,543 351,723
Balances with foreign banks 55,413,612 2,137,788 55,413,612 2,137,788
Money at call & short notice 1,907,621 500,418 1,907,621 500,418
Gross cash & cash equivalents 79,263,832 22,981,180 79,445,914 23,125,789
Impairment for expected credit losses (Note 20.2) (101,287) (98,181) (101,327) (98,201)
Net cash & cash equivalents 79,162,545 22,882,999 79,344,587 23,027,588
20.1 Analysis of Cash and Cash Equivalents based on Exposure to Credit Risk
Bank
Stage 1 Stage 2 Stage 3 Total Total

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Balances with local banks 174,876 - - 174,876 341,803

Balances with foreign banks 55,413,612 - - 55,413,612 2,137,788
Money at call & short notice 1,907,621 - - 1,907,621 500,418
57,496,109 - - 57,496,109 2,980,009
Impairment for expected credit losses (101,287) - - (101,287) (98,181)
57,394,822 - - 57,394,822 2,881,828
Group

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Balances with local banks 205,543 - - 205,543 351,723

Balances with foreign banks 55,413,612 - - 55,413,612 2,137,788
Money at call & short notice 1,907,621 - - 1,907,621 500,418
57,526,776 - - 57,526,776 2,989,929
Impairment for expected credit losses (101,327) - - (101,327) (98,201)
57,425,449 - - 57,425,449 2,891,728

20.2 Impairment for Expected Credit Losses - Cash and Cash Equivalents
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Stage 1
Balance as at 1st January 98,181 36,364 98,201 36,379
Net (reversal)/charge for the year (Note 12) (46,940) 61,817 (46,920) 61,822
$PRXQWVZULWWHQR΍GXULQJWKH\HDU - - - -
2WKHUDGMXVWPHQWVLQFOXGLQJH[FKDQJHGL΍HUHQFHV 50,046 - 50,046 -
Balance as at 31st December 101,287 98,181 101,327 98,201
Total
$PRXQWVZULWWHQR΍GXULQJWKH\HDU - - - -
21 BALANCES WITH CENTRAL BANK OF SRI LANKA
ACCOUNTING POLICY
As required by the provisions of Section 93 of the Monetary Law Act, a cash balance is maintained with the Central Bank of Sri
/DQND$VDWVW'HFHPEHUWKHPLQLPXPFDVKUHVHUYHUHTXLUHPHQWZDV RIWKHUXSHHGHSRVLWOLDELOLWLHV
There is no reserve requirement for foreign currency deposit liabilities of the Domestic Banking Unit (DBU) and the deposit
liabilities of the Foreign Currency Banking Unit (FCBU).
Balances with Central Bank of Sri Lanka are carried at amortised cost in the Statement of Financial Position.
Bank & Group

Rs 000 Rs 000
Statutory reserve requirement 31,579,185 30,874,556

31,579,185 30,874,556
22 PLACEMENTS WITH BANKS

Bank & Group

Rs 000 Rs 000
Maturity less than three months

Placements - in Sri Lanka 3,039,342 -
Placements - out side Sri Lanka 7,890,429 2,739,907
Gross placements with banks 10,929,771 2,739,907
Impairment for expected credit losses (Note 22.2) (2,555) (393)
Net placements with banks 10,927,216 2,739,514

22 PLACEMENTS WITH BANKS CONTD.
22.1 Analysis of Placements with Banks based on Exposure to Credit Risk

Bank & Group

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Placements - in Sri Lanka 3,039,342 - - 3,039,342 -

Placements - out side Sri Lanka 7,890,429 - - 7,890,429 2,739,907
10,929,771 - - 10,929,771 2,739,907
Impairment for expected credit losses (2,555) - - (2,555) (393)
10,927,216 - - 10,927,216 2,739,514
22.2 Impairment for Expected Credit Losses - Placements with Banks

Bank & Group
2022 2021
Rs 000 Rs 000
Stage 1
Balance as at 1st January 393 447
Net charge/(reversal) for the year (Note 12) 2,162 (54)
$PRXQWVZULWWHQR΍GXULQJWKH\HDU - -
Other adjustments - -
Balance as at 31st December 2,555 393
Total
Balance as at 1st January 393 447
Net charge/(reversal) for the year (Note 12) 2,162 (54)
Other adjustments - -
Balance as at 31st December 2,555 393
23 DERIVATIVE FINANCIAL INSTRUMENTS
ACCOUNTING POLICY
'HULYDWLYHVDUHȴQDQFLDOLQVWUXPHQWVWKDWGHULYHWKHLUYDOXHLQUHVSRQVHWRFKDQJHVLQLQWHUHVWUDWHVȴQDQFLDOLQVWUXPHQWSULFHV
commodity prices, foreign exchange rates etc. Derivatives are categorised as trading unless they are designated as hedging
instruments. The accounting policies pertaining to “Derivative Financial Instruments” are given in Note 3.4.3.2 to the Financial
Statements.
7KHWDEOHEHORZVKRZVWKHIDLUYDOXHVRIGHULYDWLYHȴQDQFLDOLQVWUXPHQWVRIWKH%DQN*URXSUHFRUGHGDVDVVHWVRUOLDELOLWLHV
together with their notional amounts. The notional amounts indicate the volume of transactions outstanding at the year end and
are indicative of neither the market risk nor the credit risk.

Bank & Group

Assets Liabilities Notional Assets Liabilities Notional
Amount Amount
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Forward exchange contracts

Sales 12,784 1,867 2,361,824 451,069 83 7,365,785
Purchases 1,375 12,369 1,653,914 91 3,478 793,084
Currency SWAPS
Sales - 1,435,157 5,881,131 860,295 17,296 18,779,942
Purchases 30,439 - 5,020,107 87,664 587,066 22,561,922
44,598 1,449,393 14,916,976 1,399,119 607,923 49,500,733
24 FINANCIAL ASSETS RECOGNISED THROUGH PROFIT OR LOSS - MEASURED AT FAIR VALUE
ACCOUNTING POLICY
7KHDFFRXQWLQJSROLFLHVSHUWDLQLQJWRȊ)LQDQFLDO$VVHWV5HFRJQLVHGWKURXJK3URȴWRU/RVV0HDVXUHGDW)DLU9DOXHȋDUHJLYHQLQ
Note 3.4.3.3 to the Financial Statements.
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Treasury bills (Note 24.1) 3,612,501 2,248,848 3,612,501 2,248,848
Treasury bonds (Note 24.2) 1,028,776 1,609,730 1,028,776 1,609,730
Equity Securities
Quoted equity securities (Note 24.3) - 49,126 181,118 49,126
4,641,277 3,907,704 4,822,395 3,907,704
24.1 Treasury Bills

Bank & Group

Rs 000 Rs 000
Amortised cost 3,632,426 2,251,305
(Loss)/gain from mark to market valuation as at 1st January (2,457) 1,611

Movement during the year (17,468) (4,068)
Loss from mark to market valuation as at 31st December (19,925) (2,457)
Market value 3,612,501 2,248,848

24 FINANCIAL ASSETS RECOGNISED THROUGH PROFIT OR LOSS - MEASURED AT FAIR VALUE CONTD.
24.2 Treasury Bonds
Bank & Group

Rs 000 Rs 000
Amortised cost 1,179,838 1,649,590

Movement during the year (111,202) (227,453)
Market value 1,028,776 1,609,730
24.3 Quoted Equity Securities

Bank

No. of Cost of Market No. of Cost of Market
Ordinary Investment Value Ordinary Investment Value
Shares Rs 000 Rs 000 Shares Rs 000 Rs 000
Name of the company

National Development Bank PLC - - - 713,002 121,509 49,126
- - 121,509 49,126
Loss from mark to market valuation as at 1st

January (72,383) (65,578)
Movement during the year 72,383 (6,805)
Loss from mark to market valuation as at
31st December - (72,383)
Market value - 49,126

Group

No. of Cost of Market No. of Cost of Market
Shares Rs 000 Rs 000 Shares Rs 000 Rs 000
Name of the company

National Development Bank PLC - - - 713,002 121,509 49,126
Browns Investments PLC 9,352,116 74,466 65,465 - - -
LOLC Holdings PLC 50,992 20,085 20,294 - - -
Lanka IOC PLC 259,870 58,943 52,689 - - -
Expolanka Holdings PLC 81,216 15,720 14,802 - - -
Royal Ceramics Lanka PLC 974,319 29,557 27,573 - - -
Tokyo Cement Company (Lanka) PLC 8,938 298 295 - - -
Total 199,069 181,118 121,509 49,126
Loss from mark to market valuation as at 1st

January (72,383) (65,578)
Movement during the year 54,432 (6,805)
Loss from mark to market valuation as at
31st December (17,951) (72,383)
Market value 181,118 49,126
$QDO\VLVRI)LQDQFLDO$VVHWV5HFRJQLVHGWKURXJK3UR΋WRU/RVV0HDVXUHGDW)DLU9DOXH
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
By collateralisation
Pledged as collateral - - - -
Unencumbered 4,641,277 3,907,704 4,822,395 3,907,704
Gross total 4,641,277 3,907,704 4,822,395 3,907,704
By currency
Sri Lankan Rupee 4,641,277 3,907,704 4,822,395 3,907,704
Other currency - - - -
Gross total 4,641,277 3,907,704 4,822,395 3,907,704

25 LOANS AND ADVANCES
ACCOUNTING POLICY
7KHNH\DFFRXQWLQJSROLFLHVSHUWDLQLQJWRȴQDQFLDOLQVWUXPHQWVLQFOXGLQJȊ/RDQVDQG$GYDQFHVȋDUHJLYHQLQ1RWHVWRWKH
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Gross loans & advances (Note 25.1)

Stage 1 513,418,507 503,956,693 519,894,217 514,189,505
Stage 2 305,856,795 253,038,870 322,149,877 269,250,382
Stage 3 100,846,349 56,110,864 111,046,135 67,129,766
920,121,651 813,106,427 953,090,229 850,569,653
Impairment for expected credit losses (Note 25.2)

Stage 1 (9,917,653) (4,543,545) (9,934,498) (4,577,037)
Stage 2 (44,751,656) (20,471,275) (45,651,154) (21,221,066)
Stage 3 (54,294,693) (25,503,313) (57,527,839) (28,967,197)
(108,964,002) (50,518,133) (113,113,491) (54,765,300)
Net loans & advances 811,157,649 762,588,294 839,976,738 795,804,353
25.1 Analysis of Loans & Advances

25.1.1 By Product
Bank Group
As at 31st December 2022 Mix 2021 Mix Growth 2022 Mix 2021 Mix Growth
Rs 000 % Rs 000 % % Rs 000 % Rs 000 % %
Bills of exchange 2,488,683 0.27 2,983,458 0.37 (16.58) 2,488,683 0.26 2,983,458 0.35 (16.58)
Leasing (Note 25.3) 28,705,433 3.12 34,074,028 4.19 (15.76) 56,212,902 5.90 65,814,123 7.74 (14.59)
Housing loans 55,209,592 6.00 52,274,587 6.43 5.61 55,209,592 5.80 52,274,587 6.14 5.61
Export loans 40,778,354 4.43 27,111,512 3.33 50.41 40,778,354 4.28 27,111,512 3.19 50.41
Import loans 97,849,340 10.64 55,534,539 6.83 76.20 97,849,340 10.27 55,534,539 6.53 76.20
5HȴQDQFHORDQV 8,869,594 0.96 15,688,382 1.93 (43.46) 8,869,594 0.93 15,688,382 1.84 (43.46)
Term loans 474,987,554 51.62 430,565,945 52.94 10.32 471,868,911 49.49 429,524,951 50.50 9.86
Overdraft 98,383,441 10.69 89,152,981 10.97 10.35 97,387,334 10.22 89,121,223 10.48 9.28
6WD΍ORDQV 10,888,428 1.18 10,717,624 1.32 1.59 11,026,852 1.16 10,886,326 1.28 1.29
Pawning & gold loans 67,897,237 7.38 44,033,535 5.42 54.19 76,603,695 8.04 49,840,602 5.86 53.70
Credit cards 20,790,055 2.26 18,850,357 2.32 10.29 20,790,032 2.18 18,850,357 2.22 10.29
Money market loans 11,363,511 1.24 29,930,693 3.68 (62.03) 11,363,511 1.19 29,930,693 3.52 (62.03)
Factoring 1,837,544 0.20 2,168,352 0.27 (15.26) 2,209,110 0.23 2,676,105 0.31 (17.45)
Others 72,885 0.01 20,434 - 256.68 432,319 0.05 332,795 0.04 29.91
Gross loans & advances 920,121,651 100.00 813,106,427 100.00 13.16 953,090,229 100.00 850,569,653 100.00 12.05

25.1.2 By Currency
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Sri Lankan Rupee 752,580,251 717,192,054 785,548,829 754,655,280

United States Dollar 155,771,306 89,459,595 155,771,306 89,459,595
Euro 9,922,420 5,139,388 9,922,420 5,139,388
Great Britain Pounds 1,749,645 1,220,102 1,749,645 1,220,102
Australian Dollar 94,450 90,781 94,450 90,781
Japanese Yen - 2,374 - 2,374
New Zealand Dollar 3,579 2,133 3,579 2,133
Gross loans & advances 920,121,651 813,106,427 953,090,229 850,569,653
25.1.3 By Product and Currency
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 % Rs 000 % Rs 000 % Rs 000 %
Local currency
Bills of exchange 199,719 0.02 144,078 0.02 199,719 0.02 144,078 0.02
Leasing 28,705,433 3.12 34,074,028 4.19 56,212,902 5.90 65,814,123 7.74
Housing loans 54,481,331 5.92 51,568,427 6.34 54,481,331 5.72 51,568,427 6.06
Export loans 3,107,861 0.34 6,866,129 0.84 3,107,861 0.33 6,866,129 0.81
Import loans 87,188,988 9.48 49,043,107 6.03 87,188,988 9.15 49,043,107 5.77
5HȴQDQFHORDQV 8,869,594 0.96 15,688,382 1.93 8,869,594 0.93 15,688,382 1.84
Term loans 369,913,048 40.19 370,518,058 45.56 366,794,405 38.48 369,477,064 43.44
Overdraft 87,331,782 9.49 83,578,967 10.28 86,335,675 9.06 83,547,209 9.82
6WD΍ORDQV 10,888,428 1.18 10,717,624 1.32 11,026,852 1.16 10,886,326 1.28
Pawning & gold loans 67,897,237 7.38 44,033,535 5.42 76,603,695 8.04 49,840,602 5.86
Credit cards 20,790,055 2.26 18,850,357 2.32 20,790,032 2.18 18,850,357 2.22
Money market loans 11,363,511 1.24 29,930,693 3.68 11,363,511 1.19 29,930,693 3.52
Factoring 1,837,544 0.20 2,168,352 0.27 2,209,110 0.23 2,676,105 0.31
Others 5,720 - 10,317 - 365,154 0.04 322,678 0.04
Sub total 752,580,251 81.78 717,192,054 88.20 785,548,829 82.43 754,655,280 88.73
Foreign currency
Bills of exchange 2,288,964 0.25 2,839,380 0.35 2,288,964 0.24 2,839,380 0.33
Housing loans 728,261 0.08 706,160 0.09 728,261 0.08 706,160 0.08
Export loans 37,670,492 4.09 20,245,383 2.49 37,670,492 3.95 20,245,383 2.38
Import loans 10,660,352 1.16 6,491,432 0.80 10,660,352 1.12 6,491,432 0.76
Term loans 105,074,508 11.43 60,047,887 7.38 105,074,508 11.01 60,047,887 7.06
Overdraft 11,051,658 1.20 5,574,014 0.69 11,051,658 1.16 5,574,014 0.66
Others 67,165 0.01 10,117 - 67,165 0.01 10,117 -
Sub total 167,541,400 18.22 95,914,373 11.80 167,541,400 17.57 95,914,373 11.27
Gross loans & advances 920,121,651 100.00 813,106,427 100.00 953,090,229 100.00 850,569,653 100.00

25 LOANS AND ADVANCES CONTD.

25.1.4 By Industry
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 % Rs 000 % Rs 000 % Rs 000 %
Agriculture & related (Note

25.1.4.1) 78,121,388 8.49 81,614,848 10.04 81,605,434 8.56 85,593,249 10.06
Manufacturing 155,432,557 16.89 97,772,280 12.02 158,876,429 16.67 101,598,643 11.94
Tourism (Note 25.1.4.2) 91,246,731 9.92 72,678,610 8.94 92,098,943 9.66 73,870,156 8.68
Transport 8,689,715 0.94 10,082,774 1.24 11,865,566 1.24 13,586,221 1.60
Construction 115,873,254 12.59 111,911,734 13.76 116,167,205 12.19 112,704,490 13.25
Infrastructure 53,325,175 5.80 49,331,965 6.07 55,433,525 5.82 51,314,918 6.03
Traders 122,914,936 13.36 128,218,561 15.76 128,872,407 13.53 135,097,093 15.89
Financial & business services 70,419,624 7.66 69,974,326 8.61 65,806,997 6.90 68,264,453 8.03
Other services 89,380,208 9.71 72,011,672 8.86 96,842,719 10.16 81,284,851 9.56
Consumers 134,718,063 14.64 119,509,657 14.70 145,521,004 15.27 127,255,579 14.96
Gross loans & advances 920,121,651 100.00 813,106,427 100.00 953,090,229 100.00 850,569,653 100.00
25.1.4.1 $VSHUWKHUHTXLUHPHQWRI&HQWUDO%DQNRI6UL/DQND &%6/ DPLQLPXPRIRIWKHORDQVDQGDGYDQFHVVKDOOEHJUDQWHGWRWKH

agriculture sector. The Bank has complied with the said requirement as at 31st December 2022 and 31st December 2021. The
FRPSXWDWLRQPHWKRGXVHGWRGHULYHWKHLQGXVWU\ZLVHH[SRVXUHLQ1RWHDERYHLVGL΍HUHQWIURPWKHPHWKRGXVHGIRU&%6/
minimum lending requirement calculation to agriculture sector.
25.1.4.2 Increase in exposure to Tourism sector is mainly due to revaluation of foreign currency loans with the currency depreciation.

25.2 Impairment for Expected Credit Losses - Loans and Advances
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Stage 1
Balance as at 1st January 4,543,545 3,679,288 4,577,037 3,800,247
Net charge for the year (Note 12) 5,098,043 864,257 5,081,396 776,790
:ULWHR΍GXULQJWKH\HDU - - - -
2WKHUPRYHPHQWVLQFOXGLQJH[FKDQJHGL΍HUHQFHV 276,065 - 276,065 -
Balance as at 31st December 9,917,653 4,543,545 9,934,498 4,577,037
Stage 2
Net charge for the year (Note 12) 20,554,192 9,763,769 20,703,899 10,213,725
:ULWHR΍GXULQJWKH\HDU - - - -
2WKHUPRYHPHQWVLQFOXGLQJH[FKDQJHGL΍HUHQFHV 3,726,189 - 3,726,189 -
Stage 3
:ULWHR΍GXULQJWKH\HDU (1,618,428) (350,619) (1,813,890) (497,652)
Interest income accrued on impaired loans & advances (Note 7.1) (6,278,942) (3,009,971) (6,281,486) (3,027,412)
2WKHUPRYHPHQWVLQFOXGLQJH[FKDQJHGL΍HUHQFHV 7,997,095 2,442,854 7,999,848 2,448,990
Total
:ULWHR΍GXULQJWKH\HDU (1,618,428) (350,619) (1,813,890) (497,652)
Interest income accrued on impaired loans & advances (Note 7.1) (6,278,942) (3,009,971) (6,281,486) (3,027,412)
2WKHUPRYHPHQWVLQFOXGLQJH[FKDQJHGL΍HUHQFHV 11,999,349 2,442,854 12,002,102 2,448,990

25 LOANS AND ADVANCES CONTD.

25.3 Leasing
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Total lease rentals receivable 33,858,825 39,867,497 68,523,365 80,174,601

Unearned lease interest income (5,153,392) (5,793,469) (12,310,463) (14,360,478)
Gross lease receivable 28,705,433 34,074,028 56,212,902 65,814,123
Impairment for expected credit losses (2,306,144) (1,327,324) (4,959,047) (3,988,545)
Net lease receivable 26,399,289 32,746,704 51,253,855 61,825,578
Gross lease receivable within one year (Note 25.3.1) 10,387,418 11,566,507 22,554,351 24,120,465
Gross lease receivable after one year (Note 25.3.2) 18,318,015 22,507,521 33,658,551 41,693,658
28,705,433 34,074,028 56,212,902 65,814,123
25.3.1 Lease Receivable within One Year
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Total lease rentals receivable within one year from

reporting date 13,706,555 15,180,877 29,449,119 31,702,506
Gross lease receivable within one year (Note 25.3) 10,387,418 11,566,507 22,554,351 24,120,465
Impairment for expected credit losses (983,130) (508,473) (2,214,410) (1,613,439)
Net lease receivable within one year 9,404,288 11,058,034 20,339,941 22,507,026
25.3.2 Lease Receivable after One Year
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Total lease rentals receivable after one year from

reporting date 20,152,270 24,686,620 39,074,246 48,472,095
Gross lease receivable after one year (Note 25.3) 18,318,015 22,507,521 33,658,551 41,693,658
Impairment for expected credit losses (1,323,014) (818,851) (2,744,637) (2,375,106)
Net lease receivable after one year 16,995,001 21,688,670 30,913,914 39,318,552

26 DEBT AND OTHER INSTRUMENTS
ACCOUNTING POLICY
7KHDFFRXQWLQJSROLFLHVSHUWDLQLQJWRȴQDQFLDOLQVWUXPHQWVLQFOXGLQJȊ'HEWDQG2WKHUΖQVWUXPHQWVȋDUHJLYHQLQ1RWHWRWKH
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Treasury bills 14,471,345 70,165,746 19,933,211 71,065,987
Treasury bonds 194,207,566 135,757,622 194,207,566 135,757,622
Sri Lanka Development Bonds 43,848,618 65,782,968 43,848,618 65,782,968
Sri Lanka International Sovereign Bonds 35,146,255 18,976,248 35,146,255 18,976,248
Other Instruments
Debentures - quoted (Note 26.1) 5,453,188 5,355,316 5,453,188 5,355,316
/HDVHEDFNHGWUXVWFHUWLȴFDWHV 1RWH 2,328,255 2,921,442 2,328,255 2,921,442
Corporate Bond - LVL Energy Fund 818,529 777,776 818,529 777,776
Promissory Notes - Sri Lanka Telecom PLC 1,167,733 - 1,167,733 -
Gross debt & other instruments 297,441,489 299,737,118 302,903,355 300,637,359
Impairment for expected credit losses (Note 26.3) (18,665,693) (5,970,151) (18,665,693) (5,970,151)
Net debt & other instruments 278,775,796 293,766,967 284,237,662 294,667,208
26.1 Debentures - Quoted

Bank & Group

Amortised Amortised
Cost Cost
Rs 000 Rs 000
Name of the company

Banks, Finance & Insurance
Commercial Credit & Finance PLC 537,233 537,233
Commercial Leasing & Finance PLC - 513,833
LOLC Finance PLC 547,560 -
National Savings Bank 2,106,860 2,036,345
Nations Trust Bank PLC 335,455 335,455
People's Leasing & Finance PLC 1,050,770 1,049,771
Singer Finance PLC 108,584 108,584
4,686,462 4,581,221
Construction & Engineering

MTD Walkers PLC 254,784 254,784
254,784 254,784
Others
Ceylon Electricity Board 490,745 490,745
Kotagala Plantations PLC 21,197 28,566
511,942 519,311
5,453,188 5,355,316

26 DEBT AND OTHER INSTRUMENTS CONTD.
/HDVH%DFNHG7UXVW&HUWL΋FDWHV
Bank & Group

Amortised Amortised
Cost Cost
Rs 000 Rs 000
Associated Motor Finance Company PLC - 188,510

LB Finance PLC - 1,125,719
Trade Finance & Investment PLC - 47,844
Richard Pieris Finance Ltd - 35,329
Singer Finance PLC 80,134 248,140
Commercial Credit & Finance PLC 1,902,359 773,538
Sarvodaya Development Finance Ltd 345,762 502,362
2,328,255 2,921,442
26.3 Impairment for Expected Credit Losses - Debt and Other Instruments at Amortised Cost
Bank & Group
2022 2021
Rs 000 Rs 000
Stage 1
Balance as at 1st January 5,686,801 1,973,588
Net (reversal)/charge for the year (Note 12) (5,625,277) 3,713,213
2WKHUDGMXVWPHQWVLQFOXGLQJH[FKDQJHGL΍HUHQFHV - -
Balance as at 31st December 61,524 5,686,801
Stage 2
Balance as at 1st January - -
Net charge for the year (Note 12) 12,894,749 -
2WKHUDGMXVWPHQWVLQFOXGLQJH[FKDQJHGL΍HUHQFHV 5,433,439 -
Balance as at 31st December 18,328,188 -
Stage 3
Balance as at 1st January 283,350 290,879
Net reversal for the year (Note 12) (7,369) (7,529)
2WKHUDGMXVWPHQWVLQFOXGLQJH[FKDQJHGL΍HUHQFHV - -
Balance as at 31st December 275,981 283,350
Total
Net charge for the year (Note 12) 7,262,103 3,705,684
2WKHUDGMXVWPHQWVLQFOXGLQJH[FKDQJHGL΍HUHQFHV 5,433,439 -
Balance as at 31st December 18,665,693 5,970,151

26.4 Analysis of Debt and Other Instruments based on Exposure to Credit Risk
Bank

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Treasury bills 14,471,345 - - 14,471,345 70,165,746
Treasury bonds 194,207,566 - - 194,207,566 135,757,622
Sri Lanka Development Bonds - 43,848,618 - 43,848,618 65,782,968
Sri Lanka International Sovereign Bonds - 35,146,255 - 35,146,255 18,976,248
Other Instruments
Debentures - quoted 5,177,207 - 275,981 5,453,188 5,355,316
/HDVHEDFNHGWUXVWFHUWLȴFDWHV 2,328,255 - - 2,328,255 2,921,442
Corporate Bond - LVL Energy Fund 818,529 - - 818,529 777,776
Promissory Notes - Sri Lanka Telecom PLC 1,167,733 - - 1,167,733 -
218,170,635 78,994,873 275,981 297,441,489 299,737,118
Impairment for expected credit losses (61,524) (18,328,188) (275,981) (18,665,693) (5,970,151)
218,109,111 60,666,685 - 278,775,796 293,766,967
Group

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Treasury bills 19,933,211 - - 19,933,211 71,065,987
Treasury bonds 194,207,566 - - 194,207,566 135,757,622
Sri Lanka Development Bonds - 43,848,618 - 43,848,618 65,782,968
Sri Lanka International Sovereign Bonds - 35,146,255 - 35,146,255 18,976,248
Other Instruments
Debentures - quoted 5,177,207 - 275,981 5,453,188 5,355,316
/HDVHEDFNHGWUXVWFHUWLȴFDWHV 2,328,255 - - 2,328,255 2,921,442
Corporate Bond - LVL Energy Fund 818,529 - - 818,529 777,776
Promissory Notes - Sri Lanka Telecom PLC 1,167,733 - - 1,167,733 -
223,632,501 78,994,873 275,981 302,903,355 300,637,359
Impairment for expected credit losses (61,524) (18,328,188) (275,981) (18,665,693) (5,970,151)
223,570,977 60,666,685 - 284,237,662 294,667,208

26 DEBT AND OTHER INSTRUMENTS CONTD.

26.5 Analysis of Debt and Other Instruments
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Pledged as collateral 2,783,782 4,382,447 2,783,782 4,382,447
Unencumbered 275,992,014 289,384,520 281,453,880 290,284,761
278,775,796 293,766,967 284,237,662 294,667,208
By currency
Sri Lankan Rupee 218,109,111 214,671,019 223,570,977 215,571,260
Other currency 60,666,685 79,095,948 60,666,685 79,095,948
278,775,796 293,766,967 284,237,662 294,667,208
27 FINANCIAL ASSETS - FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
ACCOUNTING POLICY
7KHDFFRXQWLQJSROLFLHVSHUWDLQLQJWRȊ)LQDQFLDO$VVHWVȂ)DLU9DOXH7KURXJK2WKHU&RPSUHKHQVLYHΖQFRPHȋDUHJLYHQLQ1RWHV
3.4.3.5 & 3.4.3.6 to the Financial Statements.
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Treasury bills (Note 27.1) 3,635,885 5,634,390 3,635,885 5,634,390
Treasury bonds (Note 27.2) 23,733,302 32,052,148 23,733,302 32,052,148
Sri Lanka Development Bonds (Note 27.3) - 290,184 - 290,184
Sri Lanka International Sovereign Bonds (Note 27.4) 671,756 516,511 671,756 516,511
Equity Securities
Quoted equity security (Note 27.5) 4,671,146 4,451,151 4,671,146 4,451,151
Unquoted equity securities (Note 27.6) 60,841 59,761 60,897 59,817
32,772,930 43,004,145 32,772,986 43,004,201

27.1 Treasury Bills

Bank & Group

Rs 000 Rs 000
Amortised cost 3,634,862 5,638,129

Movement during the year
Gross change in market value 15,834 (9,009)
5HFODVVLȴFDWLRQWRSURȴWRUORVVGXHWRGHUHFRJQLWLRQ (11,072) (1,004)
Gain/(loss) from mark to market valuation as at 31st December 1,023 (3,739)
Market value 3,635,885 5,634,390
27.2 Treasury Bonds

Bank & Group

Rs 000 Rs 000
Amortised cost 24,006,458 33,295,879
(Loss)/gain from mark to market valuation as at 1st January (1,243,731) 14,670

Gross change in market value (3,841,589) (1,230,406)
5HFODVVLȴFDWLRQWRDPRUWLVHGFRVW 1RWH 4,787,611 -
5HFODVVLȴFDWLRQWRSURȴWRUORVVGXHWRGHUHFRJQLWLRQ 24,553 (27,995)
Loss from mark to market valuation as at 31st December (273,156) (1,243,731)
Market value 23,733,302 32,052,148

27 FINANCIAL ASSETS - FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME CONTD.

27.3 Sri Lanka Development Bonds
Bank & Group

Rs 000 Rs 000
Amortised cost - 290,176
Gain from mark to market valuation as at 1st January 8 -

Gross change in market value (8) 8
Gain from mark to market valuation as at 31st December - 8
Market value - 290,184
27.4 Sri Lanka International Sovereign Bonds

Bank & Group

Rs 000 Rs 000
Amortised cost 1,644,806 837,704
Loss from mark to market valuation as at 1st January (321,193) (178,083)

Gross change in market value (651,857) (141,796)
5HFODVVLȴFDWLRQWRSURȴWRUORVVGXHWRGHUHFRJQLWLRQ - (1,314)
Market value 671,756 516,511
27.5 Quoted Equity Security

Quoted equity security represents the investment in ordinary shares of LankaBangla Finance Ltd in Bangladesh.
Bank & Group
2022 2021
No. of No. of
Ordinary Ordinary
Shares Rs 000 Shares Rs 000
Cost of the investment as at 1st January 51,036,605 1,182,534 51,036,605 1,092,702

Exchange gain 970,472 89,832
Cost of the investment as at 31st December 51,036,605 2,153,006 51,036,605 1,182,534
Gain from mark to market valuation as at 1st January 3,268,617 2,436,272

Gross change in market value (3,213,837) 632,059
Exchange gain 2,463,360 200,286
Gain from mark to market valuation as at 31st December 2,518,140 3,268,617
Market value 4,671,146 4,451,151

27.6 Unquoted Equity Securities

No. of Cost of the Market No. of Cost of the Market
Shares Shares
Rs 000 Rs 000 Rs 000 Rs 000
Bank
Name of the company
LankaBangla Securities Ltd 293,485 108,675 2,396 293,485 59,690 1,316
Credit Information Bureau 1,700 170 170 1,700 170 170
SWIFT 23 9,035 30,517 23 9,035 30,517
LankaPay (Pvt) Ltd (formerly known as
Lanka Clear (Pvt) Ltd) 2,000,000 20,000 20,000 2,000,000 20,000 20,000
Lanka Financial Services Bureau Ltd 500,000 5,000 - 500,000 5,000 -
Lanka Rating Agency Ltd 9,449,707 15,516 7,758 9,449,707 15,516 7,758
158,396 60,841 109,411 59,761
Loss from mark to market valuation as

at 1st January (49,650) (74,455)
Gross change in market value - 38,580
Realised gain transferred to retained
earnings - (9,340)
([FKDQJHUDWHGL΍HUHQFHV (47,905) (4,435)
at 31st December (97,555) (49,650)
Group
Name of the company
LankaBangla Securities Ltd 293,485 108,675 2,396 293,485 59,690 1,316
Credit Information Bureau 1,800 226 226 1,800 226 226
SWIFT 23 9,035 30,517 23 9,035 30,517
LankaPay (Pvt) Ltd (formerly known as
Lanka Clear (Pvt) Ltd) 2,000,000 20,000 20,000 2,000,000 20,000 20,000
Lanka Financial Services Bureau Ltd 500,000 5,000 - 500,000 5,000 -
Lanka Rating Agency Ltd 9,949,707 15,516 7,758 9,449,707 15,516 7,758
158,452 60,897 109,467 59,817

at 1st January (49,650) (74,455)
Gross change in market value - 38,580
Realised gain transferred to retained
earnings - (9,340)
([FKDQJHUDWHGL΍HUHQFHV (47,905) (4,435)
at 31st December (97,555) (49,650)

27 FINANCIAL ASSETS - FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME CONTD.

27.7 Analysis of Financial Assets - Fair Value through Other Comprehensive Income
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Pledged as collateral - - - -
Unencumbered 32,772,930 43,004,145 32,772,986 43,004,201
32,772,930 43,004,145 32,772,986 43,004,201
By currency
Sri Lankan Rupee 27,397,115 37,714,466 27,397,171 37,714,522
Other currency 5,375,815 5,289,679 5,375,815 5,289,679
32,772,930 43,004,145 32,772,986 43,004,201
5HFODVVL΋FDWLRQRI'HEW3RUWIROLR
Considering the unprecedented changes in the macro-economic conditions, the Institute of Chartered Accountants of Sri Lanka (CA
6UL/DQND LVVXHGDȊ6WDWHPHQWRI$OWHUQDWLYH7UHDWPHQW 6R$7 RQ5HFODVVLȴFDWLRQRI'HEWSRUWIROLRȋZKLFKSURYLGHGDRQHR΍RSWLRQ
to the entities to reclassify their debt portfolios measured at Fair Value through Other Comprehensive Income (FVOCI) to Amortised
Cost (AC).
$SSO\LQJWKLV6R$7WKH%DQNUHFODVVLȴHGLWV)92&ΖWUHDVXU\ERQGSRUWIROLRDVDWVW$SULOWR$&$FFRUGLQJO\WKH%DQNUHYHUVHG
a cumulative mark to market loss of Rs 4.8 Bn recognised in other comprehensive income and adjusted against the carrying value
RIWUHDVXU\ERQGVDVDWWKHGDWHRIUHFODVVLȴFDWLRQ
7KHDPRUWLVHGFRVWRIWKHWUHDVXU\ERQGVUHFODVVLȴHGIURP)92&ΖDPRXQWHGWR5V%QDVDWVW'HFHPEHU7KHIDLUYDOXH
and the cumulative mark to market loss of these bonds would have been Rs 25.1 Bn and Rs 3.9 Bn respectively, had the Bank
continued to classify these bonds in the FVOCI portfolio. The additional mark to market loss that would have been recognised for
the year ended 31st December 2022 would have been Rs 2.7 Bn.
28 INVESTMENT IN SUBSIDIARIES
ACCOUNTING POLICY
Subsidiaries are entities that are controlled by the Bank. The Bank is presumed to control an investee when it is exposed or has
ULJKWVWRYDULDEOHUHWXUQVIURPLWVLQYROYHPHQWZLWKWKHLQYHVWHHDQGKDVWKHDELOLW\WRD΍HFWWKRVHUHWXUQVWKURXJKLWVSRZHU
over the investee. At each reporting date, the Bank reassesses whether it controls an investee, if facts and circumstances
indicate that there are changes to one or more elements of control mentioned above.
The Financial Statements of subsidiaries are fully consolidated from the date on which control is transferred to the Bank and
continue to be consolidated until the date when such control ceases. The Financial Statements of the Bank’s subsidiaries are
prepared for the same reporting year as per the Bank, using consistent accounting policies.
The cost of acquisition of a subsidiary is measured as the fair value of the consideration, including contingent consideration,
JLYHQRQWKHGDWHRIWUDQVIHURIWLWOH7KHDFTXLUHGLGHQWLȴDEOHDVVHWVOLDELOLWLHVDQGFRQWLQJHQWOLDELOLWLHVDUHPHDVXUHGDWWKHLU
fair values at the date of acquisition. Subsequent to the initial measurement, the Bank continues to recognise the investments in
subsidiaries at cost.

The total assets and liabilities of the subsidiaries as at the reporting date are included in the Consolidated Statement of Financial
3RVLWLRQ7KHWRWDOSURȴWRUORVVIRUWKH\HDURIWKHVXEVLGLDULHVLVLQFOXGHGLQWKH&RQVROLGDWHG6WDWHPHQWRI3URȴWRU/RVV7KH
non-controlling interest is presented in the Consolidated Statement of Financial Position within equity, separately from the
HTXLW\DWWULEXWDEOHWRWKHHTXLW\KROGHUVRIWKH%DQN1RQFRQWUROOLQJLQWHUHVWLQWKHSURȴWRUORVVRIWKH*URXSLVGLVFORVHGLQWKH
Consolidated Statement of Comprehensive Income. Total comprehensive income is allocated to the owners of the parent and to
WKHQRQFRQWUROOLQJLQWHUHVWHYHQLIWKLVUHVXOWVLQQRQFRQWUROOLQJLQWHUHVWKDYLQJDGHȴFLWEDODQFH
Intra-group balances and any income and expenses arising from intra-group transactions are eliminated when preparing the
Consolidated Financial Statements. Unrealised losses are eliminated in the same way as unrealised gains, except that they are
only eliminated to the extent that there is no evidence of impairment. When a subsidiary is acquired or sold during the year,
operating results of such subsidiary is included from the date of acquisition or to the date of disposal. Upon the loss of control,
the Group derecognise the assets and liabilities of the subsidiary, any non-controlling interest and the other components of
HTXLW\UHODWHGWRWKHVXEVLGLDU\$Q\VXUSOXVRUGHȴFLWDULVLQJRQWKHORVVRIFRQWUROLVUHFRJQLVHGLQWKH6WDWHPHQWRI&KDQJHVLQ
Equity.
If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date the control
is lost. Subsequently it is accounted for as an equity-accounted investee or in accordance with the Group’s accounting policy for
ȴQDQFLDOLQVWUXPHQWVGHSHQGLQJRQWKHOHYHORILQȵXHQFHUHWDLQHG
The Group did not acquire/dispose any subsidiaries during the year ended 31st December 2022.
7KHUHDUHQRVLJQLȴFDQWUHVWULFWLRQVRQWKHDELOLW\RIWKHVXEVLGLDULHVWRWUDQVIHUIXQGVWRWKH%DQNLQWKHIRUPRIFDVKGLYLGHQG
or repayment of loans and advances.
All subsidiaries of the Bank have been incorporated in Sri Lanka.
Bank

Subsidiary Principal Activities Ownership Cost Directors' Ownership Cost Directors'
Valuation Valuation
Rs 000 Rs 000 Rs 000 Rs 000
Sampath Centre Ltd Renting of

commercial property 713,481 5,612,451 674,163 5,651,419
SC Securities (Pvt) Ltd Stock broking 196,355 699,729 185,345 553,381
Siyapatha Finance PLC Granting lease, hire
purchase, factoring &
other loans facilities
& accepting deposits 2,674,439 6,567,175 2,346,095 6,226,093
Sampath Information Software
Technology Solutions development, renting
Ltd of IT equipment & IT
resource outsourcing
& consultancy 314,237 574,400 297,747 516,041
3,898,512 3,503,350
Subsidiaries are not quoted in the Colombo Stock Exchange except Siyapatha Finance PLC.
The Directors' valuation of investments in subsidiaries has been carried out on net asset basis as at 31st December 2022. Net asset
values of all subsidiary companies have exceeded the cost of investment as at 31st December 2022 and accordingly no provisions
have been recognised in the Financial Statements against investment in subsidiaries.

29 PROPERTY, PLANT AND EQUIPMENT
ACCOUNTING POLICY
Recognition
Property, plant and equipment are tangible items that are held for use in the production or supply of services, for rental to
others or for administrative purposes and are expected to be used during more than one period. The Group applies the
requirements of the Sri Lanka Accounting Standard - LKAS 16 (Property, Plant and Equipment) in accounting for these assets.
3URSHUW\SODQWDQGHTXLSPHQWDUHUHFRJQLVHGLILWLVSUREDEOHWKDWIXWXUHHFRQRPLFEHQHȴWVDVVRFLDWHGZLWKWKHDVVHWZLOOȵRZ
to the Group and the cost of the asset can be reliably measured.
Measurement
$QLWHPRISURSHUW\SODQWDQGHTXLSPHQWWKDWTXDOLȴHVIRUUHFRJQLWLRQDVDQDVVHWLVLQLWLDOO\PHDVXUHGDWLWVFRVW&RVWLQFOXGHV
expenditure that is directly attributable to the acquisition of the asset and cost incurred subsequently to add to, replace part
of an item of property, plant and equipment. The cost of self-constructed assets includes the cost of materials and direct
labour, any other costs directly attributable for bringing the asset to a working condition for its intended use and the costs of
dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to
the functionality of the related equipment is capitalised as a part of computer equipment. When parts of an item of property
RUHTXLSPHQWKDYHGL΍HUHQWXVHIXOOLYHVWKH\DUHDFFRXQWHGDVVHSDUDWHLWHPV PDMRUFRPSRQHQWV RISURSHUW\SODQWDQG
equipment.
Cost Model
The Group applies cost model to property, plant and equipment except for freehold land and buildings and records at cost of
purchase or construction together with any incidental expenses thereon less accumulated depreciation and any accumulated
impairment losses.
Revaluation Model
The Group applies the revaluation model to the entire class of freehold land and buildings. Such properties are carried
at a revalued amount, being their fair value at the date of revaluation less any subsequent accumulated depreciation
and subsequent accumulated impairment losses. Freehold land and buildings of the Group are revalued by independent
SURIHVVLRQDOYDOXHUVHYHU\WKUHH\HDUVRUPRUHIUHTXHQWO\LIWKHIDLUYDOXHVDUHVXEVWDQWLDOO\GL΍HUHQWIURPFDUU\LQJDPRXQWV
WRHQVXUHWKDWWKHFDUU\LQJDPRXQWVGRQRWGL΍HUIURPWKHIDLUYDOXHVDVDWWKHUHSRUWLQJGDWH7KH*URXSUHYDOXHGLWVIUHHKROG
land and buildings as at 31st December 2022, the details of which are given in Note 29.3.
On revaluation of an asset, any increase in the carrying amount is recognised in ‘Other Comprehensive Income’ and
accumulated in equity, under revaluation reserve or used to reverse a previous revaluation decrease relating to the same asset,
ZKLFKZDVFKDUJHGWRWKH6WDWHPHQWRI3URȴWRU/RVVΖQWKLVFLUFXPVWDQFHWKHLQFUHDVHLVUHFRJQLVHGDVLQFRPHWRWKHH[WHQW
RIWKHSUHYLRXVZULWHGRZQ$Q\GHFUHDVHLQWKHFDUU\LQJDPRXQWLVUHFRJQLVHGDVDQH[SHQVHLQWKH6WDWHPHQWRI3URȴWRU/RVV
or debited to the other comprehensive income to the extent of any credit balance existing in the revaluation reserve in respect
of that asset. The decrease recognised in other comprehensive income reduces the amount accumulated in equity under
revaluation reserves. Any balance remaining in the revaluation reserve in respect of an asset is transferred directly to retained
earnings on retirement or disposal of the asset.

Subsequent Cost
The subsequent cost of replacing a component of an item of property, plant and equipment is recognised in the carrying
DPRXQWRIWKHLWHPLILWLVSUREDEOHWKDWWKHIXWXUHHFRQRPLFEHQHȴWVHPERGLHGZLWKLQWKDWSDUWZLOOȵRZWRWKH*URXSDQGLWV
cost can be reliably measured. The costs of day to day servicing of property, plant and equipment are charged to the Statement
RI3URȴWRU/RVVDVLQFXUUHG
Derecognition
The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future economic
EHQHȴWVDUHH[SHFWHGIURPLWVXVH7KHJDLQRUORVVDULVLQJIURPGHUHFRJQLWLRQRIDQLWHPRISURSHUW\SODQWDQGHTXLSPHQW
LVLQFOXGHGLQWKH6WDWHPHQWRI3URȴWRU/RVVZKHQWKHLWHPLVGHUHFRJQLVHG:KHQUHSODFHPHQWFRVWVDUHUHFRJQLVHGLQ
the carrying amount of an item of property, plant and equipment, the remaining carrying amount of the replaced part is
derecognised. Major inspection costs are capitalised. At each such capitalisation, the remaining carrying amount of the previous
cost of inspection is derecognised.
Capital Work in Progress

These are expenses of capital nature directly incurred in the construction of buildings, major plant, machinery and system
development, awaiting capitalisation. Capital work in progress would be transferred to the relevant asset when it is available
for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by
management. Capital work-in-progress is stated at cost less any accumulated impairment losses.
Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset have been
capitalised as part of the cost of the asset in accordance with Sri Lanka Accounting Standard - LKAS 23 (Borrowing Costs). A
qualifying asset is an asset which takes substantial period of time to get ready for its intended use or sale. Capitalisation of
borrowing costs ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use are
FRPSOHWHG2WKHUERUURZLQJFRVWVDUHUHFRJQLVHGLQSURȴWRUORVVLQWKHSHULRGLQZKLFKWKH\DUHLQFXUUHG7KH*URXSKDVQRW
capitalised any borrowing cost under property, plant and equipment during the year.
Rates of depreciation for each category of property, plant and equipment are given in Note 14, 'Depreciation and Amortisation
Expenses'.

29 PROPERTY, PLANT AND EQUIPMENT CONTD.

29.1 Bank
Freehold Improvements Computer 2΍FH Fixtures & Motor 2022 2021

Land to Lease Hold Equipment Equipment Fittings Vehicles
Total Total
& Buildings Properties
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Cost/Valuation
Balance as at 1st January 5,904,098 1,241,721 4,637,699 2,396,814 382,616 196,792 14,759,740 14,328,397
Additions & improvements 49,062 331,171 189,421 279,707 37,937 - 887,298 466,451
Disposals during the year - - (2,107) (9,269) (40) - (11,416) (34,944)
:ULWWHQR΍GXULQJWKH\HDU - - - - - - - (164)
Revaluation adjustment on accumulated
depreciation (138,892) - - - - - (138,892) -
Revaluation surplus 978,718 - - - - - 978,718 -
Transfers/adjustments - (448) (1,993) 293 408 - (1,740) -
Cost/valuation as at 31st December 6,792,986 1,572,444 4,823,020 2,667,545 420,921 196,792 16,473,708 14,759,740
Accumulated Depreciation
Balance as at 1st January 92,176 1,177,086 3,235,403 1,958,796 302,141 176,215 6,941,817 6,202,112
Charge for the year (Note 14) 46,716 58,775 471,144 146,242 39,607 9,394 771,878 767,104
Disposals during the year - - (2,005) (9,107) (40) - (11,152) (27,235)
:ULWWHQR΍GXULQJWKH\HDU - - - - - - - (164)
Revaluation adjustment on accumulated
depreciation (138,892) - - - - - (138,892) -
Transfers/adjustments - - - (1) - (467) (468) -
Accumulated depreciation as at 31st December - 1,235,861 3,704,542 2,095,930 341,708 185,142 7,563,183 6,941,817
Net book value as at 31st December 2022 6,792,986 336,583 1,118,478 571,615 79,213 11,650 8,910,525
Net book value as at 31st December 2021 5,811,922 64,635 1,402,296 438,018 80,475 20,577 7,817,923
29.1(a) The carrying amount of Bank's revalued freehold land and buildings, if they were carried at cost less accumulated depreciation,
would be as follows:
Cost Accumulated Cost Less Cost Accumulated Cost Less

Depreciation Accumulated Depreciation Accumulated
Depreciation Depreciation
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Freehold lands 906,309 - 906,309 906,309 - 906,309

Freehold buildings 1,274,244 343,687 930,557 1,225,182 312,715 912,467
Total 2,180,553 343,687 1,836,866 2,131,491 312,715 1,818,776

29.2 Group
Freehold Improvements Computer 2΍FH Fixtures & Motor Capital 2022 2021
Land to Lease Hold Equipment Equipment Fittings Vehicles Work-in Total Total
& Buildings Properties Progress
Cost/Valuation
Balance as at 1st January 11,830,494 1,241,721 6,383,826 3,051,822 744,361 210,471 1,707,492 25,170,187 23,840,752
Additions &
improvements 53,143 331,171 395,702 317,053 61,375 - 922,001 2,080,445 1,679,810
Disposals during the year - - (123,352) (10,364) (3,972) - - (137,688) (342,210)
:ULWWHQR΍GXULQJWKH\HDU - - (199) - - - - (199) (8,165)
Revaluation adjustment
on accumulated
depreciation (445,483) - - - - - - (445,483) -
Revaluation surplus 1,855,410 - - - - - - 1,855,410 -
Transfers/adjustments 1,473,037 (448) 111,727 134,781 377,197 - (2,104,513) (8,219) -
Cost/valuation as at
31st December 14,766,601 1,572,444 6,767,704 3,493,292 1,178,961 210,471 524,980 28,514,453 25,170,187
Accumulated
Depreciation
Balance as at 1st January 293,591 1,177,086 4,576,104 2,098,977 502,397 184,516 - 8,832,671 7,949,337
Charge for the year
(Note 14) 151,892 58,775 676,720 193,722 104,984 10,291 - 1,196,384 1,190,237
Disposals during the year - - (122,920) (10,077) (3,006) - - (136,003) (298,738)
:ULWWHQR΍GXULQJWKH\HDU - - (60) - - - - (60) (8,165)
Revaluation adjustment
on accumulated
depreciation (445,483) - - - - - - (445,483) -
Transfers/adjustments - - - (1) - (467) - (468) -
Accumulated
depreciation as at
31st December - 1,235,861 5,129,844 2,282,621 604,375 194,340 - 9,447,041 8,832,671
Net book value as at
31st December 2022 14,766,601 336,583 1,637,860 1,210,671 574,586 16,131 524,980 19,067,412
Net book value as at
31st December 2021 11,536,903 64,635 1,807,722 952,845 241,964 25,955 1,707,492 16,337,516
29.2(a) The carrying amount of Group's revalued freehold land and buildings, if they were carried at cost less accumulated depreciation,
would be as follows:

Cost Accumulated Cost Less Cost Accumulated Cost Less
Depreciation Accumulated Depreciation Accumulated
Depreciation Depreciation
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Freehold lands 1,245,388 - 1,245,388 1,245,388 - 1,245,388

Freehold buildings 4,806,708 711,621 4,095,087 3,280,528 592,843 2,687,685
Total 6,052,096 711,621 5,340,475 4,525,916 592,843 3,933,073

29.3 Details of Bank's & Group's Land and Buildings Stated at Valuation
Valuer/Location Date of Method of Net Book Revaluation Revaluation Revaluation Gain/

Valuation Valuation Value before Amount Gain/(Loss) (Loss) Recognised
Revaluation in
Land Building Land Building Land Building Total 3UR΋WRU OCI
Loss
Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn
Bank
Valuer - Mr C Wellappili
No. 05, Wakwella Road, Galle 31.12.2022 Income basis 104.88 36.98 113.62 49.37 8.74 12.39 21.13 - 21.13
No. 42, Anguruwatota Road,
Horana 31.12.2022 Income basis 51.87 - 62.25 - 10.38 - 10.38 - 10.38
No. 81 & 81 A, High Level Road,
Maharagama 31.12.2022 Income basis 80.76 39.05 94.22 66.58 13.46 27.53 40.99 - 40.99
Valuer - Mr G M Gamage
No. 69, Main Street, Deniyaya 31.12.2022 Income basis 35.04 25.20 40.29 32.98 5.25 7.78 13.03 - 13.03
No. 117, Hapugahawalawatta,
Ihalagama Road, Deniyaya 31.12.2022 Income basis 1.50 - 3.50 - 2.00 - 2.00 - 2.00
No. 05, Hakmana Road, Matara 31.12.2022 Income basis 185.64 39.39 357.00 68.00 171.36 28.61 199.97 - 199.97
No. 25-27, Main Street,
Tissamaharama 31.12.2022 Income basis 27.75 38.25 28.86 51.13 1.11 12.88 13.99 - 13.99
Valuer - Mr Sarath Fernando

No. 9, 9/1, Giriulla Road, Alawwa 31.12.2022 Income basis 24.70 22.36 31.00 29.00 6.30 6.64 12.94 - 12.94
No. 150, Colombo Road,
Gampaha 31.12.2022 Income basis 68.00 39.31 70.00 52.00 2.00 12.69 14.69 - 14.69
No. 312/A, Galle Road, Kalutara 31.12.2022 Income basis 82.00 65.92 85.00 73.00 3.00 7.08 10.08 - 10.08
No. 187, Madawala Road,
Katugastota 31.12.2022 Income basis 81.00 59.87 82.00 67.00 1.00 7.13 8.13 - 8.13
No. 31 & 33, Negombo Road,
Kurunegala 31.12.2022 Income basis 187.00 96.22 192.00 116.00 5.00 19.78 24.78 - 24.78
No. 475, Elvitigala Mawatha,
Narahenpita 31.12.2022 Income basis 104.00 59.58 110.00 69.00 6.00 9.42 15.42 - 15.42
No. 408, Main Street, Negombo 31.12.2022 Income basis 124.00 132.32 133.00 135.00 9.00 2.68 11.68 - 11.68
No. 371, Old Moor St,
Masangasweediya,
Colombo 12 31.12.2022 Income basis 192.00 54.73 207.00 60.00 15.00 5.27 20.27 - 20.27
No. 373 A, Galle Road, Panadura 31.12.2022 Income basis 75.00 46.62 80.00 54.00 5.00 7.38 12.38 - 12.38
No. 85/87, Panchikawatta Road,
Colombo 10 31.12.2022 Income basis 78.00 66.61 80.00 82.00 2.00 15.39 17.39 - 17.39
No. 180(part), Bodiraja Mawatha,
Pettah 31.12.2022 Income basis - 92.60 - 108.80 - 16.20 16.20 - 16.20
No. 61A, Moratuwa Road,
Piliyandala 31.12.2022 Income basis 75.00 38.93 90.00 50.00 15.00 11.07 26.07 - 26.07
No. 1/87, Victoria Range, Digana,
Kandy 31.12.2022 Market Comparable Basis 10.00 10.73 11.00 13.20 1.00 2.47 3.47 - 3.47
No. 256/1, Negombo Road,
Wattala 31.12.2022 Income basis 106.00 39.61 108.00 47.00 2.00 7.39 9.39 - 9.39
No. 591, Galle Road, Wellawatta 31.12.2022 Income basis 139.00 52.71 140.00 62.00 1.00 9.29 10.29 - 10.29

Valuer/Location Date of Method of Net Book Revaluation Revaluation Revaluation Gain/

Valuation Valuation Value before Amount Gain/(Loss) (Loss) Recognised
Revaluation in
Land Building Land Building Land Building Total 3UR΋WRU OCI
Loss
Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn
Valuer - Mr G W G
Abeygunawaradana
"Nuwarawewakele", Maithreepala
Senanayake Mw,
Anuradhapura 31.12.2022 Income basis 175.74 58.46 187.86 60.84 12.12 2.38 14.50 0.80 13.70
No. 1022, Maradana Road,
Borella 31.12.2022 Income basis 296.16 87.30 318.37 90.38 22.21 3.08 25.29 - 25.29
No. 103, Dharmapala Mawatha,
Hunupitiya, Colombo 7 31.12.2022 Market Comparable Basis 1,731.30 62.71 1,973.55 72.68 242.25 9.97 252.22 - 252.22
No. 29, Cross Street, Kandy 31.12.2022 Income basis 282.70 84.23 346.95 114.30 64.25 30.07 94.32 - 94.32
No. 261, Galle Road, Ratmalana 31.12.2022 Income basis 49.00 20.42 73.58 48.67 24.58 28.25 52.83 - 52.83
Valuer - Mr A A M Fathihu
No. 202, Main Road, Attidiya 31.12.2022 Income basis 50.76 25.35 57.10 43.90 6.34 18.55 24.89 - 24.89
Total - Bank 4,418.80 1,395.46 5,076.15 1,716.83 657.35 321.37 978.72 0.80 977.92
Subsidiaries
Sampath Centre - No. 110, Sir
James Peiris Mawatha, Colombo 2 31.12.2022 Income basis 2,677.50 2,650.83 2,841.60 3,306.82 164.10 655.99 820.09 - 820.09
Siyapatha Finance PLC - No. 111,
Dudley Senanayake Mawatha,
Colombo 8 31.12.2022 Income basis 367.91 1,400.69 424.51 1,400.69 56.60 - 56.60 - 56.60
Total - Group 7,464.21 5,446.98 8,342.26 6,424.34 878.05 977.36 1,855.41 0.80 1,854.61

29.4 Freehold Land and Buildings
Location Land Buildings No. of Cost/ Cost/ Total Accumulated 2022 As a % 2021
Extent Buildings Revaluation Revaluation of Value Depreciation Net Book of Total Net Book
in the of Land Building Value NBV Value
Location
Perches Sq.ft Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Bank
1 Alawwa 20.7 8,190 1 31,000 29,000 60,000 - 60,000 47,907
No. 9, 9/1, Giriulla Road, Alawwa
2 Anuradhapura 40.4 8,929 1 187,860 60,840 248,700 - 248,700 236,287
"Nuwarawewakele", Maithreepala
Senanayake Mw, Anuradhapura
3 Attidiya 12.7 6,064 1 57,100 43,900 101,000 - 101,000 76,787
No. 202, Main Road, Attidiya
4 Borella 24.7 15,876 1 318,372 90,378 408,750 - 408,750 385,881
No. 1022, Maradana Road, Borella
5 Deniyaya 17.5 5,325 1 40,296 32,978 73,274 - 73,274 60,921
No. 69, Main Street, Deniyaya
6 Deniyaya 40.0 BareLand - 3,500 - 3,500 - 3,500 1,500
No. 117, Hapugahawalawatta,
Ihalagama Road, Deniyaya
7 Dharmapala Mawatha 119.4 7,300 1 1,973,550 72,675 2,046,225 - 2,046,225 1,795,899
No. 103, Dharmapala Mawatha,
Hunupitya, Colombo 7
8 Galle 17.5 5,400 1 113,620 49,367 162,987 - 162,987 137,227
No. 05, Wakwella Road, Galle
9 Gampaha 25.0 5,680 1 70,000 52,000 122,000 - 122,000 107,897
No. 150, Colombo Road, Gampaha
10 Horana 20.8 BareLand - 62,250 - 62,250 - 62,250 51,875
No. 42, Anguruwatota Road,
Horana
11 Kalutara 30.0 8,715 1 85,000 73,000 158,000 - 158,000 149,800
No. 312/A, Galle Road, Kalutara
12 Kandy Metro 25.7 17,398 1 346,950 114,300 461,250 - 461,250 370,287
No. 29, Cross Street, Kandy
13 Katugastota 23.2 7,811 1 82,000 67,000 149,000 - 149,000 142,576
No. 187, Madawala Road,
Katugastota
14 Kurunegala 37.4 16,202 1 192,000 116,000 308,000 - 308,000 283,257
No. 31 & 33, Negombo Road,
Kurunegala
15 Maharagama 13.5 6,310 1 94,220 66,580 160,800 - 160,800 121,130
No. 81 & 81 A, High Level Road,
Maharagama
16 Matara 47.6 11,141 2 357,000 68,000 425,000 - 425,000 226,524
No. 05, Hakmana Road, Matara
17 Narahenpita 18.9 9,600 1 110,000 69,000 179,000 - 179,000 165,381
No. 475, Elvitigala Mawatha,
Narahenpita

Location Land Buildings No. of Cost/ Cost/ Total Accumulated 2022 As a % 2021
Extent Buildings Revaluation Revaluation of Value Depreciation Net Book of Total Net Book
in the of Land Building Value NBV Value
Location
Perches Sq.ft Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
18 Negombo 41.5 15,088 1 133,000 135,000 268,000 - 268,000 259,887

No. 408, Main Street, Negombo
19 Old Moor Street 24.0 10,180 1 207,000 60,000 267,000 - 267,000 211,995
No. 371, Old Moor St,
Masangasweediya, Colombo 12
20 Panadura 27.3 6,020 1 80,000 54,000 134,000 - 134,000 123,079
No. 373 A, Galle Road, Panadura
21 Panchikawatta 9.8 14,680 1 80,000 82,000 162,000 - 162,000 147,067
No. 85/87, Panchikawatta Road,
Colombo 10
22 Pettah - 5,124 1 - 108,800 108,800 - 108,800 96,768
No. 180 (part), Bodiraja Mawatha,
Pettah
23 Piliyandala 37.5 8,138 1 90,000 50,000 140,000 - 140,000 115,144
No. 61A, Moratuwa Road,
Piliyandala
24 Ratmalana 10.9 5,520 1 73,575 48,675 122,250 - 122,250 68,797
No. 261, Galle Road, Ratmalana
25 Tissamaharama 22.2 10,815 1 28,860 51,140 80,000 - 80,000 67,024
No. 25-27, Main Street,
Tissamaharama
26 Victoria Range 20.1 2,320 1 11,000 13,200 24,200 - 24,200 21,084
No. 1/87, Victoria Range, Digana,
Kandy
27 Wattala 42.5 5,314 1 108,000 47,000 155,000 - 155,000 146,735
No. 256/1, Negombo Road, Wattala
28 Wellawatte 21.5 7,776 1 140,000 62,000 202,000 - 202,000 193,206
No. 591, Galle Road, Wellawatta
Total - Bank 792.3 230,916 27 5,076,153 1,716,833 6,792,986 - 6,792,986 5,811,922
Subsidiaries
Sampath Centre Ltd
29 6ODYH,VODQG 153.6 318,264 1 2,841,600 3,306,823 6,148,423 - 6,148,423 5,357,080
No. 110, Sir James Peiris Mawatha,
Colombo 2

30 Borella 29.1 61,370 1 424,500 1,400,692 1,825,192 - 1,825,192 367,901
No. 111, Dudley Senanayake
Mawatha, Colombo 8
Total - Group 975.0 610,550 29 8,342,253 6,424,348 14,766,601 - 14,766,601 11,536,903

29.5(a) Improvements to Leasehold Properties

Bank & Group

Cost of Accumulated Net Book Net Book
Buildings Depreciation Value Value
Rs 000 Rs 000 Rs 000 Rs 000
01 - 05 years 307,996 260,041 47,955 16,748

06 - 10 years 887,464 638,858 248,606 35,955
Above 10 years 376,984 336,962 40,022 11,932
Total 1,572,444 1,235,861 336,583 64,635
29.5(b) Fully Depreciated Property, Plant and Equipment

A class-wise analysis of the initial cost of fully depreciated property, plant and equipment which are still in use as at reporting date
is as follows.
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Asset class
Improvements to leasehold properties 1,135,103 1,086,051 1,135,103 1,086,051
Computer equipment & software 4,437,727 3,641,524 5,012,010 3,965,876
2ɝFHHTXLSPHQW 1,589,715 1,435,174 1,641,239 1,468,220
)L[WXUHV ȴWWLQJV 228,672 172,739 380,342 301,434
Motor vehicles 139,563 109,844 147,267 115,257
Total 7,530,780 6,445,332 8,315,961 6,936,838
29.5(c) Temporarily Idle Property, Plant and Equipment - Bank & Group
The Bank holds Horana land worth of Rs 62.25 Mn with the intention of constructing a branch. The Bank does not intend to
construct a branch in the bare land located in Deniyaya as it was severely earth slipped. Any future construction on this land would
EHVXEMHFWHGWR1%52 1DWLRQDO%XLOGLQJ5HVHDUFK2UJDQLVDWLRQ FHUWLȴFDWLRQ
29.5(d) Property, Plant and Equipment Retired from Active Use - Bank & Group
There were no property, plant and equipment retired from active use as at 31st December 2022 (2021: NIL).
29.5(e) Title Restriction on Property, Plant and Equipment - Bank & Group
There were no restriction on the title of property, plant and equipment as at 31st December 2022 (2021: NIL).
29.5(f) Property, Plant and Equipment Pledged as Security against Liabilities - Bank & Group
There were no items of property, plant and equipment pledged as securities against liabilities (2021: NIL).
29.5(g) Compensation from Third Parties for Items of Property, Plant and Equipment - Bank & Group
There were no compensation received during the year from third parties for items of property, plant and equipment that were
impaired, lost or given up (2021: NIL).

30 INTANGIBLE ASSETS
ACCOUNTING POLICY
Recognition
$QLQWDQJLEOHDVVHWLVDQLGHQWLȴDEOHQRQPRQHWDU\DVVHWZLWKRXWSK\VLFDOVXEVWDQFHKHOGIRUXVHLQWKHSURGXFWLRQRUVXSSO\
of goods or services, for rental to others or for administrative purposes. An intangible asset is recognised if it is probable that
WKHIXWXUHHFRQRPLFEHQHȴWVWKDWDUHDWWULEXWDEOHWRWKHDVVHWZLOOȵRZWRWKHHQWLW\DQGWKHFRVWRIWKHDVVHWFDQEHPHDVXUHG
reliably. An intangible asset is initially measured at cost. Expenditure incurred on an intangible item that was initially recognised
as an expense by the Group in previous annual Financial Statements or interim Financial Statements are not recognised as part
of the cost of an intangible asset at a later date.
Computer Software
Cost of purchased licenses and all computer software costs incurred, licensed for use by the Group, which are not integrally
UHODWHGWRDVVRFLDWHGKDUGZDUHZKLFKFDQEHFOHDUO\LGHQWLȴHGUHOLDEO\PHDVXUHGDQGLWȇVSUREDEOHWKDWWKH\ZLOOOHDGWRIXWXUH
HFRQRPLFEHQHȴWVDUHLQFOXGHGLQWKH6WDWHPHQWRI)LQDQFLDO3RVLWLRQXQGHUWKHFDWHJRU\ȆΖQWDQJLEOH$VVHWVȇDQGFDUULHGDWFRVW
less accumulated amortisation and any accumulated impairment losses.
Subsequent Expenditure
Expenditure incurred on software is capitalised only when it is probable that this expenditure will enable the asset to
JHQHUDWHIXWXUHHFRQRPLFEHQHȴWVLQH[FHVVRILWVRULJLQDOO\DVVHVVHGVWDQGDUGRISHUIRUPDQFHDQGWKLVH[SHQGLWXUHFDQEH
measured and attributed to the asset reliably. All other expenditure is expensed as incurred. Goodwill is measured at cost less
accumulated impairment losses.
Derecognition of Intangible Assets

7KHFDUU\LQJDPRXQWRIDQLWHPRILQWDQJLEOHDVVHWLVGHUHFRJQLVHGRQGLVSRVDORUZKHQQRIXWXUHHFRQRPLFEHQHȴWVDUH
expected from its use. The gain or loss arising from derecognition of an item of intangible asset is included in the Statement of
3URȴWRU/RVVZKHQWKHLWHPLVGHUHFRJQLVHG
There were no restrictions on the title of the intangible assets as at the reporting date. Further, there were no items pledged as
securities for liabilities.
Intangible assets of the Bank as at 31st December 2022 only include computer software and cost of licenses. Rates of
amortisation for computer software and licenses are given in Note 14, 'Depreciation and Amortisation Expenses'.
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Cost
Additions & improvements 309,934 181,605 321,964 191,750
'LVSRVDOZULWHR΍GXULQJWKH\HDU - - - -
Transfers/adjustments 960 - 7,438 -
Cost as at 31st December 3,512,494 3,201,600 3,753,036 3,423,634
Accumulated Amortisation
Charge for the year (Note 14) 279,017 390,304 297,980 415,758
'LVSRVDOZULWHR΍GXULQJWKH\HDU - - - -
Transfers/adjustments (1,238) - (1,238) -
Accumulated amortisation as at 31st December 2,934,463 2,656,684 3,152,695 2,855,953
Net book value as at 31st December 578,031 544,916 600,341 567,681

31 RIGHT-OF-USE ASSETS
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the year.
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Cost
Additions & improvements 1,769,040 1,282,115 1,136,377 1,011,474
([SLUDWLRQVZULWHR΍GXULQJWKH\HDU (1,273,590) - (654,949) -
Cost as at 31st December 7,771,140 7,275,690 6,079,768 5,598,340
Accumulated Amortisation
Charge for the year (Note 14) 1,494,073 1,296,963 902,397 885,345
([SLUDWLRQVZULWHR΍GXULQJWKH\HDU (1,273,591) - (654,949) -
Accumulated amortisation as at 31st December 4,230,854 4,010,372 2,813,998 2,566,550
Net book value as at 31st December 3,540,286 3,265,318 3,265,770 3,031,790
31.1 Lease Liability

Set out below are the carrying amounts of lease liabilities (included under "Other Liabilities" in Note 40 ) and the movements during
the year.
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000

Additions 1,769,040 1,282,115 1,136,377 1,011,474
Accretion of interest (Note 7.2) 423,576 183,835 353,407 246,386
Payments (1,627,383) (1,518,974) (1,074,798) (975,004)
Balance as at 31st December (Note 40) 4,291,844 3,726,611 3,908,634 3,493,648
31.1.1 Maturity Analysis of Lease Liability
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Less than 1 year 2,352,370 1,856,649 1,768,672 1,446,333

1 to 5 years 1,605,762 1,540,128 1,768,829 1,643,037
More than 5 years 333,712 329,834 371,133 404,278
4,291,844 3,726,611 3,908,634 3,493,648

31.2 Sensitivity of Right-of-Use Assets/Lease Liability to Key Assumptions

31.2.1 Sensitivity to Discount Rates
LQFUHDVH GHFUHDVH LQGLVFRXQWUDWHDVDWVW'HFHPEHUZRXOGKDYH GHFUHDVHG LQFUHDVHGWKHOHDVHOLDELOLW\E\
approximately Rs 87 Mn with a similar (decrease)/increase in the right-of-use asset. Had the Bank increased/(decreased) the
GLVFRXQWUDWHE\WKH%DQN VSURȴWEHIRUHWD[IRUWKH\HDUZRXOGKDYH GHFUHDVHG LQFUHDVHGE\DSSUR[LPDWHO\5V0Q
31.2.2 Sensitivity to Lease Term

Had the lease term of all existing lease agreements been increased by further one year, lease liability of the Bank as at 31st
December 2022 would have increased by Rs 1,768 Mn with a similar increase in the right-of-use assets. Further, this would reduce
WKHSURȴWEHIRUHWD[RIWKH%DQNE\5V0Q
7KHDERYHVHQVLWLYLWLHVDUHJLYHQRQO\IRUWKH%DQNVLQFHWKHVXEVLGLDU\OHDVHVGRQRWKDYHDPDWHULDOLPSDFWRQWKHȴQDQFLDO
statements of the Group.
32 DEFERRED TAX (ASSETS)/LIABILITIES
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Recognised under assets (21,734,244) (6,157,958) (21,992,147) (6,242,982)

Recognised under liabilities - - 1,465,662 979,815
(21,734,244) (6,157,958) (20,526,485) (5,263,167)
1HWGHIHUUHGWD[ DVVHWV OLDELOLWLHVRIRQHHQWLW\FDQQRWEHVHWR΍DJDLQVWDQRWKHUHQWLW\ VOLDELOLWLHV DVVHWV VLQFHWKHUHLVQROHJDOO\

HQIRUFHDEOHULJKWWRVHWR΍7KHUHIRUHQHWGHIHUUHGWD[DVVHWVDQGOLDELOLWLHVRIGL΍HUHQWHQWLWLHVDUHVHSDUDWHO\UHFRJQLVHGLQWKH
Statement of Financial Position.

32 DEFERRED TAX (ASSETS)/LIABILITIES CONTD.
322
32.1 Movement in Deferred Tax (Assets)/Liabilities

Bank
Accelerated Depreciation Provision Revaluation Retirement Gain/(Loss) Others Total

for Tax Purposes for Loan on Land & %HQH΋W on FVOCI
Losses Buildings Obligation Assets
Property, Leased
Plant & Assets
Equipment
ABOUT
Balance as at 1st January 2021 490,057 496,604 (5,449,699) 1,164,180 (1,924,047) 714,855 (125,990) (4,634,040)

3UR΋WRUORVV 1RWH
Due to rate reduction (Note 16.3.1) (70,008) (70,943) 778,528 - 69,070 - 17,999 724,646
'XHWRFKDQJHLQWHPSRUDU\GL΍HUHQFHV (36,766) (238,811) (2,843,501) - 358,617 - 5,559 (2,754,902)
Due to rate reduction (Note 16.3.1) - - - (166,311) 205,792 (102,123) - (62,642)
'XHWRFKDQJHLQWHPSRUDU\GL΍HUHQFHV - - - - 673,017 (101,795) - 571,222
Transfer to the current tax liability - tax on realised gain from
derecognition of equity instrument at FVOCI - - - - - (2,242) - (2,242)
Balance as at 31st December 2021 383,283 186,850 (7,514,672) 997,869 (617,552) 508,696 (102,432) (6,157,958)
Balance as at 1st January 2022 383,283 186,850 (7,514,672) 997,869 (617,552) 508,696 (102,432) (6,157,958)
3UR΋WRUORVV 1RWH
Due to rate increase on opening deferred tax (asset)/liability
(Note 16.3.2) 95,821 46,712 (1,878,669) - (13,951) - (25,608) (1,775,695)
Due to change in deductible loan loss provision method (Note 16.5) - - (2,618,024) - - - - (2,618,024)
'XHWRFKDQJHLQWHPSRUDU\GL΍HUHQFHV 23,931 (114,715) (12,042,682) - (125,485) - (121,559) (12,380,510)

Due to rate increase on opening deferred tax (asset)/liability
(Note 16.3.2) - - - 249,467 (140,436) 127,174 - 236,205
'XHWRFKDQJHLQWHPSRUDU\GL΍HUHQFHV - - - 293,374 343,854 324,510 - 961,738
Balance as at 31st December 2022 503,035 118,847 (24,054,047) 1,540,710 (553,570) 960,380 (249,599) (21,734,244)
STRATEGY REPORT
Group
Accelerated Depreciation Provision Revaluation Retirement Tax Losses Gain/(Loss) Others Total
for Tax Purposes for Loan on Land & %HQH΋W on Leasing on FVOCI
Losses Buildings Obligation Operation Assets
Property, Leased
Plant & Assets
Equipment
AND ANALYSIS
Balance as at 1st January 2021 531,739 700,527 (5,291,140) 2,318,708 (1,956,824) (17,926) 714,855 (168,133) (3,168,194)
3UR΋WRUORVV 1RWH
Due to rate reduction (Note 16.3.1) (75,963) (100,075) 755,877 - 71,629 2,561 - 24,019 678,048
'XHWRFKDQJHLQWHPSRUDU\GL΍HUHQFHV (42,720) (322,466) (3,097,031) - 354,433 15,365 - (24,410) (3,116,829)
Due to rate reduction (Note 16.3.1) - - - (331,244) 207,917 - (102,123) - (225,450)
'XHWRFKDQJHLQWHPSRUDU\GL΍HUHQFHV - - - - 673,295 - (101,795) - 571,500
Transfer to the current tax liability - tax on realised gain
from derecognition of equity instrument at FVOCI - - - - - - (2,242) - (2,242)
Balance as at 31st December 2021 413,056 277,986 (7,632,294) 1,987,464 (649,550) - 508,695 (168,524) (5,263,167)
GOVERNANCE AND
RISK MANAGEMENT
Balance as at 1st January 2022 413,056 277,986 (7,632,294) 1,987,464 (649,550) - 508,695 (168,524) (5,263,167)
3UR΋WRUORVV 1RWH
Due to rate increase on opening deferred tax (asset)/
liability (Note 16.3.2) 103,264 69,497 (1,908,073) - (20,952) - - (42,131) (1,798,395)
Due to change in deductible loan loss provision
method (Note 16.5) - - (2,686,877) - - - - - (2,686,877)
'XHWRFKDQJHLQWHPSRUDU\GL΍HUHQFHV 50,209 (209,195) (12,064,618) - (134,681) - - (132,478) (12,490,763)
Due to rate increase on opening deferred tax (asset)/
liability (Note 16.3.2) - - - 496,867 (141,436) - 127,174 - 482,605
'XHWRFKDQJHLQWHPSRUDU\GL΍HUHQFHV - - - 558,454 347,148 - 324,510 - 1,230,112
Balance as at 31st December 2022 566,529 138,288 (24,291,862) 3,042,785 (599,471) - 960,379 (343,133) (20,526,485)
INFORMATION
SUPPLEMENTARY

323
33 OTHER ASSETS
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Pre-paid expenses 664,278 421,849 752,317 482,133

Reimbursement under special senior citizen deposit scheme 10,738,328 6,764,928 10,738,328 6,764,928
Items in transit 7,251,655 1,769,625 7,251,655 1,769,625
Other debtors 4,350,520 2,745,577 5,980,622 4,088,695
3UHSDLGVWD΍FRVW 1RWH 3,585,095 2,949,373 3,604,034 2,972,598
Refundable deposits 17,346 12,589 38,248 39,680
&RPPLVVLRQUHFHLYDEOHRQȴQDQFLDOJXDUDQWHHV 1RWH 23,752 44,680 23,752 44,680
26,630,974 14,708,621 28,388,956 16,162,339
7KH0RYHPHQWLQWKH3UH3DLG6WDΊ&RVW
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000

Add: Adjustment for new grants (net of settlements) 984,984 45,120 994,700 65,379
Charge to personnel expenses (349,262) (322,947) (363,264) (336,398)
33.2 Commission Receivable on Financial Guarantees

Bank & Group
2022 2021
Rs 000 Rs 000

Interest income 3,051 4,691
Commission received (23,979) (23,057)
34 DUE TO BANKS
ACCOUNTING POLICY
The accounting policies pertaining to “Due to Banks” are given in Note 3.4.3.7 to the Financial Statements.
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Deposits (Note 34.1) 7,113,008 422,503 7,113,008 422,503

Borrowings (Note 34.2) 4,184,173 23,230,744 8,142,176 31,109,790
Total due to banks 11,297,181 23,653,247 15,255,184 31,532,293

34.1 Deposits
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Local Currency Deposits

Demand deposits 106,406 11,533 106,406 11,533
Savings deposits 108,505 171,868 108,505 171,868
Term deposits 240,629 229,518 240,629 229,518
Margin deposits 9,494 9,494 9,494 9,494
Total local currency deposits 465,034 422,413 465,034 422,413
Foreign Currency Deposits

Demand deposits 164 90 164 90
Term deposits 6,647,810 - 6,647,810 -
Total foreign currency deposits 6,647,974 90 6,647,974 90
Total deposits 7,113,008 422,503 7,113,008 422,503
34.2 Borrowings
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Call borrowings - 4,500,736 - 4,500,736

Term borrowings - - 3,566,714 7,878,340
Foreign bank borrowings 4,062,501 18,164,209 4,062,501 18,164,209
Unfavourable balances with local & foreign banks 121,672 565,799 512,961 566,505
Total Borrowings 4,184,173 23,230,744 8,142,176 31,109,790
The Bank/Group has not had any default of principal and interest with regard to any liability during 2021 and 2022.

35 DUE TO DEPOSITORS
ACCOUNTING POLICY
The accounting policies pertaining to “Due to Depositors” are given in Note 3.4.3.7 to the Financial Statements.
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000

Demand deposits 53,597,498 58,918,844 53,572,363 58,817,154
Saving deposits 241,685,530 347,819,516 241,614,954 347,325,247
Call deposits 6,022 28,865 6,022 28,865
Term deposits 579,849,920 422,241,184 599,001,636 439,208,765
&HUWLȴFDWHVRIGHSRVLWV 5,888,555 13,266,157 5,888,555 13,266,157
Margin deposits 1,854,990 6,676,008 1,854,990 6,676,008
Total local currency deposits 882,882,515 848,950,574 901,938,520 865,322,196

Demand deposits 12,245,502 6,419,632 12,245,502 6,419,632
Saving deposits 52,657,036 33,990,617 52,657,036 33,990,617
Term deposits 148,164,690 88,399,147 148,164,690 88,399,147
Margin deposits 150,131 185,982 150,131 185,982
Total foreign currency deposits 213,217,359 128,995,378 213,217,359 128,995,378
Total deposits 1,096,099,874 977,945,952 1,115,155,879 994,317,574
35.1 Analysis of Due to Depositors

35.1.1 By Product
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Demand deposits 65,843,000 65,338,476 65,817,865 65,236,786

Saving deposits 294,342,566 381,810,133 294,271,990 381,315,864
Call deposits 6,022 28,865 6,022 28,865
Term deposits 728,014,610 510,640,331 747,166,326 527,607,912
&HUWLȴFDWHVRIGHSRVLWV 5,888,555 13,266,157 5,888,555 13,266,157
Margin deposits 2,005,121 6,861,990 2,005,121 6,861,990
Total deposits 1,096,099,874 977,945,952 1,115,155,879 994,317,574

35.1.2 By Currency
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Sri Lankan Rupee 882,882,515 848,950,574 901,938,520 865,322,196

United States Dollar 199,853,189 118,965,520 199,853,189 118,965,520
Euro 3,619,105 2,716,417 3,619,105 2,716,417
Great Britain Pounds 4,693,262 3,119,970 4,693,262 3,119,970
Australian Dollar 3,549,340 2,516,583 3,549,340 2,516,583
Japanese Yen 332,749 216,015 332,749 216,015
New Zealand Dollar 31,522 506,512 31,522 506,512
Singapore Dollar 292,483 190,028 292,483 190,028
Others 845,709 764,333 845,709 764,333
Total deposits 1,096,099,874 977,945,952 1,115,155,879 994,317,574
35.1.3 Current Accounts and Savings Accounts (CASA)
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
CASA
-Due to banks 214,911 183,401 214,911 183,401
-Due to depositors 295,283,028 406,738,360 295,187,317 406,142,401
Total local currency deposits 295,497,939 406,921,761 295,402,228 406,325,802

-Due to banks 164 90 164 90
-Due to depositors 64,902,538 40,410,249 64,902,538 40,410,249
Total foreign currency deposits 64,902,702 40,410,339 64,902,702 40,410,339
Total CASA deposits 360,400,641 447,332,100 360,304,930 446,736,141
Total Deposits
Due to banks (Note 34.1) 7,113,008 422,503 7,113,008 422,503
Due to depositors 1,096,099,874 977,945,952 1,115,155,879 994,317,574
1,103,212,882 978,368,455 1,122,268,887 994,740,077
&$6$DVDSHUFHQWDJH RIWRWDOGHSRVLWV 32.7 45.7 32.1 44.9

36 DUE TO OTHER BORROWERS

Bank & Group
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
5HȴQDQFHERUURZLQJV 9,173,923 14,434,115 9,173,923 14,434,115

9,173,923 14,434,115 9,173,923 14,434,115
The Bank/Group has not had any default of principal and interest with regard to any liability during 2022 and 2021.
37 DUE TO DEBT SECURITIES HOLDERS
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Redeemable debentures (Note 37.1) 21,973,516 27,996,119 27,210,652 34,263,734

Long term bond (Note 37.2) 3,286,020 3,010,473 3,286,020 3,010,473
Securitisation - - 2,375,589 -
Total 25,259,536 31,006,592 32,872,261 37,274,207
Due within 1 year 12,259,536 7,496,119 15,699,261 8,763,734

Due after 1 year 13,000,000 23,510,473 17,173,000 28,510,473
Total 25,259,536 31,006,592 32,872,261 37,274,207
Senior debt - - 4,485,315 2,109,726

Subordinated debt 25,259,536 31,006,592 28,386,946 35,164,481
Total 25,259,536 31,006,592 32,872,261 37,274,207
37.1 Redeemable Debentures
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000

Debentures issued - 6,000,000 - 7,500,000
Debentures redeemed (6,000,000) (6,000,000) (7,000,000) (7,078,010)
21,996,119 28,031,975 27,263,734 34,294,517
Interest accrued during the year 3,177,897 3,384,967 3,839,268 4,090,611
Interest paid (3,200,500) (3,420,823) (3,892,350) (4,121,394)

37.1.1 Details of Debentures issued
Colombo No. of Face Rate of Interest Tenor Allotment Maturity Amortised Cost
Category Stock Debentures Value Interest Payable Date Date As at As at
Exchange Frequency 31.12.2022 31.12.2021
Listing
Rs 000 Rs 000 Rs 000
AND ANALYSIS
Debentures issued by the Bank*

Fixed Rate Debentures

2017 Listed 60,000,000 6,000,000 Semi - annually 5 years 21-Dec-17 21-Dec-22 - 6,022,603
2018 Listed 75,000,000 7,500,000 Semi - annually 5 years 20-Mar-18 20-Mar-23 7,764,555 7,764,555
2019 Listed 70,000,000 7,000,000 Annually 5 years 28-Feb-19 28-Feb-24 7,818,386 7,818,386
2021 Listed 60,000,000 6,000,000 Annually 7 years 12-Apr-21 12-Apr-28 6,390,575 6,390,575
Total debentures issued by the Bank 21,973,516 27,996,119
Debentures issued by the Subsidiary, Siyapatha Finance PLC**

Fixed Rate Debentures
GOVERNANCE AND
RISK MANAGEMENT
2017 Listed 10,000,000 1,000,000 Annually 5 years 4-Oct-17 4-Oct-22 - 1,030,479
2019 Listed 15,000,000 1,500,000 Annually 5 years 8-Aug-19 8-Aug-24 1,579,980 1,579,980
2020 Listed 20,000,000 2,000,000 Annually 3 years 7-Jul-20 7-Jul-23 2,109,726 2,109,726
2021 Listed 15,000,000 1,500,000 Annually 5 Years 1-Sep-21 31-Aug-26 1,547,430 1,547,430
Total debenture issued by the Subsidiary 5,237,136 6,267,615
Total debentures issued by the Group 27,210,652 34,263,734
*Since 2017, the Bank has issued Basel III Tier II compliant listed rated unsecured subordinated redeemable debentures with a non-viability conversion at a par value of Rs 100/- each.
** Siyapatha Finance PLC has issued rated unsecured redeemable debentures at a par value of Rs 100/- each. The debentures issued in 2020 are senior debentures whilst all others are subordinated
debentures.
The Bank & Siyapatha Finance PLC have redeemed the debentures issued in 2017 on 21st December 2022 and 4th October 2022 respectively.
INFORMATION
SUPPLEMENTARY

329
37 DUE TO DEBT SECURITIES HOLDERS CONTD.
37.2 Long Term Bond

Bank & Group
In 2003, the Bank issued a 20-year redeemable zero coupon bond with a redemption value of Rs 3,458 Mn. This bond will mature
on 1st August 2023.
2022 2021
Rs 000 Rs 000

Interest accrued 275,547 252,441
38 RETIREMENT BENEFIT OBLIGATION
ACCOUNTING POLICY
7KHDFFRXQWLQJSROLFLHVSHUWDLQLQJWRȊ5HWLUHPHQW%HQHȴW2EOLJDWLRQȋDUHJLYHQLQ1RWHWRWKH)LQDQFLDO6WDWHPHQWV
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Provision for gratuity (Note 38.1) 1,809,909 1,600,635 1,962,919 1,733,970

Leave accrual plan (Note 38.2) 274,845 278,946 274,845 278,946
EPF Interest guarantee plan (Note 38.3) 97,733 128,446 97,733 128,446
Net (asset)/liability-pension fund (38.4) (337,259) 565,100 (337,259) 565,100
1,845,228 2,573,127 1,998,238 2,706,462
38.1 Provision for Gratuity

0RYHPHQWRI'H΋QHG%HQH΋W2EOLJDWLRQGXULQJWKH\HDU
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000

Current service cost 147,298 140,616 172,944 164,110
Interest expenses 185,674 111,140 201,090 120,331
%HQHȴWVSDLGIURPSODQ (132,598) (48,007) (143,055) (57,908)
Actuarial gain due to changes in assumptions
- Financial assumptions (37,050) (97,278) (45,263) (104,921)
- Demographic assumptions - (64,394) - (68,590)
Actuarial experience loss 45,950 36,094 43,233 41,418

$PRXQWV5HFRJQLVHGLQ3UR΋WRU/RVV
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Current service cost 147,298 140,616 172,944 164,110

Interest expenses 185,674 111,140 201,090 120,331
7RWDODPRXQWUHFRJQLVHGLQSURȴWRUORVV 1RWH 332,972 251,756 374,034 284,441
38.1.3 Amounts Recognised in OCI
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Actuarial gain due to changes in assumptions*

- Financial assumptions (37,050) (97,278) (45,263) (104,921)
- Demographic assumptions - (64,394) - (68,590)
Actuarial experience loss arising during the year 45,950 36,094 43,233 41,418
Total actuarial loss recognised in OCI 8,900 (125,578) (2,030) (132,093)
6LJQLȴFDQWDVVXPSWLRQVXVHGIRUWKHDFWXDULDOYDOXDWLRQDUHJLYHQLQ1RWH
An Actuarial valuation of the gratuity fund of the Bank was carried out as at 31st December 2022 by Mr Piyal S Goonetilleke (Fellow
RI6RFLHW\RI$FWXDULHV86$ RI0HVVUV3L\DO6*RRQHWLOOHNH $VVRFLDWHVDȴUPRISURIHVVLRQDODFWXDULHV7KHYDOXDWLRQPHWKRG
used by the actuary to value the Fund is the "Projected Unit Credit Method", recommended by Sri Lanka Accounting Standard -
/.$6 (PSOR\HH%HQHȴWV
38.1.4 Actuarial Assumptions - Bank
Financial assumptions*
Discount rate
Future salary increment rate
Demographic assumptions
RP 2000 RP 2000
Mortality Mortality Table Mortality Table
Retirement age 60 years 60 years
* Discount rate used for the actuarial valuation changed during the year due to changes in market interest rates. Future salary
increment rate too was revised to fall in line with the increase in market interest rates.
7KH%DQNJHQHUDOO\XVHVWKH\HDUWUHDVXU\ERQGUDWHDVWKHGLVFRXQWUDWH7KHWUHDVXU\ERQGUDWHVLQFUHDVHGVLJQLȴFDQWO\
GXULQJWKH\HDUDQGZDVDURXQGUDQJHGXULQJWKHODWWHUSDUWRI7KHΖQVWLWXWHRI&KDUWHUHG$FFRXQWDQWVRI6UL/DQND
(CA Sri Lanka) has issued guidance [via Frequently Asked Questions (FAQs) on use of discount rate under the uncertain economic
conditions] to consider an adjusted treasury bond rate as the discount rate for the purpose of the actuarial valuations as at 31st
'HFHPEHURQWKHEDVLVWKDWWKHFXUUHQWWUHDVXU\ERQGUDWHVGRQRWUHȵHFWRQO\WKHWLPHYDOXHRIPRQH\$FFRUGLQJO\DQ
adjusted discount rate was derived by removing a credit spread from the current treasury bond rate, as per the guidance issued
by CA Sri Lanka.
Expected average future working life of the active participants is 13.4 years (2021: 13.4 years).

38 RETIREMENT BENEFIT OBLIGATION CONTD.
38.1.5 Sensitivity of Assumptions Employed in Gratuity Valuation - Bank

5HDVRQDEO\SRVVLEOHFKDQJHVDWWKHUHSRUWLQJGDWHWRRQHRIWKHVLJQLȴFDQWDFWXDULDODVVXPSWLRQVKROGLQJRWKHUDVVXPSWLRQV
FRQVWDQWZRXOGKDYHD΍HFWHGWKHJUDWXLW\OLDELOLW\6WDWHPHQWRI&RPSUHKHQVLYHΖQFRPHE\WKHDPRXQWVVKRZQEHORZ
Increase/ Increase/ 2022 2021

(Decrease) in (Decrease) in 6HQVLWLYLW\(ΊHFW Sensitivity 6HQVLWLYLW\(ΊHFW Sensitivity
Discount Rate Salary Increment on Comprehensive (ΊHFWRQ on Comprehensive (ΊHFWRQ
Rate Income Statement Gratuity Liability Income Statement Gratuity Liability
Increase/ Increase/ Increase/ Increase/
(Decrease) in (Decrease) in (Decrease) in (Decrease) in
Comprehensive Liability Comprehensive Liability
Income for the Income for the
Year Year
Rs Mn Rs Mn Rs Mn Rs Mn
- 174.5 (174.5) 158.3 (158.3)

- (207.0) 207.0 (190.2) 190.2
- (204.7) 204.7 (187.4) 187.4
- 175.5 (175.5) 159.1 (159.1)
All Subsidiaries of the Group carry out actuarial valuations to ascertain their respective gratuity liabilities. However assumptions and
the sensitivity of the assumptions have been given only for the gratuity fund of the Bank since subsidiary gratuity liabilities do not
have a material impact on the Group Financial Statements.
38.2 Leave Accrual Plan

38.2.1 Liability Recognised in the Statement of Financial Position
Bank & Group
2022 2021
Rs 000 Rs 000

Provision made during the year (4,101) (6,994)

38.3 EPF Interest Guarantee Plan

Employees’ Provident Fund (EPF) is an approved private provident fund which has been set up to meet the provident fund liabilities
RIWKH%DQNWRZKLFKWKH%DQNDQGHPSOR\HHVFRQWULEXWHDQGUHVSHFWLYHO\RQWKHVDODU\RIHDFKHPSOR\HH(PSOR\HHV
ZKRDUHPHPEHUVRIWKHIXQGDUHHQWLWOHGWRUHFHLYHLQWHUHVWDWDJXDUDQWHHGUDWHRI1DWLRQDO6DYLQJV%DQN VRQH\HDUȴ[HG
GHSRVLWUDWH QHWRILQFRPHWD[ RQWKHLUEDODQFHHYHQLIWKHIXQGHDUQVDORZHUUHWXUQIURPLWVLQYHVWPHQWLQDJLYHQȴQDQFLDO
year. As per Section 8 of the EPF Constitution, the Bank shall contribute any shortfall in the revenue account of the fund, after
payment of interest at the said rate and other cost of administering the fund. Thus the Bank's obligation to EPF is not limited to
FRQWULEXWLRQUHIHUUHGWRDERYHDQGDFFRUGLQJO\WKHIXQGZDVWUHDWHGDVDGHȴQHGEHQHȴWOLDELOLW\DVSHU6UL/DQND$FFRXQWLQJ
6WDQGDUG/.$6 (PSOR\HH%HQHȴWV $QDFWXDULDOYDOXDWLRQZDVFDUULHGRXWE\0U3L\DO6*RRQHWLOOHNH )HOORZRI6RFLHW\
RI$FWXDULHV86$ RI0HVVUV3L\DO6*RRQHWLOOHNH $VVRFLDWHVDȴUPRISURIHVVLRQDODFWXDULHVWRYDOXHWKH%DQN VDGGLWLRQDO
obligation arising from Section 8 of the EPF constitution as at 31st December 2022.
38.3.1 Movement of the Liability Recognised in the Statement of Financial Position

Bank & Group
2022 2021
Rs 000 Rs 000

Current service cost and interest cost 23,542 21,733
Actuarial gain (54,255) (41,773)
Bank & Group
For the year ended 31st December 2022 2021

Rs 000 Rs 000
Current service cost 8,642 10,892

ΖQWHUHVWH[SHQVHRQGHȴQHGEHQHȴWOLDELOLW\ 14,900 10,841
7RWDODPRXQWUHFRJQLVHGLQSURȴWRUORVV 23,542 21,733

Bank & Group

Rs 000 Rs 000
Actuarial (gain)/loss due to changes in assumptions*

- Financial assumptions (41,278) (69,456)
- Demographic assumptions - 40,405
Actuarial gain due to experience adjustments (12,977) (12,722)
Total amount recognised in OCI (54,255) (41,773)

38.3.4 Actuarial Assumptions - Bank
2022 2021
Discount rate
Return from EPF investments
Long term guaranteed EPF interest rate (net of tax)
Mortality RP 2000 RP 2000
Mortality Table Mortality Table
Expected average future working life of the active participants is 13.4 years (2021: 13.4 years)
by CA Sri Lanka.
38.3.5 Sensitivity of Assumptions Employed in EPF Interest Guarantee Plan Valuation

FRQVWDQWZRXOGKDYHD΍HFWHGWKH(3)LQWHUHVWJXDUDQWHHOLDELOLW\6WDWHPHQWRI&RPSUHKHQVLYHΖQFRPHE\WKHDPRXQWVVKRZQ
below.

(Decrease) in (Decrease) in 6HQVLWLYLW\(ΊHFW 6HQVLWLYLW\(ΊHFW 6HQVLWLYLW\(ΊHFW 6HQVLWLYLW\(ΊHFW
Discount Rate Salary Increment on Comprehensive on Employment on Comprehensive on Employment
Rate Income Statement %HQH΋W2EOLJDWLRQ Income Statement %HQH΋W2EOLJDWLRQ
Increase/ Increase/ Increase/ Increase/
(Decrease) in (Decrease) in (Decrease) in (Decrease) in
Comprehensive Liability Comprehensive Liability
Income for the Income for the
Year Year
- 8.7 (8.7) 13.3 (13.3)

- (10.0) 10.0 (15.6) 15.6
- (2.3) 2.3 (3.1) 3.1
- 2.1 (2.1) 2.8 (2.8)

38.4 Pension Fund

38.4.1 Net (Asset)/liability Recognised in the Statement of Financial Position
Bank & Group

Rs 000 Rs 000
Present value of funded obligations as at 31st December (Note 38.4.4) 7,336,784 9,012,682
Fair value of plan assets as at 31st December (Note 38.4.5) (7,674,043) (8,447,582)
Funded status (337,259) 565,100
3UHVHQWYDOXHRIXQIXQGHGEHQHȴWREOLJDWLRQ - -
Net (asset)/liability recognised in the Statement of Financial Position (337,259) 565,100
7KHUHDUHQRPLQLPXPIXQGLQJUHTXLUHPHQWVDSSOLFDEOHWRWKHSHQVLRQIXQGDQGWKHUHIRUHWKH%DQNLVDEOHWRUHFRYHUWKHGHȴQHG
EHQHȴWDVVHWLQIXWXUHYLDUHGXFHGFRQWULEXWLRQVWRWKHIXQG$FFRUGLQJO\WKHIXOOGHȴQHGEHQHȴWDVVHWZDVUHFRJQLVHGLQWKH
Financial Statements as at 31st December 2022.
Bank & Group

Rs 000 Rs 000

1HWLQWHUHVWH[SHQVHRQWKHQHWGHȴQHGEHQHȴWOLDELOLW\ 95,320 408,515
Gain on plan amendments (158,333) (1,958,789)
7RWDODPRXQWUHFRJQLVHGLQSURȴWRUORVV 1RWH 198,465 (1,143,120)

Bank & Group

Rs 000 Rs 000
Actuarial gain due to changes in assumptions*

- Financial assumptions (2,655,618) (3,211,157)
- Demographic assumptions - -
Actuarial loss due to experience adjustments 267,599 454,564
Actuarial loss from plan assets 1,287,195 119,711
Total amount recognised in OCI (1,100,824) (2,636,882)

'H΋QHG%HQH΋W2EOLJDWLRQ5HFRQFLOLDWLRQ
Bank & Group
2022 2021
Rs 000 Rs 000
'HȴQHGEHQHȴWREOLJDWLRQDVDWVW-DQXDU\ 9,012,682 12,661,904

Interest cost 1,060,794 1,012,952
Gain on plan amendments (158,333) (1,958,789)
$FWXDOEHQHȴWVSDLGIURPSODQ (451,818) (353,946)
Actuarial gain due to changes in assumptions
- Financial assumptions (2,655,618) (3,211,157)
- Demographic assumptions - -
Actuarial loss due to experience adjustments 267,599 454,564
'HȴQHGEHQHȴWREOLJDWLRQDVDWVW'HFHPEHU 7,336,784 9,012,682
38.4.5 Fair Value of Plan Assets Reconciliation

Bank & Group
2022 2021
Rs 000 Rs 000
Fair value of plan assets as at 1st January 8,447,582 7,747,202

Interest income on plan assets 965,474 604,437
Actual employer contributions - 569,600
$FWXDOEHQHȴWVSDLGIURPSODQ (451,818) (353,946)
Actuarial loss from plan assets (1,287,195) (119,711)
Fair value of plan assets as at 31st December (Note 38.4.5 (a)) 7,674,043 8,447,582
An actuarial valuation of the Pension Fund was carried out as at 31st December 2022 by Mr Piyal S Goonetilleke (Fellow of Society
$FWXDULHV86$ RI0HVVUV3L\DO6*RRQHWLOOHNH $VVRFLDWHVDȴUPRISURIHVVLRQDODFWXDULHV7KHYDOXDWLRQPHWKRGXVHGE\
the actuary to value the Fund is the "Projected Unit Credit Method", recommended by Sri Lanka Accounting Standard - LKAS 19
(PSOR\HH%HQHȴWV
38.4.5(a) Fair Value of Plan Assets Consists of the Following

Bank & Group

Rs 000 Rs 000
Equity securities & debentures - quoted 798,001 1,410,580

Term deposits 5,327,197 5,922,265
Government securities 718,054 264,654
Others 830,791 850,083
Fair value of plan assets 7,674,043 8,447,582

38.4.6 Actuarial Assumptions

Bank & Group
Discount rate
Expected return on assets
Mortality RP 2000 RP 2000
Mortality Table Mortality Table
Retirement age 60 years 60 years
Expected average future life of the active and retired participants is 29.5 years (2021: 30.5 years).
7KHZHLJKWHGDYHUDJHGXUDWLRQRIWKHGHȴQHGEHQHȴWREOLJDWLRQLV\HDUV \HDUV
by CA Sri Lanka.
38.4.7 Sensitivity of Assumptions Employed in Pension Fund Valuation

FRQVWDQWZRXOGKDYHD΍HFWHGWKHQHWSHQVLRQOLDELOLW\6WDWHPHQWRI&RPSUHKHQVLYHΖQFRPHE\WKHDPRXQWVVKRZQEHORZ

(Decrease) in (Decrease) 6HQVLWLYLW\(ΊHFW 6HQVLWLYLW\(ΊHFWRQ 6HQVLWLYLW\(ΊHFW 6HQVLWLYLW\(ΊHFW
Discount Rate in Salary on Statement of (PSOR\PHQW%HQH΋W on Statement of on Employment
Increment Comprehensive Obligation Comprehensive %HQH΋W2EOLJDWLRQ
Rate Income Increase/(Decrease) in Income Increase/(Decrease)
Increase/(Decrease) Pension Liability Increase/(Decrease) in Pension Liability
in Comprehensive in Comprehensive
Income for the Year Income for the Year
- 583.6 (583.6) 952.9 (952.9)

- (667.6) 667.6 (1,128.6) 1,128.6
- (342.0) 342.0 (532.3) 532.3
- 315.8 (315.8) 486.7 (486.7)

39 CURRENT TAX LIABILITIES/(RECEIVABLES)
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Current tax liabilities 18,754,155 7,524,844 19,186,239 8,375,511

Current tax receivables - - - (4,177)
Net current tax liability (Note 39.1) 18,754,155 7,524,844 19,186,239 8,371,334
39.1 Current Tax Liabilities/(Receivables)
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000

&XUUHQWWD[EDVHGRQSURȴWIRUWKH\HDU 1RWH 16,671,170 7,224,162 17,277,470 8,270,591
(Over)/Under provision in respect of previous years (Note 16)
Due to change in deductible loan loss provision method
(Note 16.5) 2,376,727 - 2,445,580 -
Due to rate reduction (Note 16.3.1) (817,459) - (882,241)
Other (reversals)/charges including settlements (Note 16) (383,674) - (412,906) 19,076
Transferred from deferred tax - derecognition of equity
instruments at FVOCI (Note 32.1) - 2,242 - 2,242
Payment of tax (7,434,912) (3,558,857) (8,495,239) (3,788,355)
40 OTHER LIABILITIES
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Deposit insurance premium payable 273,166 243,607 275,512 245,723

Deferred income 377,233 406,434 377,233 406,434
Lease liability (Note 31.1) 4,291,844 3,726,611 3,908,634 3,493,648
Pay orders and drafts issued 1,103,610 1,209,797 1,103,610 1,209,797
Items in transit 11,329,643 4,594,357 11,329,643 4,594,357
Accrued expenses 6,248,457 3,826,035 6,365,395 3,969,311
Impairment provision for expected credit loss- credit
related commitments & contingencies (Note 45.2) 3,119,064 2,259,974 3,113,300 2,224,118
Other payable (Note 40.1) 4,953,653 2,843,427 6,267,957 4,770,150
31,696,670 19,110,242 32,741,284 20,913,538
40.1 Other payable includes amounts payable to credit/debit card merchants on account of point-of-sale transactions, amounts payable
WRYHQGRUVRQDFFRXQWRIȴQDQFHOHDVHWUDQVDFWLRQVXQFODLPHGEDODQFHVDQGRWKHUPLVFHOODQHRXVSD\DEOHEDODQFHVWKDWKDYH
arisen in the ordinary course of business of the Bank/Group.

41 STATED CAPITAL
Bank & Group
2022 2021
Rs 000 Rs 000

Rights issue - -
Scrip dividend - -
Rights, preferences and restrictions of classes of capital

The holders of ordinary shares have the right to receive dividend as declared from time to time and are entitled to one vote per
share at the Annual General Meeting of the Bank.
41.1 Reconciliation of Number of Shares

Bank & Group
2022 2021
Ordinary shares as at 1st January 1,144,373,955 381,457,985

Shares issued under sub-division - 762,915,970
Ordinary shares as at 31st December 1,144,373,955 1,144,373,955
42 STATUTORY RESERVE FUND
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000

Transfer during the year 680,000 625,000 718,000 680,000
The statutory reserve fund is maintained as required by the section 20 (1) of the Banking Act No. 30 of 1988. A sum equivalent
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WUDQVIHUUHGWRDERYHUHVHUYHXQWLOWKHUHVHUYHLVHTXDOWRRIWKH%DQN VVWDWHGFDSLWDO7KHUHDIWHUDIXUWKHUVXPHTXLYDOHQW
WRRIVXFKSURȴWVVKRXOGEHWUDQVIHUUHGWRWKHVWDWXWRU\UHVHUYHIXQGXQWLOWKHDPRXQWRIWKHVDLGUHVHUYHIXQGLVHTXDOWRWKH
stated capital of the Bank.
6L\DSDWKD)LQDQFH3/&WRRWUDQVIHUVRILWVSURȴWDIWHUWD[WRWKHVWDWXWRU\UHVHUYHIXQGDVUHTXLUHGE\WKH)LQDQFH&RPSDQLHV
(Capital Funds) Direction No. 01 of 2003.

43 OTHER RESERVES
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Revaluation reserve (Note 43.1) 3,594,984 3,159,910 7,092,922 6,293,636

Fair value through other comprehensive income
reserve (Note 43.2) 2,248,650 1,618,637 2,248,650 1,618,637
General reserve (Note 43.3) 58,989,347 52,468,905 58,989,347 52,468,905
64,832,981 57,247,452 68,330,919 60,381,178
43.1 Revaluation Reserve

The revaluation reserve relates to revaluation of freehold land and buildings and represents the fair value changes of the land and
buildings as at the date of revaluation.
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000

Revaluation surplus 977,915 - 1,854,607 -
'HIHUUHGWD[H΍HFWRQUHYDOXDWLRQVXUSOXVLQFOXGLQJWKH
H΍HFWRIUDWHFKDQJHRQWKHRSHQLQJEDODQFH (542,841) 166,311 (1,055,321) 331,244
43.2 Fair Value through Other Comprehensive Income Reserve

7KHIDLUYDOXHWKURXJKRWKHUFRPSUHKHQVLYHLQFRPH )92&Ζ UHVHUYHFRPSULVHVWKHFXPXODWLYHQHWFKDQJHLQIDLUYDOXHRIȴQDQFLDO
assets measured at FVOCI, until such investments are derecognised or impaired.
Bank & Group
2022 2021
Rs 000 Rs 000

Loss on re-measurement - debt instruments at FVOCI (4,477,620) (1,381,203)
5HFODVVLȴFDWLRQWRSURȴWRUORVVGXHWRGHUHFRJQLWLRQGHEWLQVWUXPHQWVDW)92&Ζ 13,481 (30,313)
Changes in impairment for expected credit losses - debt instruments at FVOCI (Note 12) 538,230 34,373
5HFODVVLȴFDWLRQRIWUHDVXU\ERQGVDW)92&ΖWRDPRUWLVHGFRVW 4,787,611 -
(Loss)/gain on re-measurement - equity instruments at FVOCI (3,213,837) 670,639
([FKDQJHGL΍HUHQFHVHTXLW\LQVWUXPHQWVDW)92&Ζ 3,433,832 290,118
'HIHUUHGWD[H΍HFW 1RWH
Due to rate reduction (127,174) 102,123
'XHWRFKDQJHLQWHPSRUDU\GL΍HUHQFH (324,510) 101,795
Realised gain (net of tax) from derecognition of equity instruments at FVOCI (Note 44) - (7,098)

43.3 General Reserve

The Board of Directors decides the amount to be transferred to general reserve from retained earnings after retaining a substantial
amount to pay proposed dividend. The purpose of setting up the general reserve is to meet the potential future unknown
commitments.
Bank & Group
2022 2021
Rs 000 Rs 000

Unclaimed dividend adjustments 20,442 13,119
Transfer during the year 6,500,000 6,000,000
44 RETAINED EARNINGS
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000

Adjustment for Surcharge Tax levied under the Surcharge
Tax Act No. 14 of 2022 (Note 16.4) (2,670,567) - (3,232,510) -
Adjusted balance as at 1st January 6,136,147 4,188,723 10,634,337 7,900,780
3URȴWIRUWKH\HDU 13,134,152 12,457,497 14,060,510 13,856,461
$FWXDULDOJDLQRQGHȴQHGEHQHȴWSODQV 1,146,179 2,804,233 1,157,109 2,810,748
'HIHUUHGWD[H΍HFWLQFOXGLQJWKHH΍HFWRIUDWHFKDQJHRQ
the opening balance (203,418) (878,809) (205,712) (881,212)
Final dividend for 2020: Cash - (3,147,028) - (3,147,028)
Final dividend for 2021: Cash (4,863,589) - (4,863,589) -
Realised gain (net of tax) from derecognition of equity
instruments at FVOCI (Note 43.2) - 7,098 - 7,098
Transfers to reserves during the year (7,180,000) (6,625,000) (7,218,000) (6,680,000)

45 COMMITMENTS AND CONTINGENCIES
ACCOUNTING POLICY
The accounting policies pertaining to “Commitments and Contingencies” are given in Note 3.4.3.8 to the Financial Statements.
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Local currency
Credit related commitments & contingencies
Undrawn - direct credit facilities 103,715,092 116,131,327 102,562,272 112,835,421
Undrawn - indirect credit facilities 66,213,062 57,613,236 66,213,062 57,613,236
Acceptances 89,863 67,600 89,863 67,600
Documentary credit 1,174,783 287,337 1,174,783 287,337
Guarantees 39,984,632 53,083,763 39,990,333 53,089,963
Credit related commitments & contingencies-Local currency 211,177,432 227,183,263 210,030,313 223,893,557
Other commitments & contingencies

Capital commitments 843,434 993,495 1,113,432 2,012,296
Operating lease commitments (Note 45.4) 64,405 41,162 64,405 41,162
Forward exchange contracts 1,349,606 80,035 1,349,606 80,035
Currency SWAPs 4,631,690 15,480,576 4,631,690 15,480,576
Other commitments & contingencies-Local currency 6,889,135 16,595,268 7,159,133 17,614,069
Gross commitments & contingencies-Local currency 218,066,567 243,778,531 217,189,446 241,507,626
Foreign currency
Undrawn - direct credit facilities 46,406,625 27,363,109 46,406,625 27,363,109
Undrawn - indirect credit facilities 8,878,121 2,181,812 8,878,121 2,181,812
Acceptances 12,421,381 39,851,992 12,421,381 39,851,992
Documentary credit 19,816,721 43,515,108 19,816,721 43,515,108
Guarantees 3,839,585 3,691,563 3,839,585 3,691,563
Credit related commitments & contingencies-Foreign currency 91,362,433 116,603,584 91,362,433 116,603,584

Capital commitments 117,551 17,419 117,551 17,419
Forward exchange contracts 2,666,132 8,078,834 2,666,132 8,078,834
Currency SWAPs 6,269,548 25,861,288 6,269,548 25,861,288
Other commitments & contingencies-Foreign currency 9,053,231 33,957,541 9,053,231 33,957,541
Gross commitments & contingencies-Foreign currency 100,415,664 150,561,125 100,415,664 150,561,125
Total gross commitments & contingencies 318,482,231 394,339,656 317,605,110 392,068,751
Impairment for expected credit losses-credit related
commitments & contingencies (Note 45.2) (3,119,064) (2,259,974) (3,113,300) (2,224,118)
Commitments & contingencies - net of impairment for
expected credit losses 315,363,167 392,079,682 314,491,810 389,844,633

45.1 Analysis of Credit Related Commitment and Contingencies based on the Exposure to Credit Risk
Bank
As at 31st December 2022 Stage 1 Stage 2 Stage 3 Total

Rs 000 Rs 000 Rs 000 Rs 000
Undrawn-direct credit facilities 134,560,688 15,561,029 - 150,121,717

Undrawn-indirect credit facilities 52,055,778 23,020,405 15,000 75,091,183
Acceptances 11,031,940 1,443,598 35,706 12,511,244
Documentary credit 18,421,412 2,562,631 7,461 20,991,504
Guarantees 24,039,293 17,437,135 2,347,789 43,824,217
Gross credit related commitments & contingencies 240,109,111 60,024,798 2,405,956 302,539,865
Impairment for expected credit losses (2,128,073) (975,413) (15,578) (3,119,064)
Net credit related commitments & contingencies 237,981,038 59,049,385 2,390,378 299,420,801

Rs 000 Rs 000 Rs 000 Rs 000
Undrawn-direct credit facilities 125,728,863 17,762,843 2,730 143,494,436

Acceptances 35,743,417 3,905,063 271,112 39,919,592
Guarantees 42,432,518 13,731,625 611,183 56,775,326
Net credit related commitments & contingencies 287,950,370 52,715,867 860,636 341,526,873
Group

Rs 000 Rs 000 Rs 000 Rs 000
Undrawn-direct credit facilities 133,407,868 15,561,029 - 148,968,897

Acceptances 11,031,940 1,443,598 35,706 12,511,244
Guarantees 24,044,994 17,437,135 2,347,789 43,829,918
Net credit related commitments & contingencies 236,839,683 59,049,385 2,390,378 298,279,446

Rs 000 Rs 000 Rs 000 Rs 000
Undrawn-direct credit facilities 122,432,957 17,762,843 2,730 140,198,530

Acceptances 35,743,417 3,905,063 271,112 39,919,592
Guarantees 42,438,718 13,731,625 611,183 56,781,526
Net credit related commitments & contingencies 284,696,520 52,715,867 860,636 338,273,023

45 COMMITMENTS AND CONTINGENCIES CONTD.
45.2 Impairment for Expected Credit Losses-Credit Related Commitments and Contingencies
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Stage 1
Net charge for the year (Note 12) 639,857 150,146 669,949 113,173
Stage 2
Stage 3
2WKHUDGMXVWPHQWVLQFOXGLQJH[FKDQJHGL΍HUHQFHV 881 - 881 -
Total
45.3 Capital Commitments

Capital expenditure approved by the Board of Directors, for which provisions have not been made in the accounts are detailed
below.
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Approved & contracted for 821,080 244,883 1,091,078 1,263,684

Approved but not contracted for 139,905 766,031 139,905 766,031
960,985 1,010,914 1,230,983 2,029,715

45.4 Operating Lease Commitments

Bank & Group

Rs 000 Rs 000
Less than 1 year 64,405 41,162

More than 1 year - -
64,405 41,162
45.5 Other Contingent Liabilities

45.5.1 Litigation against the Bank
Litigation is a common occurrence in the banking industry due to the nature of its business and in that light, the Bank has formal
controls and policies in place for managing and defending any legal actions instituted against it. Pursuant to obtaining professional
advice and estimating any loss likely to be incurred by the Bank if any, adjustments are made to the accounts of the Bank in order
WRDFFRPPRGDWHDQ\DGYHUVHH΍HFWVWKDWVXFKFODLPVPD\KDYHRQLWVȴQDQFLDOVWDQGLQJ
i. The following cases instituted against the Bank are currently being adjudicated before court.
(a) Case No. 7058/DMR
7KH3ODLQWL΍LQVWLWXWHGWKLVDFWLRQDJDLQVWWKH%DQNFODLPLQJDVXPRI5V0QRQWKHSXUSRUWHGEDVLVWKDWWKH%DQNKDVLQFUHDVHG
WKHUDWHRILQWHUHVWLQUHVSHFWRIWKHKRXVLQJORDQREWDLQHGE\WKH3ODLQWL΍WKHUHE\FDXVLQJORVVWRWKH3ODLQWL΍:KLOHWKHFDVH
LVFXUUHQWO\EHLQJDGMXGLFDWHGEHIRUHWKH'LVWULFW&RXUWZHQRWHGWKDWWKHOHWWHURIR΍HUFRQȴUPVWKDWWKH%DQNKDVWKHULJKWWR
increase the rate of interest.
(b) DC Colombo Case No. 891/13/MR

The above case was instituted against the Bank claiming damages for Rs 143 Mn on the purported basis that the Bank has
unlawfully auctioned a property under the provisions of Act No. 4 of 1990. The Bank has taken up the position that it has at all
times acted in strict conformity with the applicable law.
(c) CHC Colombo Case No. 29/13/MR

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suspended his credit balance of Rs 299,209.43 resulting in two cheques issued by him being dishonoured. Over Rs 3 Mn is due to
the Bank from the said customer on a charge back created through the payment gateway, which was utilised by the customer. The
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favour of the Bank.
$QDSSHDOZDVSUHIHUUHGWR6XSUHPH&RXUWE\WKH3ODLQWL΍DQGWKHFDVH\HWWREHFRPPHQFHG
(d) CHC Colombo Case No. 299/13/MR

7KH3ODLQWL΍LQVWLWXWHGWKHDERYHDFWLRQDJDLQVWWKH%DQNFODLPLQJGDPDJHVLQDVXPRI5V0QRQWKHSXUSRUWHGEDVLVWKDWWKH
Bank has unlawfully suspended the operation of his current account and the payment gateway facility provided to him by the Bank.
$VXPLQH[FHVVRI5V0QLVGXHWRWKH%DQNIURPWKH3ODLQWL΍RQDFKDUJHEDFNFUHDWHGWKURXJKWKHSD\PHQWJDWHZD\XWLOLVHGE\
WKH3ODLQWL΍7KH%DQNLVGHIHQGLQJWKLVDFWLRQRQWKHEDVLVWKDWLWKDVULJKWLQODZWRVHWR΍GXHVDJDLQVWRWKHUIDFLOLWLHVJUDQWHGWR
WKH3ODLQWL΍E\WKH%DQN-XGJPHQWGHOLYHUHGLQIDYRXURIWKH%DQN
$QDSSHDOZDVSUHIHUUHGWR6XSUHPH&RXUWE\WKH3ODLQWL΍DQGWKHFDVH\HWWREHFRPPHQFHG

45 COMMITMENTS AND CONTINGENCIES CONTD.
(e) CHC Colombo Case No. CHC/167/2020/MR and Case No. CHC/168/2020/MR
7KH3ODLQWL΍VKDYHȴOHGWKHDERYHDFWLRQVDJDLQVWWKH%DQNFODLPLQJDVXPRI5V0QDQG5V0QUHVSHFWLYHO\IURPLQWHUDOLD
WKH%DQNRQWKHSXUSRUWHGEDVLVWKDWWKH%DQNKDVHUURQHRXVO\XSOLIWHGWKHGHSRVLWVDQGWUDQVIHUUHGPRQLHVIURP3ODLQWL΍ȇVSHUVRQDO
and corporate accounts without his consent and knowledge. The Bank is of the view that it has acted as per the provisions of law.
The orders of the above cases were delivered in favour of the Bank by dissolving the enjoining orders and refusing to grant the
interim reliefs sought.
(f) Case No. CA/WRIT/205/2020

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Court of Appeal dismissed the application of the petitioners on 18th November 2020.
An appeal was preferred to the Supreme Court by the petitioners against the judgement delivered in favour of the Bank.
(g) Case No. SC/SPL/LA/22/2020 & SC/SPL/LA/23/2020 & SC/SPL/LA/258/2020

7KHVHDSSOLFDWLRQVZHUHSUHIHUUHGE\WKH3ODLQWL΍VRI&+&05&+&05DQG&$:5Ζ7DJDLQVWWKH
orders delivered in favour of the Bank by dissolving the enjoining orders and refusing to grant the interim reliefs sought.
(h) Case No. CHC/91/2020/MR

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WKHJXDUDQWHHFODLPRIWKHEHQHȴFLDU\7KH%DQNKDVWDNHQXSWKHSRVLWLRQWKDWLWKDVDOOWLPHVDFWHGLQVWULFWFRQIRUPLW\ZLWKWKH
applicable law.
(i) Case No. CHC/21/2021/MR

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has recovered part of the outstanding facilities without consent of the customer. However, the Bank has taken up the position that
it has all times acted on the written instructions of the customer and in strict conformity with the applicable law.
LL ,QDGGLWLRQWRWKHDERYHFDVHVWKHIROORZLQJFDVHVKDYHDOVREHHQ΋OHGDJDLQVWWKH%DQNLQRUGHUWRSUHYHQWWKH%DQNIURP
enforcing the mortgages to recover its dues:
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E (LJKWDFWLRQVKDYHEHHQȴOHGLQ&RXUWRI$SSHDO
F 6L[W\VL[DFWLRQVKDYHEHHQȴOHGLQ&RPPHUFLDO+LJK&RXUW
G 2QHKXQGUHGDQGWKLUW\IRXUDFWLRQVKDYHEHHQȴOHGLQ'LVWULFW&RXUWV
45.5.2 Litigation on Employment and Industrial Relations

There are no material legal issues outstanding against the Bank and Group on employment and industrial relations as at 31st
December 2022.
45.5.3 Litigation against the Group

(a) D C Kandy Case No. DLM/213/2018
3UHYLRXVRZQHURIWKHFXVWRPHU VSURSHUW\KDVȴOHGDQDFWLRQDJDLQVWWKHSUHVHQWRZQHUDQG6L\DSDWKD)LQDQFH3/&FKDOOHQJLQJ
WKH'HHGRI7UDQVIHUEHWZHHQKHUVHOIDQGWKHFXVWRPHU6L\DSDWKD)LQDQFH3/&KDVDOUHDG\ȴOHGDFWLRQDJDLQVWWKHFXVWRPHUXQGHU
FDVH1R&+&05GHPDQGLQJDVXPRI5V0QZKLFKLVȴ[HGIRUWULDORQWK0D\DQGQHJRWLDWLQJVHWWOHPHQWZLWK
the customer.
2WKHUWKDQWKRVHGLVFORVHGDERYHWKHUHLVQRFDVHȴOHGDJDLQVWWKH*URXSZKLFKZRXOGKDYHPDWHULDOLPSDFWRQWKHȴQDQFLDO
position of the Group.

46 NET ASSET VALUE PER SHARE
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Amounts used as the numerator:

Total equity attributable to equity holders of the Bank (Rs) 126,379,945 118,751,659 135,551,067 127,185,518
Number of ordinary shares used as the denominator:
Total number of shares (Note 41.1) 1,144,373,955 1,144,373,955 1,144,373,955 1,144,373,955
Net assets value per share (Rs) 110.44 103.77 118.45 111.14
47 RELATED PARTY DISCLOSURES

7KH%DQNDQGWKH*URXSFDUU\RXWWUDQVDFWLRQVLQWKHRUGLQDU\FRXUVHRIEXVLQHVVZLWKWKHSDUWLHVZKRDUHGHȴQHGDVUHODWHG
parties in the Sri Lanka Accounting Standards - LKAS 24 (Related Party Disclosures), the details of which are reported below.
47.1 Terms and Conditions

The pricing applicable to such transactions is based on the assessment of risk and pricing model of the Bank and is comparable
with what is applied to transactions between the Bank/Group and its unrelated customers with similar credit standing.
47.2 Parent and Ultimate Controlling Party

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47.3 Transactions with Key Management Personnel (KMP)

As per Sri Lanka Accounting Standard - LKAS 24 (Related Party Disclosures), Key Management Personnel (KMP) are those having
DXWKRULW\DQGUHVSRQVLELOLW\IRUSODQQLQJGLUHFWLQJDQGFRQWUROOLQJWKHDFWLYLWLHVRIWKHHQWLW\$FFRUGLQJWRWKHDERYHGHȴQLWLRQ
a person cannot be considered as a KMP unless such person has both the authority and responsibility to carry out all the three
DFWLYLWLHVPHQWLRQHGLQWKHDERYHGHȴQLWLRQ LHSODQQLQJGLUHFWLQJDQGFRQWUROOLQJWKHDFWLYLWLHVRIWKHHQWLW\
Accordingly, the Board of Directors of the Bank are considered as KMP of the Bank and the Group.
47.3.1 Compensation to KMP
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
6KRUWWHUPHPSOR\PHQWEHQHȴWV
Directors' fees & expenses 97,853 82,868 102,464 87,216
6KRUWWHUPEHQHȴWV 109,930 87,894 109,930 87,894
3RVWHPSOR\PHQWEHQHȴWV 9,683 8,030 9,683 8,030
Total 217,466 178,792 222,077 183,140

47 RELATED PARTY DISCLOSURES CONTD.
47.3.2 Transactions with KMP and their Close Family Members (CFM)
&)0VRIWKH.03DUHWKRVHIDPLO\PHPEHUVZKRPD\EHH[SHFWHGWRLQȵXHQFHWKH.03RUEHLQȵXHQFHGE\WKDW.03LQWKHLU
dealings with the entity. They may include KMP's spouse, children, domestic partner, children of the KMP's spouse/domestic
partner and dependents of the KMP, KMP's spouse/domestic partner. Aggregate value of the transactions with KMP and their CFMs
are disclosed below.

Limit Closing Average Limit Closing Average
Balance Balance Balance Balance
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Loans & advances 48,000 15,049 26,801 61,572 54,399 54,801

Credit cards 11,100 4,629 2,018 9,220 6,013 2,027
Indirect facilities 72,000 - - 80,000 - -
Deposits 790,406 410,266 171,325 169,262
Debentures 5,000 5,000 5,000 13,307

Rs 000 Rs 000
Interest & other income 4,383 4,012

Interest expense 42,198 10,056
Cash dividend paid 8,500 5,500
1RORVVHVKDYHEHHQUHFRUGHGDJDLQVWORDQEDODQFHVRXWVWDQGLQJZLWK.03GXULQJWKHSHULRGDQGQRVSHFLȴFSURYLVLRQVKDYHEHHQ
made under impairment losses against such balances as at the reporting date.
47.4 Transactions with Subsidiaries

Details of the subsidiaries are given in Note 28. Aggregate value of transactions with subsidiaries are disclosed below.
2022 2021
Subsidiary Company Nature of Facility/ Limit Average 31st Limit Average 31st
Transaction Balance December Balance December
Balance Balance
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Sampath Centre Ltd As at

Loans & advances 1,021,428 1,020,360 1,021,406 1,125,000 919,047 1,026,477
Other assets 62,754 62,754 62,754 62,754
Deposits 213,613 125,589 265,321 324,775
Other liabilities 83,814 27,754 72,302 71,491
For the year ended
Dividend income 39,318 22,938
Income & fees received 68,675 89,042
Expenses & fees paid 488,917 442,619

2022 2021
Subsidiary Company Nature of Facility/ Limit Average 31st Limit Average 31st
Transaction Balance December Balance December
Balance Balance
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
SC Securities (Pvt) Ltd As at

Loans & advances 400,000 105,557 226,236 404,050 135,276 35,805
Deposits 50,859 11,685 35,742 38,891
Other liabilities - - 118,600 -
Indirect facilities - - 1,400 -
For the year ended
Siyapatha Finance As at
PLC Loans & advances 5,633,533 4,462,324 5,155,489 5,483,333 3,233,639 2,941,719
Deposits 69,470 61,107 89,632 158,642
Other liabilities 430,487 - 200,000 -
Indirect facilities - - - 400,000 - -
For the year ended
Income & fees received 1,004,657 243,738
Sampath Information As at
Technology Solutions Loans & advances 50,000 9,954 - 450,500 51,285 20,534
Ltd
Deposits 92,189 87,659 96,939 220,992
Indirect facilities 375,000 4,756 1,722 25,000 11,095 16,466
For the year ended
Expenses & fees paid
excluding reimbursement
of expenses 267,530 250,586
Purchase of computer
hardware & software 98,956 44,789
The Directors' valuation of investments in subsidiaries has been carried out on net asset basis as at 31st December 2022. The
net asset value of all subsidiary companies exceeded carrying value of the investments as at 31st December 2022. Accordingly,
WKH%DQNKDVQRWPDGHDQ\VSHFLȴFSURYLVLRQVXQGHULPSDLUPHQWORVVHVDJDLQVWLWVLQYHVWPHQWLQVXEVLGLDU\FRPSDQLHVDVDWWKH
reporting date.

47 RELATED PARTY DISCLOSURES CONTD.
47.5 Transactions with Other Related Parties

47.5.1 Transactions with Entities Controlled and/or Jointly Controlled by KMP or their CFMs

Limit Average Closing Limit Average Closing
Balance Balance Balance Balance
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Loans & advances 4,001,700 1,138,494 2,482,697 6,651,700 862,238 329,651

Indirect facilities 600,000 307,715 161,704 93,500 9,095 37,193
Deposits 100,830 194,799 77,914 48,815
Rs 000 Rs 000
Interest & other income 83,550 47,515

Interest & other expenses 3,471 525
Cash dividend 4,909 3,176
No losses have been recorded against loan balances outstanding with the entities controlled/jointly controlled by KMP/CFMs of KMP
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7UDQVDFWLRQVZLWK3RVW(PSOR\PHQW%HQH΋W3ODQVRIWKH%DQN
2022 2021
Name of the Post Employment Nature of Transactions Average 31st Average 31st
%HQH΋W3ODQ Balance December Balance December
Balance Balance
Rs 000 Rs 000 Rs 000 Rs 000
Sampath Bank Employees' As at

Provident Fund Deposits 2,632,251 2,615,431 1,739,751 1,433,765
Debentures 943,500 943,500 811,708 943,500
Interest payable 218,157 330,585 131,995 197,928
For the year ended
Sampath Bank Employees' As at

Pension Fund Deposits 1,438,419 2,917,706 559,192 51,730
Debentures 809,000 809,000 658,833 809,000
Investment in Sampath Bank
Shares - market value 453,110 397,205 625,524 601,580
Investment in REPO 625,649 - - -
Interest payable 119,241 309,114 54,002 56,549
Net (asset)/liability in
the Bank's Financial
Statements (Note 38.4.1) (337,259) 565,100
For the year ended
Dividend paid - Cash 49,073 31,753

48 SEGMENT INFORMATION
ACCOUNTING POLICY
An operating segment is a component of the Group that engages in business activities from which it may earn revenue and
incur expenses, including revenue and expenses that relate to transactions with any of the Group’s other components, whose
operating results are reviewed regularly by the chief operating decision maker to make decisions about resources allocated to
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)RUPDQDJHPHQWSXUSRVHVWKH*URXSKDVLGHQWLȴHGIRXURSHUDWLQJVHJPHQWVEDVHGRQSURGXFWVDQGVHUYLFHVDVIROORZV
Ì Corporate Banking
Ì Retail and Personal Banking
Ì Dealing/Investment
Ì Others
Retail and personal banking includes the activities of Siyapatha Finance PLC in addition to the retail and personal banking
business of the Bank. Dealing/Investment involves activities such as stock broking, securities dealing, investment banking and
foreign currency related services.
Management monitors the operating results of its business units separately for the purpose of making decisions about resource
DOORFDWLRQDQGSHUIRUPDQFHDVVHVVPHQW6HJPHQWSHUIRUPDQFHLVHYDOXDWHGEDVHGRQRSHUDWLQJSURȴWVRUORVVHVZKLFKLQ
FHUWDLQUHVSHFWVDUHPHDVXUHGGL΍HUHQWO\IURPRSHUDWLQJSURȴWVRUORVVHVLQWKH&RQVROLGDWHG)LQDQFLDO6WDWHPHQWV7D[HVDUH
managed at an entity level and are not allocated to operating segments.
Interest income is reported net as management primarily relies on net interest income as a performance measure, not the
gross income and expense.
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revenue in 2022 or 2021.
7KHIROORZLQJWDEOHSUHVHQWVLQFRPHSURȴWWRWDODVVHWVWRWDOOLDELOLWLHV FDVKȵRZVRIWKH*URXSȇVRSHUDWLQJVHJPHQWV

48 SEGMENT INFORMATION CONTD.
352
Corporate Banking Retail & Personal Dealing/Investment Others (Eliminations)/ Total

Banking Unallocated
For the year ended 31st December 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Net interest income 47,746,614 12,258,017 47,843,168 32,852,475 15,600,571 10,636,651 - - (35,148,260) (10,228,943) 76,042,093 45,518,200
Net fee & commission income 6,233,768 2,975,792 13,517,204 8,777,936 433,824 717,281 - - - - 20,184,796 12,471,009
Net (loss)/gain from trading - - - - (2,266,306) 399,243 - - - - (2,266,306) 399,243
1HWJDLQRQGHUHFRJQLWLRQRIȴQDQFLDODVVHWV - - - - 559,216 150,413 - - - - 559,216 150,413
Net other operating income 143,270 142,822 2,046,560 1,507,970 (1,414,509) 2,341,422 126,408 96,613 19,346,308 1,771,748 20,248,037 5,860,575
ABOUT
Total revenue from external customers 54,123,652 15,376,631 63,406,932 43,138,381 12,912,796 14,245,010 126,408 96,613 (15,801,952) (8,457,195) 114,767,836 64,399,440

Inter segment (expense)/income (1,501,031) (342,033) 1,544,461 428,745 - - 685,590 595,838 (729,020) (682,550) - -
Total operating income 52,622,621 15,034,598 64,951,393 43,567,126 12,912,796 14,245,010 811,998 692,451 (16,530,972) (9,139,745) 114,767,836 64,399,440
Less: Impairment charge 28,725,504 6,903,761 26,311,844 8,063,356 7,844,254 3,740,198 12,448 285 14,071 (148,400) 62,908,121 18,559,200
Net operating income 23,897,117 8,130,837 38,639,549 35,503,770 5,068,542 10,504,812 799,550 692,166 (16,545,043) (8,991,345) 51,859,715 45,840,240
Less: Total operating expenses 516,687 441,498 17,243,591 13,861,521 429,661 482,004 428,149 472,601 11,270,229 7,461,733 29,888,317 22,719,357
Segment result 23,380,430 7,689,339 21,395,958 21,642,249 4,638,881 10,022,808 371,401 219,565 (27,815,272) (16,453,078) 21,971,398 23,120,883
/HVV7D[HVRQȴQDQFLDOVHUYLFHV 5,576,779 4,295,777
Less: Income tax expense 2,334,109 4,968,645
3URȴWIRUWKH\HDU 14,060,510 13,856,461
Non controlling interest - -
3URȴWDWWULEXWDEOHWRHTXLW\KROGHUVRIWKH%DQN 14,060,510 13,856,461
As at 31st December 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Segment assets 422,488,549 356,821,940 489,114,995 494,687,698 344,425,424 351,627,227 8,507,184 7,671,072 (11,500,447) (9,082,433) 1,253,035,705 1,201,725,504
Unallocated assets - - - - - - - - 114,283,857 40,907,146 114,283,857 40,907,146

Total assets 422,488,549 356,821,940 489,114,995 494,687,698 344,425,424 351,627,227 8,507,184 7,671,072 102,783,410 31,824,713 1,367,319,562 1,242,632,650
Segment liabilities 40,942,456 33,058,145 1,095,172,868 964,379,516 9,387,667 22,987,301 2,988,784 2,664,129 (7,823,991) (5,669,655) 1,140,667,784 1,017,419,436
Unallocated liabilities - - - - - - - - 91,100,711 98,027,696 91,100,711 98,027,696
Total liabilities 40,942,456 33,058,145 1,095,172,868 964,379,516 9,387,667 22,987,301 2,988,784 2,664,129 83,276,720 92,358,041 1,231,768,495 1,115,447,132
For the year ended 31st December 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
&DVKȵRZVIURPRSHUDWLQJDFWLYLWLHV 10,837,142 (6,832,893) 10,852,519 29,597,453 (498,247) 379,405 213,342 617,288 (2,216,035) (5,622) 19,188,721 23,755,631
&DVKȵRZVIURPLQYHVWLQJDFWLYLWLHV - - - - 52,556,933 (24,778,336) (493,569) (445,638) (4,623,632) (1,655,519) 47,439,732 (26,879,493)
&DVKȵRZVIURPȴQDQFLQJDFWLYLWLHV - - (1,850,582) (141,317) - - (36,130) 20,244 (8,535,268) (3,779,693) (10,421,980) (3,900,766)
STRATEGY REPORT
Capital expenditure - - (657,979) (711,109) - - (542,402) (1,983,288) (1,202,028) 822,837 (2,402,409) (1,871,560)
49 EVENTS AFTER THE REPORTING PERIOD
ACCOUNTING POLICY
Events after the reporting period are those events, favourable and unfavourable, that occur between the reporting date and
the date when the Financial Statements are authorised for issue. No circumstances have arisen since the reporting date which
would require adjustments to, or disclosure in the Financial Statements, other than those disclosed below.
49.1 Proposed Dividend

7KH%RDUGRI'LUHFWRUVKDVUHFRPPHQGHGDȴQDOGLYLGHQGRI5VSHUVKDUH 5VSHUVKDUHLQFDVKDQG5VSHUVKDUH
LQVFULS IRUWKHȴQDQFLDO\HDUHQGHGVW'HFHPEHUVXEMHFWWRWKHDSSURYDORIWKHVKDUHKROGHUVDWWKH$QQXDO*HQHUDO
Meeting to be held on 30th March 2023. The Bank will inform the Director Bank Supervision of Central Bank of Sri Lanka, the Board
approved detailed assessment carried out in deciding the payment of cash dividend for the year 2022.
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not been recognised as a liability as at 31st December 2022. As required by Section 56 (2) of the Companies Act No. 07 of 2007, the
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No. 07 of 2007.
49.2 Debenture Issue 2023/2028

7KH%DQNR΍HUHGWRLVVXH0Q%DVHOΖΖΖFRPSOLDQW7LHUOLVWHGUDWHGXQVHFXUHGVXERUGLQDWHGUHGHHPDEOH\HDUGHEHQWXUHV
(2023/28) with a non-viability conversion, of the par value of Rs 100/- each to raise a sum of up to Rs 5 Bn, with an option to issue
up to a further 20 Mn of said debentures to increase the said sum by up to a further Rs 2 Bn at the discretion of the Bank in the
event of an oversubscription of the initial issue and with a further option to issue up to a further 30 Mn of said debentures to
increase the said sum by up to a further Rs 3 Bn, at the discretion of the Bank in the event of an oversubscription of the initial issue
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7KH%DQNUDLVHG5V%QZRUWKRI%DVHOΖΖΖFRPSOLDQWȂ7LHUIXQGVIURPWKHDERYHLVVXHRQWK)HEUXDU\
49.3 Revision of National Long Term Rating by Fitch Ratings

Fitch Ratings Lanka Limited has revised their ratings of 10 Sri Lankan banks including Sampath Bank on 12th January 2023 following
the recent sovereign downgrade and recalibration of Agency’s Sri Lankan national rating scale.
Accordingly, Sampath Bank’s National Long Term rating has been revised down to ‘A (lka)/RWN’ from ‘AA-(lka)/RWN’. Further, Fitch
has assigned 'BBB+(lka)' rating for Bank's Basel III compliant subordinated debentures.
50 FAIR VALUE OF ASSETS & LIABILITIES

50.1 Assets & Liabilities Recorded at Fair Value
The following is a description of how fair values are determined for assets and liabilities that are recorded at fair value. These
incorporate the Bank’s estimate of assumptions that a market participant would make when valuing assets and liabilities.
Derivatives - Assets & Liabilities

Derivative products which consist of SWAPs, forward foreign exchange contracts and hedges are valued using a valuation technique
with market-observable inputs. The most frequently applied valuation techniques include forward foreign exchange spot and
forward premiums.
Financial Assets - Fair Value through Other Comprehensive Income (FVOCI)

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valued using the yield curve published by the Central Bank of Sri Lanka. Quoted equity securities are valued using quoted market
prices in the active markets as at the reporting date.

50 FAIR VALUE OF ASSETS & LIABILITIES CONTD.
Trading Assets Measured at Fair Value

Trading assets and other assets measured at fair value are the government securities and quoted equity securities. Government
securities are valued using yield curve published by the Central Bank of Sri Lanka. For quoted equity securities, the Bank uses
quoted market prices in the active market as at the reporting date.
Property, Plant & Equipment

Freehold land and buildings are carried at revalued amount, being their fair value at the revaluation date less any subsequent
accumulated depreciation and subsequent accumulated impairment losses.
50.2 Valuation Model

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to models, independent price determination or validation is obtained. In an inactive market, direct observation of a traded price
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value, with greater weight given to information that is considered to be more relevant and reliable.
Fair value of freehold land and buildings was determined by using Market Comparable Method or Income Basis. These valuations
SHUIRUPHGE\WKHYDOXHUVDUHEDVHGRQDFWLYHPDUNHWSULFHVVLJQLȴFDQWO\DGMXVWHGIRUGL΍HUHQFHLQWKHQDWXUHORFDWLRQRUFRQGLWLRQ
RIWKHVSHFLȴFSURSHUW\0DQDJHPHQWGHWHUPLQHGWKDWIUHHKROGODQGDQGEXLOGLQJVFRQVWLWXWHRQHFODVVRIDVVHWXQGHU6UL/DQND
Accounting Standard - SLFRS 13 (Fair Value Measurement), based on the nature, characteristics and risks of the property.
Fair values are determined according to the following hierarchy:
/HYHOȂ4XRWHGPDUNHWSULFH XQDGMXVWHG TXRWHGSULFHVIRULGHQWLFDODVVHWVDQGOLDELOLWLHVLQDFWLYHPDUNHWV
/HYHOȂ9DOXDWLRQWHFKQLTXHXVLQJREVHUYDEOHLQSXWVTXRWHGSULFHVIRUVLPLODUDVVHWVDQGOLDELOLWLHVLQDFWLYHPDUNHWVRUTXRWHG
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observable.
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RQHRUPRUHVLJQLȴFDQWLQSXWVDUHXQREVHUYDEOH
50.3 Valuation Framework

The Bank has an established control framework with respect to the measurement of fair values of trading and investment
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Ì $
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changes to existing judgments, assumptions and models.
Ì Periodic (at least quarterly) reviewing of fair value measurements against observable market data.
Ì 3HULRGLF DWOHDVWDQQXDOO\ UHYLHZLQJRIIDLUYDOXHPHDVXUHPHQWPRGHOVDJDLQVWFKDQJHVLQPDUNHWFRQGLWLRQVVLJQLȴFDQW
judgments and assumptions.
Ì Use of sophisticated software for fair value measurements of trading and investment securities and derivatives.
Ì ΖQGHSHQGHQWDQDO\VLVDQGLQYHVWLJDWLRQRIVLJQLȴFDQWGDLO\YDOXDWLRQPRYHPHQWVLQWUDGLQJDQGLQYHVWPHQWVHFXULWLHVDQG
derivatives.
Ì $GXDOYHULȴFDWLRQSURFHVVIRUPDUNHWGDWDLQSXWVWRWKHIDLUYDOXHPHDVXUHPHQWVRIWZDUH
50.4 Assets & Liabilities Measured at Fair Value - Fair Value Hierarchy
The following table shows an analysis of assets and liabilities recorded at fair value by level of the fair value hierarchy into which the
fair value measurement is categorised. The amounts are based on the value recognised in the Statement of Financial Position.

50.4.1 Assets & Liabilities Measured at Fair Value - Fair Value Hierarchy
Bank

Fair Value Measurement Using Fair Value Measurement Using
Date of Quoted Prices 6LJQL΋FDQW 6LJQL΋FDQW Total Quoted Prices 6LJQL΋FDQW 6LJQL΋FDQW Total
Valuation in Active Observable Unobservable in Active Observable Unobservable
AND ANALYSIS
Markets Inputs Inputs Markets Inputs Inputs

(Level 1) (Level 2) (Level 3) (Level 1) (Level 2) (Level 3)
Financial assets measured at fair value

'HULYDWLYH΋QDQFLDOLQVWUXPHQWV 31st December
Currency SWAPs - 30,439 - 30,439 - 947,959 - 947,959
Forward exchange contracts - 14,159 - 14,159 - 451,160 - 451,160
Sub Total - 44,598 - 44,598 - 1,399,119 - 1,399,119
)LQDQFLDODVVHWVIDLUYDOXHWKURXJKSUR΋WRUORVV 31st December

Government securities -Treasury bills & bonds 4,641,277 - - 4,641,277 3,858,578 - - 3,858,578
GOVERNANCE AND
RISK MANAGEMENT
Quoted equity securities - - - - 49,126 - - 49,126

Sub Total 4,641,277 - - 4,641,277 3,907,704 - - 3,907,704

comprehensive income 31st December
Government securities
Treasury bills & bonds 27,369,187 - - 27,369,187 37,686,538 - - 37,686,538
Sri Lanka Development Bonds - - - - - 290,184 - 290,184
Sri Lanka International Sovereign Bonds - 671,756 - 671,756 516,511 - - 516,511
Equity Securities
Quoted equity securities 4,671,146 - - 4,671,146 4,451,151 - - 4,451,151
Unquoted equity securities - - 60,841 60,841 - 30,517 29,244 59,761
Sub Total 32,040,333 671,756 60,841 32,772,930 42,654,200 320,701 29,244 43,004,145
7RWDOȴQDQFLDODVVHWVPHDVXUHGDWIDLUYDOXH 36,681,610 716,354 60,841 37,458,805 46,561,904 1,719,820 29,244 48,310,968
1RQ΋QDQFLDODVVHWVPHDVXUHGDWIDLUYDOXH 31st December

Freehold land & buildings (included under
property, plant & equipment) - - 6,792,986 6,792,986 - - 5,811,922 5,811,922
7RWDOQRQȴQDQFLDODVVHWVPHDVXUHGDWIDLUYDOXH - - 6,792,986 6,792,986 - - 5,811,922 5,811,922
Financial liabilities measured at fair value

INFORMATION
SUPPLEMENTARY
Currency SWAPs - 1,435,157 - 1,435,157 - 604,362 - 604,362

7RWDOȴQDQFLDOOLDELOLWLHVPHDVXUHGDWIDLUYDOXH - 1,449,393 - 1,449,393 - 607,923 - 607,923
ΖQYHVWPHQWLQ6UL/DQNDΖQWHUQDWLRQDO6RYHUHLJQ%RQGVZKLFKZDVSUHYLRXVO\FODVVLȴHGXQGHU/HYHOPRYHGWR/HYHODVDWVW'HFHPEHUVLQFHWKHPDUNHWLVQRWDFWLYHDVDW
the reporting date.

355
356
50.4.2 Assets & Liabilities Measured at Fair Value - Fair Value Hierarchy
Group

Fair Value Measurement Using Fair Value Measurement Using
Date of Quoted Prices 6LJQL΋FDQW 6LJQL΋FDQW Total Quoted Prices 6LJQL΋FDQW 6LJQL΋FDQW Total
Valuation in Active Observable Unobservable in Active Observable Unobservable
Markets Inputs Inputs Markets Inputs Inputs
(Level 1) (Level 2) (Level 3) (Level 1) (Level 2) (Level 3)
ABOUT

Financial assets measured at fair value
Currency SWAPs - 30,439 - 30,439 - 947,959 - 947,959
Sub Total - 44,598 - 44,598 - 1,399,119 - 1,399,119
)LQDQFLDODVVHWVIDLUYDOXHWKURXJKSUR΋WRUORVV 31st December

Government securities -Treasury bills & bonds 4,641,277 - - 4,641,277 3,858,578 - - 3,858,578
Quoted equity securities 181,118 - - 181,118 49,126 - - 49,126
Sub Total 4,822,395 - - 4,822,395 3,907,704 - - 3,907,704

comprehensive income 31st December
Government securities
Treasury bills & bonds 27,369,187 - - 27,369,187 37,686,538 - - 37,686,538
Sri Lanka Development Bonds - - - - - 290,184 - 290,184
Sri Lanka International Sovereign Bonds - 671,756 - 671,756 516,511 - - 516,511
Equity Securities
Quoted equity securities 4,671,146 - - 4,671,146 4,451,151 - - 4,451,151

Unquoted equity securities - - 60,897 60,897 - 30,517 29,300 59,817
Sub Total 32,040,333 671,756 60,897 32,772,986 42,654,200 320,701 29,300 43,004,201
7RWDOȴQDQFLDODVVHWVPHDVXUHGDWIDLUYDOXH 36,862,728 716,354 60,897 37,639,979 46,561,904 1,719,820 29,300 48,311,024
1RQ΋QDQFLDODVVHWVPHDVXUHGDWIDLUYDOXH 31st December

Freehold land & buildings (included under
property, plant & equipment) - - 14,766,601 14,766,601 - - 11,536,903 11,536,903
7RWDOQRQȴQDQFLDODVVHWVPHDVXUHGDWIDLUYDOXH - - 14,766,601 14,766,601 - - 11,536,903 11,536,903
Financial liabilities measured at fair value 31st December

'HULYDWLYH΋QDQFLDOLQVWUXPHQWV
Currency SWAPs - 1,435,157 - 1,435,157 - 604,362 - 604,362
STRATEGY REPORT

7RWDOȴQDQFLDOOLDELOLWLHVPHDVXUHGDWIDLUYDOXH - 1,449,393 - 1,449,393 - 607,923 - 607,923
ΖQYHVWPHQWLQ6UL/DQNDΖQWHUQDWLRQDO6RYHUHLJQ%RQGVZKLFKZDVSUHYLRXVO\FODVVLȴHGXQGHU/HYHOZDVPRYHGWR/HYHODVDWVW'HFHPEHUVLQFHWKHPDUNHWLVQRWDFWLYHDV
at the reporting date.
50.5 Level 3 Fair Value Measurement

50.5.1 Reconciliation
The following table shows a reconciliation from the beginning balances to the ending balances of fair value measurements in Level
3 of the fair value hierarchy.
Bank Group
Assets Measured at Level 3 Assets Measured at Level 3
Unquoted Freehold Unquoted Freehold
Equity Land and Equity Land and
Securities Buildings Securities Buildings
Rs 000 Rs 000 Rs 000 Rs 000
Balance as at 1st January 2021 34,349 5,840,964 34,405 10,311,483

Additions - 17,321 - 17,321
Gains/losses recognised in other comprehensive income
Gain from mark to market valuation (Note 27.6) 38,580 - 38,580 -
Sale of equity shares in SWIFT (13,268) - (13,268) -
([FKDQJHUDWHGL΍HUHQFHV 100 - 100 -
*DLQ ORVV UHFRJQLVHGLQSURȴWRUORVV
Depreciation of buildings - (46,363) (164,486)
Transfer from capital work in progress - - 1,372,585
Transfer to level 2 (30,517) - (30,517) -
Balance as at 31st December 2021 29,244 5,811,922 29,300 11,536,903
Additions - 49,062 - 53,143
Revaluation surplus 978,718 1,855,410
Gains/losses recognised in other comprehensive income
([FKDQJHUDWHGL΍HUHQFHV 1,080 - 1,080 -
*DLQ ORVV UHFRJQLVHGLQSURȴWRUORVV
Depreciation of buildings - (46,716) - (151,892)
Transfer from capital work in progress - - - 1,473,037
Transfer from level 2 30,517 - 30,517 -
Balance as at 31st December 2022 60,841 6,792,986 60,897 14,766,601

50.5.2 Unobservable Inputs Used In Measuring Fair Value

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under Level 3 of the fair value hierarchy.
Assets Measured at Level 3
Type of Asset Bank Group Valuation 6LJQL΋FDQW Weighted Average Fair Value
Fair Value as at Fair Value as at Technique Unobservable Range of Estimates Measurement
31st December 31st December Inputs for Unobservable Sensitivity to
2022 2022 Inputs Unobservable
Inputs
Rs 000 Rs 000
Property, plant & equipment

- Freehold lands 5,076,153 8,342,253 Market Estimated price Rs 87,500 - *
comparable per perch 18,500,000
method
- Freehold 1,716,833 6,424,348 Income basis Estimated price Rs 3,541 - 22,824 *
buildings per sq.ft
Income basis Estimated rental
value per sq.ft
Bank Rs 18 - 275
Subsidiary Rs 250 - 375
Expected market
rental growth
Bank *
Subsidiary *
Discount rate
Bank **
Subsidiary **
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50.6 Fair Value of Financial Assets and Liabilities Carried at Amortised Cost
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not already recorded at fair value in the Financial Statements.
Assets of which Fair Value Approximates Carrying Value

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YDOXHV7KLVDVVXPSWLRQLVDOVRDSSOLHGWRGHPDQGGHSRVLWVDQGVDYLQJVGHSRVLWVZKLFKGRQRWKDYHDVSHFLȴFPDWXULW\
Fixed Rate Financial Instruments

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ZKHQWKH\ZHUHȴUVWUHFRJQLVHGZLWKFXUUHQWPDUNHWUDWHVIRUVLPLODUȴQDQFLDOLQVWUXPHQWV7KHHVWLPDWHGIDLUYDOXHRIȴ[HGLQWHUHVW
EHDULQJGHSRVLWVLVEDVHGRQGLVFRXQWHGFDVKȵRZVXVLQJSUHYDLOLQJPDUNHWLQWHUHVWUDWHVIRUGHEWVZLWKVLPLODUFUHGLWULVNDQG
maturity. For quoted debt issued, the fair values are determined based on quoted market prices. For variable rate instruments with
Dȴ[HGFUHGLWVSUHDGDQDGMXVWPHQWLVPDGHWRUHȵHFWWKHFKDQJHLQFUHGLWVSUHDGVLQFHWKHLQVWUXPHQWZDVȴUVWUHFRJQLVHG
Variable Rate Financial Instruments

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rate instruments.
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IDLUYDOXHLQWKH)LQDQFLDO6WDWHPHQWV7KLVWDEOHGRHVQRWLQFOXGHWKHIDLUYDOXHVRIQRQȴQDQFLDODVVHWVDQGQRQȴQDQFLDOOLDELOLWLHV

Bank Group
Fair Value Carrying Fair Value Carrying
Value Value
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
AND ANALYSIS
Financial Assets

- loans & advances - 791,005,705 - 791,005,705 811,157,649 - 819,121,483 - 819,121,483 839,976,738
- debt & other instruments 164,475,802 58,100,341 - 222,576,143 278,775,796 169,937,668 58,100,341 - 228,038,009 284,237,662
164,475,802 849,106,046 - 1,013,581,848 1,089,933,445 169,937,668 877,221,824 - 1,047,159,492 1,124,214,400
- due to banks - 11,297,181 - 11,297,181 11,297,181 - 15,174,226 - 15,174,226 15,255,184
GOVERNANCE AND
RISK MANAGEMENT
GXHWRGHSRVLWRUVȴ[HG FHUWLȴFDWHRI
deposits - 735,091,094 - 735,091,094 733,903,165 - 754,033,695 - 754,033,695 753,054,881
- due to debt securities holders - 20,292,758 - 20,292,758 25,259,536 - 27,121,650 - 27,121,650 32,872,261
- 766,681,033 - 766,681,033 770,459,882 - 796,329,571 - 796,329,571 801,182,326
7KHIROORZLQJWDEOHOLVWVWKRVHȴQDQFLDOLQVWUXPHQWVIRUZKLFKWKHLUFDUU\LQJDPRXQWVDUHDUHDVRQDEOHDSSUR[LPDWLRQRIIDLUYDOXHVEHFDXVHIRUH[DPSOHWKH\DUHVKRUW
term in nature or re-priced to current market rates frequently.
Assets Liabilities
Cash & cash equivalents Securities sold under repurchase agreements

Balances with Central Bank of Sri Lanka Savings, demand, call & margin deposits
Placements with banks Due to other borrowers
Reverse repurchase agreements Dividend payable
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INFORMATION
SUPPLEMENTARY

359
360
Bank Group
Fair Value Carrying Fair Value Carrying
Value Value
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Financial Assets
ABOUT

- loans & advances - 762,671,754 - 762,671,754 762,588,294 - 801,145,883 - 801,145,883 795,804,353
- debt & other instruments 208,413,173 69,663,437 - 278,076,610 293,766,967 209,313,415 69,663,437 - 278,976,852 294,667,208
208,413,173 832,335,191 - 1,040,748,364 1,056,355,261 209,313,415 870,809,320 - 1,080,122,735 1,090,471,561
- due to banks - 23,653,247 - 23,653,247 23,653,247 - 31,549,854 - 31,549,854 31,532,293
GXHWRGHSRVLWRUVȴ[HG FHUWLȴFDWHRI
deposits - 525,516,892 - 525,516,892 523,906,488 - 543,001,881 - 543,001,881 540,874,069
- due to debt securities holders - 29,930,988 - 29,930,988 31,006,592 - 36,216,464 - 36,216,464 37,274,207
- 579,101,127 - 579,101,127 578,566,327 - 610,768,199 - 610,768,199 609,680,569
7KHIROORZLQJWDEOHOLVWVWKRVHȴQDQFLDOLQVWUXPHQWVIRUZKLFKWKHLUFDUU\LQJDPRXQWVDUHDUHDVRQDEOHDSSUR[LPDWLRQRIIDLUYDOXHVEHFDXVHIRUH[DPSOHWKH\DUHVKRUW
term in nature or re-priced to current market rates frequently.
Assets Liabilities
Cash & cash equivalents Securities sold under repurchase agreements

Balances with Central Bank of Sri Lanka Savings, demand, call & margin deposits
Placements with banks Due to other borrowers
Reverse repurchase agreements Dividend payable
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STRATEGY REPORT
51 RISK MANAGEMENT
51.1 Introduction
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VXEMHFWWRULVNOLPLWVDQGRWKHUFRQWUROV7KLVSURFHVVRIULVNPDQDJHPHQWLVFULWLFDOWRWKH%DQNȇVFRQWLQXRXVSURȴWDELOLW\DQGHDFK
individual within the Bank is accountable for the risk exposures relating to his or her responsibilities. The Bank is mainly exposed to
Credit Risk, Liquidity Risk, Market Risk and Operational Risk which has been disclosed in this note as summarised below.
Page No.
51.2 Credit Risk 362

51.2.1 Assessment of expected credit losses 363 - 367
51.2.2 Risks on credit-related commitments 367
51.2.3 Collateral and other credit enhancements 368 - 371
51.2.4 Stage-wise movement of loans & advances and commitments & contingencies 372 - 377
&UHGLWTXDOLW\E\FODVVRIȴQDQFLDODVVHWV 378 - 381
&RXQWHUSDUW\ZLVHDQDO\VLVRIGHULYDWLYHȴQDQFLDOLQVWUXPHQWV 382
51.2.7 Analysis of risk concentration 383 - 386
51.2.8 Commitments and contingencies 387
51.3 Liquidity Risk and Funding Management 387

51.3.1 Liquidity ratios 387 - 388
$QDO\VLVRIȴQDQFLDODVVHWVDQGOLDELOLWLHVE\UHPDLQLQJFRQWUDFWXDOPDWXULWLHV 388 - 392
51.3.3 Remaining contractual maturities of commitments and contingencies 393 - 394
51.3.4 Financial assets available to support future funding 395
51.4 Market Risk 396

&ODVVLȴFDWLRQRIȴQDQFLDODVVHWVDQGȴQDQFLDOOLDELOLWLHVVXEMHFWWRPDUNHWULVN 396 - 397
51.4.2 Interest rate risk 398 - 402
51.4.3 Interest rate benchmark reform 403
51.4.4 Currency risk 403 - 404
51.4.5 Equity price risk 405
51.5 Operational Risk 405

51.6 Capital Management 405 - 406
Risk Management Framework

The Board of Directors has overall responsibility for the establishment and oversight of the Bank’s risk management framework.
The Board has delegated its authority to Board Integrated Risk Management Committee (BIRMC) which is responsible for
developing and monitoring Bank’s risk management policies. The Committee comprises of Executive and Non - Executive Directors.
Meetings of BIRMC are held regularly, and the Board of Directors are duly updated of its activities.

51 RISK MANAGEMENT CONTD.
The Bank’s risk management policies are established to identify and analyse the risks faced by the Bank, to set appropriate risk
limits and controls and to monitor adherence to established limits. Risk management policies and systems are reviewed regularly
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environment, in which all employees are assigned and made to understand their respective roles and responsibilities.
Integrated Risk Management Unit

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0DQDJHPHQW7KHΖQWHJUDWHG5LVN0DQDJHPHQW8QLWZKLFKKDVQRUHVSRQVLELOLW\IRUSURȴWRUYROXPHWDUJHWVDFWVDVWKHQGOLQHRI
GHIHQVHDQGUHSRUWVWRWKH&KLHI5LVN2ɝFHU &52 ZKRLQWXUQGLUHFWO\UHSRUWVWRWKH%Ζ50&
Asset/Liability Management Committee (ALCO)

ALCO is chaired by the Managing Director and has representatives from Treasury Department, Credit Departments, Marketing
Department, Finance Department, Strategic Planning Department and Deposit Mobilisation Department. The Executive Director/
&KLHI)LQDQFLDO2ɝFHU&KLHI6WUDWHJ\2ɝFHUDQGWKH&KLHI5LVN2ɝFHUDUHDOVRPHPEHUVRIWKH$/&27KH&RPPLWWHHPHHWV
regularly to monitor and manage the assets & liabilities of the Bank and overall liquidity position to keep the Bank’s liquidity at
healthy levels, whilst satisfying regulatory requirements.
Risk Measurement and Reporting

The Bank’s risks are measured using appropriate techniques based on the type of risk and industry best practices. The Bank also
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are reported to Board Integrated Risk Management Committee (BIRMC) on a periodic basis. Monitoring and controlling risks are
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market environment within which the Bank operates and also the level of risk that the Bank is willing to accept (Risk Appetite).
Risk Mitigation
As part of its overall risk management, the Bank obtains various types of collaterals to mitigate the risk. Details such as nature
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GHYLDWLRQVUHTXLUHVSHFLȴFDSSURYDO+RZHYHUUHVSHFWLYHDSSURYLQJDXWKRULWLHVZRXOGWDNHLQWRDFFRXQWWKHDYDLODELOLW\RIVHFXULW\
only as the secondary source of repayment.
51.2 Credit Risk

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obligations, and arises principally from the Bank’s loans and advances and investments in debt securities. In addition to the credit
risk from direct funding exposures, the Bank would also be exposed to indirect liabilities such as letters of credit, guarantees etc,
which would carry credit risk.
The Bank considers and consolidates all elements of credit risk exposure (such as individual obligor default risk, country and sector
concentration risks) to ensure stringent Credit Risk Management.

51.2.1 Assessment of Expected Credit Losses

51.2.1(a) Analysis of the total impairment for expected credit losses
Bank
Note Stage 1 Stage 2 Stage 3 Total Total

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Cash & cash equivalents 20.2 101,287 - - 101,287 98,181

Placements with banks 22.2 2,555 - - 2,555 393
- loans & advances 25.2 9,917,653 44,751,656 54,294,693 108,964,002 50,518,133
- debt & other instruments 26.3 61,524 18,328,188 275,981 18,665,693 5,970,151
Credit related commitments &
contingencies 45.2 2,128,073 975,413 15,578 3,119,064 2,259,974
Total allowance for expected credit
losses 12,211,092 64,055,257 54,586,252 130,852,601 58,846,832
Group
Note Stage 1 Stage 2 Stage 3 Total Total

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Cash & cash equivalents 20.2 101,327 - - 101,327 98,201

Placements with banks 22.2 2,555 - - 2,555 393
- loans & advances 25.2 9,934,498 45,651,154 57,527,839 113,113,491 54,765,300
- debt & other instruments 26.3 61,524 18,328,188 275,981 18,665,693 5,970,151
Credit related commitments &
contingencies 45.2 2,122,309 975,413 15,578 3,113,300 2,224,118
Total allowance for expected credit
losses 12,222,213 64,954,755 57,819,398 134,996,366 63,058,163
51.2.1(b) Movement of the total allowance for expected credit losses during the period
Bank Group
Note 2022 2021 2022 2021

Rs 000 Rs 000 Rs 000 Rs 000

Net charge for the year 62,168,583 17,050,441 62,296,270 18,504,184
:ULWHR΍GXULQJWKH\HDU 25.2 (1,618,428) (350,619) (1,813,890) (497,652)
Interest income accrued on impaired loans & advances 7.1 (6,278,942) (3,009,971) (6,281,486) (3,027,412)
Other movements 17,734,556 2,442,854 17,737,309 2,448,990
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51.2.1(c) Sensitivity of factors used to determine impairment provisions
Management judgement is involved in the determination of impairment allowance for loans and advances. Key variables such
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MXGJPHQWDQGFKDQJHVLQDQ\VXFKYDULDEOHVFDQUHVXOWLQGL΍HUHQWOHYHOVRILPSDLUPHQWDOORZDQFH7KHIROORZLQJWDEOHV
demonstrate the sensitivity of the impairment allowance of the Bank to the changes in the above variables, as at 31st December
2022 and 31st December 2021.
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[Increase/(Decrease) in impairment provision] HΊHFWRQ
Statement of
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[Increase/
(Decrease) in
RSHUDWLQJSUR΋W
before tax]
Stage 1 Stage 2 Stage 3 Total
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Probability of Default (PD)

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all age buckets 3,083,164 1,388,975 - 4,472,139 (4,472,139)
'HFUHDVHH[LVWLQJ3'E\DFURVV
all age buckets* (2,720,124) (1,382,097) - (4,102,221) 4,102,221
Loss Given Default (LGD)

LQFUHDVH 684,728 1,485,870 1,832,580 4,003,178 (4,003,178)
GHFUHDVH (684,728) (1,485,870) (1,832,580) (4,003,178) 4,003,178
Economic Factor Adjustment (EFA)

ZRUVWFDVHLQFUHDVHZLWKDGHFUHDVHRI
HDFKLQEHVW EDVHFDVHV 84,835 168,862 - 253,697 (253,697)
ZRUVWFDVHGHFUHDVHZLWKDQLQFUHDVHRI
HDFKLQEHVW EDVHFDVHV (84,835) (168,862) - (253,697) 253,697
Property foreclosure period for individually

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Increase by one year - - 3,002,071 3,002,071 (3,002,071)
Decrease by one year** - - (3,543,495) (3,543,495) 3,543,495
Deemed Loss Period

Increase by 1 year (756,375) (1,360,116) (1,636,917) (3,753,408) 3,753,408
Decrease by 1 year** 660,548 1,909,388 2,315,950 4,885,886 (4,885,886)
7KH3'/*'GHFUHDVHLVOLPLWHGWRLIDSSOLFDEOH
(**) Foreclosure period/deemed loss period is capped at one year, if applicable.

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[Increase/(Decrease) in impairment provision] HΊHFWRQ
Statement of
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[Increase/
(Decrease) in
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before tax]
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Probability of Default (PD)

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all age buckets 2,255,143 1,012,908 - 3,268,051 (3,268,051)
'HFUHDVHH[LVWLQJ3'E\DFURVV
all age buckets* (1,635,998) (989,973) - (2,625,971) 2,625,971
Loss Given Default (LGD)

LQFUHDVH 441,794 1,013,468 1,225,960 2,681,222 (2,681,222)
GHFUHDVH (441,794) (1,013,468) (1,225,960) (2,681,222) 2,681,222
Economic Factor Adjustment (EFA)

ZRUVWFDVHLQFUHDVHZLWKDGHFUHDVHRI
HDFKLQEHVW EDVHFDVHV 35,028 84,740 - 119,768 (119,768)
ZRUVWFDVHGHFUHDVHZLWKDQLQFUHDVHRI
HDFKLQEHVW EDVHFDVHV (35,028) (84,740) - (119,768) 119,768
Property foreclosure period for individually

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Increase by one year - - 1,985,909 1,985,909 (1,985,909)
Decrease by one year** - - (1,510,202) (1,510,202) 1,510,202
Deemed Loss Period

Increase by 1 year (107,232) (989,280) (1,148,385) (2,244,897) 2,244,897
Decrease by 1 year** 587,847 1,506,502 1,751,073 3,845,422 (3,845,422)
7KH3'/*'GHFUHDVHLVOLPLWHGWRLIDSSOLFDEOH
(**) Foreclosure period/deemed loss period is capped at one year, if applicable.

51.2.1(d) Sensitivity Analysis: Impact of staging of loans and advances on collective impairment
If all loans and advances currently in stage 2, were moved to stage 1, the ECL provision of the Bank/Group as at 31st December
ZRXOGKDYHUHGXFHGE\DSSUR[LPDWHO\ 7KHWRWDOORDQVDQGDGYDQFHVLQVWDJHDVDWVW'HFHPEHU
amounts to Rs 306 Bn & Rs 322 Bn for the Bank & the Group respectively.
If all loans and advances currently in stage 1, were moved to stage 2, the ECL provision of the Bank/Group as at 31st December
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December 2022 amounts to Rs 513 Bn & Rs 520 Bn for the Bank & the Group respectively. The management believes that a
movement of the entire stage 1 loan portfolio to stage 2 is highly unlikely.
The increase/decrease in impairment has been calculated excluding the allowance for overlay recognised as at the reporting date.
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/RDQVFODVVLȴHGXQGHUVWDJHLQFOXGHVFRQWUDFWXDOO\SDVWGXHORDQVDQGORDQVZKLFKKDYHEHHQVKLIWHGWRVWDJHEDVHGRQWKH
FULWHULDVSHFLȴHGLQWKH1RWH E
Bank

Not Contractually Past Due Total Total
Contractually
Past Due
0 - 30 Days 31 - 60 Days 61 - 90 Days
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Term loans 129,855,696 38,522,784 35,624,833 204,003,313 173,974,726

Overdraft 23,721,183 4,149,683 412,864 28,283,730 21,915,160
Import loans 24,559,936 2,750,331 2,255,310 29,565,577 17,190,127
Others 21,282,491 14,060,183 8,661,501 44,004,175 39,958,857
199,419,306 59,482,981 46,954,508 305,856,795 253,038,870
Group

Not Contractually Past Due Total Total
Contractually
Past Due
0 - 30 Days 31 - 60 Days 61 - 90 Days
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Term loans 129,981,493 40,056,561 36,196,336 206,234,390 175,889,668

Overdraft 23,721,183 4,149,683 412,864 28,283,730 21,915,160
Import loans 24,559,936 2,750,331 2,255,310 29,565,577 17,190,127
Others 29,370,796 17,541,390 11,153,994 58,066,180 54,255,427
207,633,408 64,497,965 50,018,504 322,149,877 269,250,382

51.2.1(f) Overview of rescheduled & restructured loans

An analysis of rescheduled & restructured loans and advances of the Bank/Group which are in stage 2 and stage 3 is given below
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EHHQGHULYHGE\GLVFRXQWLQJIXWXUHUHFRYHU\FDVKȵRZVRIVXFKORDQV
Amortised Cost Impairment for ECL Net Carrying

Stage 2 Stage 3 Total Stage 2 Stage 3 Total Value
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Bank 79,766,655 19,697,052 99,463,707 9,864,929 9,689,727 19,554,656 79,909,051
Group 80,348,798 20,457,659 100,806,457 9,890,261 9,978,570 19,868,831 80,937,626
Amortised Cost Impairment for ECL Net Carrying

Stage 2 Stage 3 Total Stage 2 Stage 3 Total Value
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Bank 67,248,643 14,316,482 81,565,125 4,396,887 5,179,407 9,576,294 71,988,831
Group 67,706,675 15,211,559 82,918,234 4,414,368 5,522,394 9,936,762 72,981,472
51.2.1(g) Overview of rescheduled/restructured loans & advances upgraded during the year
The Bank upgrades rescheduled/restructured loans from stage 3/stage 2 to stage 1 as per the upgrading policy described in
Note 3.4.6.11 of the Financial Statements. During the year the Bank upgraded Rs 5.9 Bn (2021: Rs 15.9 Bn) worth of rescheduled/
restructured loans to stage 1. Due to this upgrade, the impairment provision against these loans decreased by Rs 118 Mn from
Rs 373 Mn as at 31st December 2021 to Rs 255 Mn as at 31st December 2022.
51.2.2 Risks on Credit–related Commitments

The Bank makes available to its customers, guarantees that may require the Bank to make payments on behalf of customers and
enters into commitments to extend credit lines to secure their liquidity needs. Letters of credit and guarantees are commitments to
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and are mitigated by the same control processes and policies.


51.2.3 Collateral and Other Credit Enhancements
51.2.3(a) Net exposure to credit risk
The amount and type of collateral required depends on an assessment of the credit risk of the counterparty. Guidelines are in
place covering the acceptability and valuation of each type of collateral. The main types of collateral obtained are as follows:
For commercial lending: charges over real estate properties, cash, inventory and trade receivables, shares etc.
For retail lending: mortgages over residential properties, motor vehicles, gold etc.
The Bank also obtains guarantees from parent companies as securities against loans granted to their subsidiaries.
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in accordance with the underlying agreement. It is the Bank’s policy to dispose repossessed properties in an orderly manner. The
proceeds are used to recover the outstanding claim.
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deterioration in the quality of the collaterals and other credit enhancements during the reporting period.
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)XUWKHUQRDOORZDQFHIRU(&/KDVEHHQUHFRJQLVHGIRUJRYHUQPHQWVHFXULWLHVGHQRPLQDWHGLQ6UL/DQNDQUXSHHVRWKHUȴQDQFLDO
assets secured by government guarantees, treasury bills and treasury bonds. Except for the above, Group has recognised ECL for
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The following table shows the maximum exposure and net exposure (net of fair value of any collaterals held) to credit risk by class
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Bank

Note Maximum Net Maximum Net
Exposure to Exposure Exposure to Exposure
Credit Risk Credit Risk
Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
Cash & cash equivalents 20 79,263,832 57,496,109 22,981,180 2,980,009
Placements with banks 22 10,929,771 10,929,771 2,739,907 2,739,907
Reverse repurchase agreements 10,072,569 - 2,752,011 -
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 23 44,598 44,598 1,399,119 1,399,119
)LQDQFLDODVVHWVUHFRJQLVHGWKURXJKSURȴWRUORVV
measured at fair value 24 4,641,277 4,641,277 3,907,704 3,907,704
- loans & advances 25 920,121,651 345,476,147 813,106,427 298,739,345
- debt & other instruments 26 297,441,489 295,113,234 299,737,118 296,815,676
comprehensive income 27 32,772,930 32,772,930 43,004,145 43,004,145
Other assets 21,174,017 21,174,017 10,645,606 10,645,606
1,376,462,134 767,648,083 1,200,273,217 660,231,511
Credit related commitment & contingencies 302,539,865 299,801,239 343,786,847 330,796,025

Group

Note Maximum Net Maximum Net
Exposure to Exposure Exposure to Exposure
Credit Risk Credit Risk
Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
Cash & cash equivalents 20 79,445,914 57,526,776 23,125,789 2,989,929
Placements with banks 22 10,929,771 10,929,771 2,739,907 2,739,907
Reverse repurchase agreements 10,299,569 - 4,861,922 -
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 23 44,598 44,598 1,399,119 1,399,119
measured at fair value 24 4,822,395 4,822,395 3,907,704 3,907,704
- loans & advances 25 953,090,229 343,268,545 850,569,653 298,459,511
- debt & other instruments 26 302,903,355 300,575,100 300,637,359 297,715,917
comprehensive income 27 32,772,986 32,772,986 43,004,201 43,004,201
Other assets 22,481,685 22,481,685 11,587,129 11,587,129
1,416,790,502 772,421,856 1,241,832,783 661,803,417
Credit related commitment & contingencies 301,392,746 298,654,120 340,497,141 327,506,320


51.2.3(b) Stage-wise analysis of collateral held against loans & advances
The following table sets out the principal types of collateral held by the Bank/Group against loans and advances. For each loan, the
value of the collateral is capped at the amortised cost of the loan.
Bank Group
As at 31st December 2022 2021 2022 2021
Mix Amortised Mix Amortised Mix Amortised Mix Amortised
Cost Cost Cost Cost
% Rs 000 % Rs 000 % Rs 000 % Rs 000
Stage 1
Cash & cash equivalents 8 40,756,846 7 36,886,021 8 41,158,570 7 37,299,729
Treasury guarantee 3 14,804,676 3 15,672,392 3 14,804,676 3 15,672,392
Gold 13 66,631,470 9 43,782,534 13 66,631,470 9 43,782,534
Motor vehicle 4 18,545,911 5 25,752,393 5 25,823,423 7 35,930,358
Immovable property 23 118,418,944 28 142,534,212 23 118,418,944 28 142,537,236
Other securities* 40 206,401,461 38 186,488,590 39 205,197,935 36 186,126,705
Unsecured 9 47,859,199 10 52,840,551 9 47,859,199 10 52,840,551
100 513,418,507 100 503,956,693 100 519,894,217 100 514,189,505
Stage 2
Cash & cash equivalents 3 10,030,620 3 6,459,534 3 10,079,362 2 6,486,978
Gold - 18,791 - 1,398 - 18,791 - 1,398
Motor vehicle 3 9,385,847 3 8,693,037 7 23,326,151 9 22,908,884
Unsecured 10 29,969,014 14 34,855,843 9 29,969,014 13 34,855,843
100 305,856,795 100 253,038,870 100 322,149,877 100 269,250,382
Stage 3
Cash & cash equivalents - 173,244 1 498,964 - 195,723 1 538,625
Gold 1 1,270,186 - 274,152 1 1,270,186 - 274,152
Motor vehicle 2 2,316,689 2 1,174,859 8 8,525,435 13 8,450,976
Unsecured 12 12,222,359 13 7,018,034 11 12,222,359 10 7,018,034
100 100,846,349 100 56,110,864 100 111,046,135 100 67,129,766
*Other securities include quoted & unquoted shares, lease receivable, inventories, trade receivable, personnel guarantees and
corporate guarantees etc.

F 2ΊVHWWLQJ΋QDQFLDODVVHWV OLDELOLWLHV

)LQDQFLDODVVHWVDQGȴQDQFLDOOLDELOLWLHVDUHR΍VHWDQGWKHQHWDPRXQWLVSUHVHQWHGLQWKH6WDWHPHQWRI)LQDQFLDO3RVLWLRQZKHQWKH
*URXSKDVDOHJDOULJKWWRVHWR΍WKHUHFRJQLVHGDPRXQWVDQGLWLQWHQGVHLWKHUWRVHWWOHRQDQHWEDVLVRUWRUHDOLVHWKHDVVHWDQG
settle the liability simultaneously.
G )LQDQFLDODVVHWV OLDELOLWLHVQRWVXEMHFWWRRΊVHWWLQJ

$PRXQWVWKDWGRQRWTXDOLI\IRUR΍VHWWLQJLQFOXGHQHWWLQJDUUDQJHPHQWVWKDWRQO\SHUPLWRXWVWDQGLQJWUDQVDFWLRQVZLWKWKHVDPH
FRXQWHUSDUW\WREHR΍VHWLQDQHYHQWRIGHIDXOWRURFFXUUHQFHRIRWKHUSUHGHWHUPLQHGHYHQWV6XFKQHWWLQJDUUDQJHPHQWVLQFOXGH
repurchase arrangements and other similar secured lending and borrowing arrangements.
7KHDPRXQWRIWKHȴQDQFLDOFROODWHUDOUHFHLYHGRUSOHGJHGVXEMHFWWRQHWWLQJDUUDQJHPHQWVEXWQRWTXDOLȴHGIRUR΍VHWWLQJDUH
disclosed below:
Bank

Gross Amount Net Gross Amount Net
Amount Subject to Amount Amount Subject to Amount
Netting Netting
but do not but do not
Qualify for Qualify for
2ΊVHWWLQJ 2ΊVHWWLQJ
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
Loans & advances 61,473,331 50,960,710 10,512,621 53,163,756 43,844,519 9,319,237
agreements 2,283,291 2,283,291 - 4,157,662 4,157,662 -
Group

Gross Amount Net Gross Amount Net
Amount Subject to Amount Amount Subject to Amount
Netting Netting
but do not but do not
Qualify for Qualify for
2ΊVHWWLQJ 2ΊVHWWLQJ
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
Loans & advances 62,008,191 51,433,655 10,574,536 53,746,782 44,325,332 9,421,450
agreements 2,283,291 2,283,291 - 4,157,662 4,157,662 -


51.2.4 Stage-wise movement of loans & advances and commitments & contingencies
51.2.4(a) Stage-wise movement of gross carrying values of loans and advance
Changes in the gross carrying amount of loans and advances during the period that contributed to the changes in impairment
provisions is given below:
Bank

Subject to Subject to Lifetime Subject to
12-month ECL ECL but not Lifetime ECL Credit
Credit Impaired Impaired
Rs 000 Rs 000 Rs 000 Rs 000
Balance as at 1st January 2021 533,294,217 165,663,708 59,984,365 758,942,290

&XUUHQWVWDJHRIQHZȴQDQFLDODVVHWVRULJLQDWHG 207,179,365 78,540,067 - 285,719,432
Changes in the gross carrying amount
- Transfer to stage 1 20,131,596 (25,462,543) (490,315) (5,821,262)
- Transfer to stage 2 (90,462,991) 79,794,470 (3,439,872) (14,108,393)
- Transfer to stage 3 (1,018,743) (3,627,699) 3,983,403 (663,039)
Financial assets that have been derecognised (165,166,751) (56,155,811) (7,731,146) (229,053,708)
:ULWHR΍GXULQJWKH\HDU - - (350,619) (350,619)
&KDQJHVWRFRQWUDFWXDOFDVKȵRZVGXHWRPRGLȴFDWLRQV - 14,286,678 4,155,048 18,441,726
Balance as at 31st December 2021 503,956,693 253,038,870 56,110,864 813,106,427

- Transfer to stage 3 (6,645,351) (25,891,405) 36,479,100 3,942,344
:ULWHR΍GXULQJWKH\HDU (1,618,428) (1,618,428)
Group

Subject to Subject to Lifetime Subject to
12-month ECL ECL but not Lifetime ECL
Credit Impaired Credit Impaired
Rs 000 Rs 000 Rs 000 Rs 000


- Transfer to stage 1 25,198,817 (27,122,680) (1,152,011) (3,075,874)
:ULWHR΍VGXULQJWKH\HDU - - (1,813,890) (1,813,890)

51.2.4(b) Stage-wise movement of Impairment for loans and advances

0RUHLQIRUPDWLRQDERXWWKHVLJQLȴFDQWFKDQJHVLQWKHLPSDLUPHQWIRUORDQVDQGDGYDQFHVGXULQJWKHSHULRGLVSURYLGHGLQWKH
tables below:
Bank

12-month ECL Lifetime ECL Lifetime ECL
but not Credit Credit Impaired
Impaired
Rs 000 Rs 000 Rs 000 Rs 000

Net impairment charge for the year due to:
1HZȴQDQFLDODVVHWVRULJLQDWHG 1,742,537 5,773,900 - 7,516,437
- Transfer to stage 1 332,655 (933,403) (226,091) (826,839)
- Transfer to stage 2 (788,258) 5,625,083 (988,019) 3,848,806
- Transfer to stage 3 (7,486) (970,416) 1,636,193 658,291
Net remeasurement of impairment 572,093 1,010,729 2,498,051 4,080,873
Financial assets that have been derecognised (987,284) (1,929,919) (2,517,195) (5,434,398)
&KDQJHVWRFRQWUDFWXDOFDVKȵRZVGXHWR
PRGLȴFDWLRQV - 1,187,795 1,677,861 2,865,656
Interest accrued on impaired loans & advances - - (3,009,971) (3,009,971)
Other movements - - 2,442,854 2,442,854

- Transfer to stage 1 910,530 (1,082,226) (151,292) (322,988)
- Transfer to stage 3 (185,133) (3,954,849) 19,133,883 14,993,901
Net remeasurement of impairment 3,707,286 7,839,694 5,320,563 16,867,543
Financial assets that have been derecognised (1,415,689) (6,502,473) (455,809) (8,373,971)
PRGLȴFDWLRQV - 10,482,900 5,504,012 15,986,912
:ULWHR΍GXULQJWKH\HDU - - (1,618,428) (1,618,428)
Other movements 276,065 3,726,189 7,997,095 11,999,349


Group

Impaired
Rs 000 Rs 000 Rs 000 Rs 000

- Transfer to stage 1 343,794 (944,456) (226,177) (826,839)
- Transfer to stage 2 (814,775) 5,675,603 (1,012,022) 3,848,806
Net remeasurement of impairment 567,442 1,077,913 3,223,004 4,868,359
PRGLȴFDWLRQV - 1,194,653 1,693,107 2,887,760
Other movements - - 2,448,990 2,448,990

- Transfer to stage 1 1,009,691 (1,131,505) (201,174) (322,988)
Net remeasurement of impairment 3,707,413 7,850,780 5,357,800 16,915,993
PRGLȴFDWLRQV - 10,482,900 5,503,583 15,986,483
:ULWHR΍GXULQJWKH\HDU - - (1,813,890) (1,813,890)
Other movements 276,065 3,726,189 7,999,848 12,002,102

51.2.4(c) Stage-wise movement of gross carrying values of credit related commitments and contingencies
Changes in the gross carrying amount of credit related commitments and contingencies during the period that contributed to
changes in impairment provision, is given below:
Bank

Subject to Subject to Subject to
Impaired
Rs 000 Rs 000 Rs 000 Rs 000

Current stage of new commitments originated 76,380,401 10,574,128 - 86,954,529
- Transfer to stage 1 10,589,196 (10,199,359) (118,359) 271,478
- Transfer to stage 2 (19,109,842) 19,319,312 (163,903) 45,567
- Transfer to stage 3 (36,620) (194,437) 791,552 560,495
Amounts that have been derecognised (56,930,386) (10,129,022) (1,323,837) (68,383,245)

- Transfer to stage 1 16,867,260 (12,753,409) (187,620) 3,926,231
- Transfer to stage 2 (27,463,269) 30,703,421 (72,171) 3,167,981
- Transfer to stage 3 (147,756) (2,370,561) 2,081,430 (436,887)
Amounts that have been derecognised (75,839,569) (16,419,553) (611,834) (92,870,956)
Group

Impaired
Rs 000 Rs 000 Rs 000 Rs 000

- Transfer to stage 1 10,589,196 (10,199,359) (118,359) 271,478
- Transfer to stage 2 (19,109,842) 19,319,312 (163,903) 45,567
- Transfer to stage 3 (36,620) (194,437) 791,552 560,495
Amounts that have been derecognised (54,120,542) (10,129,022) (1,323,837) (65,573,401)

- Transfer to stage 1 16,867,260 (12,753,409) (187,620) 3,926,231
- Transfer to stage 2 (27,463,269) 30,703,421 (72,171) 3,167,981
- Transfer to stage 3 (147,756) (2,370,561) 2,081,430 (436,887)
Amounts that have been derecognised (75,869,300) (16,419,553) (611,834) (92,900,687)


51.2.4(d) Stage-wise movement of impairment for credit related commitments and contingencies
0RUHLQIRUPDWLRQDERXWWKHVLJQLȴFDQWFKDQJHVLQWKHLPSDLUPHQWIRUFUHGLWUHODWHGFRPPLWPHQWVDQGFRQWLQJHQFLHVGXULQJWKH
period is provided in the tables below:
Bank

Impaired
Rs 000 Rs 000 Rs 000 Rs 000
Balance as at 1st January 2021 1,155,451 348,123 182,232 1,685,806

New commitments originated 136,776 107,044 - 243,820
- Transfer to stage 1 6,947 (19,414) - (12,467)
- Transfer to stage 2 (42,717) 262,725 (12,888) 207,120
- Transfer to stage 3 (35) - 15,578 15,543
Net remeasurement of impairment 323,906 29,961 169,937 523,804
Amounts that have been derecognised (274,731) (109,577) (19,344) (403,652)
Balance as at 31st December 2021 1,305,597 618,862 335,515 2,259,974

- Transfer to stage 2 (46,647) 306,532 - 259,885
- Transfer to stage 3 (608) (4,370) 4,978 -
Net remeasurement of impairment 721,148 214,159 - 935,307

Group

Impaired
Rs 000 Rs 000 Rs 000 Rs 000

- Transfer to stage 2 (42,717) 262,725 (12,888) 207,120
- Transfer to stage 3 (35) - 15,578 15,543
Net remeasurement of impairment 323,906 29,961 169,937 523,804

- Transfer to stage 2 (46,647) 306,532 - 259,885
- Transfer to stage 3 (608) (4,370) 4,978 -
Net remeasurement of impairment 718,534 214,159 - 932,693
H 6WDJHZLVHPRYHPHQWRIJURVVFDUU\LQJYDOXHVRIRWKHU΋QDQFLDODVVHWV
Due to the ongoing restructuring of foreign currency denominated government debts, the Bank transferred all such securities
IURPVWDJHWRVWDJHLQ6LQFHWKHUHVWUXFWXULQJDQQRXQFHPHQWWKHJRYHUQPHQWR΍HUHGWRVHWWOH6/'%VLQORFDOFXUUHQF\
by issuing treasury bills/bonds etc, which the Bank has accepted, allowing it to reduce the SLDB portfolio during the year. As a
result, the Bank's total investment in FCY denominated government securities decreased to USD 218 Mn as at 31st December
86'0Q 2WKHUWKDQWKHDERYHQRRWKHUPDWHULDOVWDJHPRYHPHQWVZHUHUHFRUGHGLQRWKHUȴQDQFLDODVVHWV
during the year.


51.2.5 Credit Quality by Class of Financial Assets
7KHWDEOHVEHORZVKRZWKHFUHGLWTXDOLW\E\WKHFODVVRIDVVHWIRUDOOȴQDQFLDODVVHWVH[SRVHGWRFUHGLWULVNEDVHGRQWKHLQWHUQDO
FUHGLWUDWLQJVIRUORDQVDQGDGYDQFHVDQGEDVHGRQH[WHUQDOFUHGLWUDWLQJVIRURWKHUȴQDQFLDODVVHWV
(a) Bank
High Grade Standard Grade Sub -Standard Grade
Stage 1 Stage 2 Stage 3 Exposures Stage 1 Stage 2 Stage 3 Exposures Stage 1 Stage 2 Stage 3 Exposures
not subject not subject not subject
to ECL to ECL to ECL

Financial Assets
Cash & cash equivalents 57,360,922 - - 21,767,723 19,636 - - - - - - -
Balances with CBSL - - - 31,579,185 - - - - - - - -
Placements with banks 10,929,771 - - - - - - - - - - -
Reverse repurchase
agreements 10,072,569 - - - - - - - - - - -
'HULYDWLYHȴQDQFLDO
instruments - - - 44,404 - - - 194 - - - -
Financial assets - FVPL - - - 4,641,277 - - - - - - - -
Financial assets at
amortised cost
- loans & advances 303,580,177 91,196,965 - - 123,562,263 187,386,974 34,046,236 - 621,874 21,430,746 3,778,016 -
- debt & other
instruments 214,076,008 - - - 2,439,592 - - - 490,744 78,994,873 - -
Financial assets - FVOCI 27,369,187 - - - - - - - - 671,756 - -
Other assets - - - - - - - - - - - -
Total 623,388,634 91,196,965 - 58,032,589 126,021,491 187,386,974 34,046,236 194 1,112,618 101,097,375 3,778,016 -
Credit related
commitments &
contingencies 153,199,925 21,772,701 - - 62,595,060 36,898,759 2,175,165 - 181,820 888,611 116,743 -

Financial Assets
Cash & cash equivalents 2,679,353 - - 20,001,171 7,008 - - - 293,648 - - -
Reverse repurchase
agreements 2,752,011 - - - - - - - - - - -
'HULYDWLYHȴQDQFLDO
instruments - - - 1,352,198 - - - 30,998 - - - -
Financial assets at
amortised cost
- loans & advances 294,422,933 63,023,885 - - 145,545,256 156,203,364 6,781,664 - 2,325,128 23,999,046 1,910,388 -
- debt & other
instruments 296,626,505 - - - 2,001,643 - - - - - - -
Financial assets - FVOCI 38,493,233 - - - - - - - - - - -
Other assets - - - - - - - - - - - -
Total 637,713,942 63,023,885 - 56,135,629 147,553,907 156,203,364 6,781,664 30,998 2,618,776 23,999,046 1,910,388 -
Credit related
commitments &
contingencies 190,747,235 19,751,803 - - 72,423,070 31,930,746 588,762 - 1,448,441 854,308 80,701 -

Low Grade Unrated Exposures not subject to Rating
Stage 1 Stage 2 Stage 3 Exposures Stage 1 Stage 2 Stage 3 Exposures Stage 1 Stage 2 Stage 3 Exposures Total
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
115,551 - - - - - - - - - - - 79,263,832
- - - - - - - - - - - - 31,579,185
- - - - - - - - - - - - 10,929,771
- - - - - - - - - - - - 10,072,569
- - - - - - - - - - - - 44,598
- - - - - - - - - - - - 4,641,277
212,725 4,841,152 60,697,259 - 85,367,057 1,000,958 2,324,838 - 74,411 - - - 920,121,651
- - 21,197 - 1,164,291 - 254,784 - - - - - 297,441,489

- - - - - - - 4,731,987 - - - - 32,772,930
- - - - - - - - 21,174,017 - - - 21,174,017
328,276 4,841,152 60,718,456 - 86,531,348 1,000,958 2,579,622 4,731,987 21,248,428 - - - 1,408,041,319
25,114 34,526 114,048 - 24,107,192 430,201 - - - - - - 302,539,865
- - - - - - - - - - - - 22,981,180
- - - - - - - - - - - - 30,874,556
- - - - - - - - - - - - 2,739,907
- - - - - - - - - - - - 2,752,011
- - - - - - - 15,923 - - - - 1,399,119
- - - - - - - - - - - - 3,907,704
659,342 9,181,941 46,151,492 - 60,989,833 630,634 1,263,506 - 14,201 - 3,814 - 813,106,427
- - 283,350 - 825,620 - - - - - - - 299,737,118

- - - - - - - 4,510,912 - - - - 43,004,145
- - - - - - - - 10,645,606 - - - 10,645,606
659,342 9,181,941 46,434,842 - 61,815,453 630,634 1,263,506 4,526,835 10,659,807 - 3,814 - 1,231,147,773
222,625 348,002 526,688 - 24,414,596 449,870 - - - - - - 343,786,847


(b) Group
High Grade Standard Grade Sub -Standard Grade
Stage 1 Stage 2 Stage 3 Exposures Stage 1 Stage 2 Stage 3 Exposures Stage 1 Stage 2 Stage 3 Exposures

Financial Assets
Cash & cash equivalents 57,391,552 - - 21,919,138 19,673 - - - - - - -
Reverse repurchase
agreements 10,299,569 - - - - - - - - - - -
'HULYDWLYHȴQDQFLDO
instruments - - - 44,404 - - - 194 - - - -
Financial assets at
amortised cost
- loans & advances 297,154,177 91,196,965 - - 123,562,263 187,386,974 34,046,236 - 621,874 21,430,746 3,778,016 -
- debt & other
instruments 219,537,874 - - - 2,439,592 - - - 490,744 78,994,873 - -
Financial assets - FVOCI 27,369,187 - - - - - - - - 671,756 - -
Other assets - - - - - - - - - - - -
Total 622,682,130 91,196,965 - 58,204,298 126,021,528 187,386,974 34,046,236 194 1,112,618 101,097,375 3,778,016 -
Credit related
commitments &
contingencies 152,038,339 21,772,701 - - 62,595,060 36,898,759 2,175,165 - 181,820 888,611 116,743 -

Financial Assets
Cash & cash equivalents 2,689,235 - - 20,135,860 7,046 - - - 293,648 - - -
Reverse repurchase
agreements 4,861,922 - - - - - - - - - - -
'HULYDWLYHȴQDQFLDO
instruments - - - 1,352,198 - - - 30,998 - - - -
Financial assets at
amortised cost
- loans & advances 293,350,234 60,183,139 - - 145,545,256 156,203,364 6,781,664 - 2,325,128 23,999,046 1,910,388 -
- debt & other
instruments 297,526,746 - - - 2,001,643 - - - - - - -
Financial assets - FVOCI 38,493,233 - - - - - - - - - - -
Other assets - - - - - - - - - - - -
Total 639,661,277 60,183,139 - 56,270,318 147,553,945 156,203,364 6,781,664 30,998 2,618,776 23,999,046 1,910,388 -
Credit related
commitments &
contingencies 187,413,331 19,751,803 - - 72,423,070 31,930,746 588,762 - 1,448,441 854,308 80,701 -

Low Grade Unrated Exposures not subject to Rating
Stage 1 Stage 2 Stage 3 Exposures Stage 1 Stage 2 Stage 3 Exposures Stage 1 Stage 2 Stage 3 Exposures Total
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
115,551 - - - - - - - - - - - 79,445,914
- - - - - - - - - - - - 31,579,185
- - - - - - - - - - - - 10,929,771
- - - - - - - - - - - - 10,299,569
- - - - - - - - - - - - 44,598
- - - - - - - 160,824 - - - - 4,822,395
212,725 4,841,152 60,697,259 - 98,268,767 17,294,040 12,524,624 - 74,411 - - - 953,090,229
- - 21,197 - 1,164,291 - 254,784 - - - - - 302,903,355

- - - - - - - 4,732,043 - - - - 32,772,986
- - - - - - - - 22,481,685 - - - 22,481,685
328,276 4,841,152 60,718,456 - 99,433,058 17,294,040 12,779,408 4,892,867 22,556,096 - - - 1,448,369,687
25,114 34,526 114,048 - 24,121,659 430,201 - - - - - - 301,392,746
- - - - - - - - - - - - 23,125,789
- - - - - - - - - - - - 30,874,556
- - - - - - - - - - - - 2,739,907
- - - - - - - - - - - - 4,861,922
- - - - - - - 15,923 - - - - 1,399,119
- - - - - - - - - - - - 3,907,704
659,342 9,181,941 46,151,492 - 72,295,344 19,682,892 12,282,408 - 14,201 - 3,814 - 850,569,653
- - 283,350 - 825,620 - - - - - - - 300,637,359

- - - - - - - 4,510,968 - - - - 43,004,201
- - - - - - - - 11,587,129 - - - 11,587,129
659,342 9,181,941 46,434,842 - 73,120,964 19,682,892 12,282,408 4,526,891 11,601,330 - 3,814 - 1,272,707,339
222,625 348,002 526,688 - 24,458,794 449,870 - - - - - - 340,497,141

382
51.2.6 Counterparty-wise Analysis of Derivative Financial Instruments

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Bank & Group
As at 31st December 2022 Type of derivative

SPOT Forward SWAP Total
Notional Gain/Loss Notional Gain/Loss Notional Gain/Loss Notional Gain/Loss
amount amount amount amount
ABOUT

'HULYDWLYH΋QDQFLDODVVHWV
- with banks - - - - 5,020,107 30,439 5,020,107 30,439
- with other customers - - 1,713,898 14,159 - - 1,713,898 14,159
7RWDOGHULYDWLYH΋QDQFLDODVVHWV - - 1,713,898 14,159 5,020,107 30,439 6,734,005 44,598
'HULYDWLYH΋QDQFLDOOLDELOLWLHV
- with banks - - 966,100 2,970 5,881,131 1,435,157 6,847,231 1,438,127
- with other customers 1,335,740 11,266 - - - - 1,335,740 11,266
7RWDOGHULYDWLYH΋QDQFLDOOLDELOLWLHV 1,335,740 11,266 966,100 2,970 5,881,131 1,435,157 8,182,971 1,449,393
Bank & Group

As at 31st December 2021 Type of derivative

SPOT Forward SWAP Total
Notional Gain/Loss Notional Gain/Loss Notional Gain/Loss Notional Gain/Loss
amount amount amount amount
'HULYDWLYH΋QDQFLDODVVHWV
- with banks 856,386 888 - - 21,619,386 947,959 22,475,772 948,847
- with other customers - - 7,018,050 450,272 - - 7,018,050 450,272
7RWDOGHULYDWLYH΋QDQFLDODVVHWV 856,386 888 7,018,050 450,272 21,619,386 947,959 29,493,822 1,399,119
'HULYDWLYH΋QDQFLDOOLDELOLWLHV
- with banks 204,399 88 - - 19,722,478 604,362 19,926,877 604,450
- with other customers 80,034 3,473 - - - - 80,034 3,473
7RWDOGHULYDWLYH΋QDQFLDOOLDELOLWLHV 284,433 3,561 - - 19,722,478 604,362 20,006,911 607,923
STRATEGY REPORT
51.2.7 Analysis of Risk Concentration

By setting various concentration limits (i.e. single borrower/group, industry, product, country/region etc), the Bank/Group ensures
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periodically reviewed at management and Board level to capture the developments in the macro economy, both locally and globally.
The exposure to credit risk based on the geographical concentration and industry/sector concentration is given below, for each item
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51.2.7.1 Geographical Concentration

(a) Bank

Sri Lanka Overseas Total Sri Lanka Overseas Total
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
Cash & cash equivalents 23,728,423 55,434,122 79,162,545 20,549,533 2,333,466 22,882,999
Balances with Central Bank of
Sri Lanka 31,579,185 - 31,579,185 30,874,556 - 30,874,556
Placements with banks 3,038,614 7,888,602 10,927,216 - 2,739,514 2,739,514
Reverse repurchase agreements 10,072,569 - 10,072,569 2,752,011 - 2,752,011
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 44,598 - 44,598 1,298,127 100,992 1,399,119
Financial assets recognised through
SURȴWRUORVVPHDVXUHGDWIDLUYDOXH 4,641,277 - 4,641,277 3,907,704 - 3,907,704
- loans & advances * 767,958,543 43,199,106 811,157,649 736,177,173 26,411,121 762,588,294
- debt & other instruments 278,775,796 - 278,775,796 293,766,967 - 293,766,967
Financial assets - fair value through
other comprehensive income 28,068,871 4,704,059 32,772,930 38,521,161 4,482,984 43,004,145
Other assets 18,874,273 2,299,744 21,174,017 10,338,262 307,344 10,645,606
Total 1,166,782,149 113,525,633 1,280,307,782 1,138,185,494 36,375,421 1,174,560,915
* Provincial breakdown for loans & advances within Sri Lanka
Province Bank
2022 2021
Rs 000 Rs 000
Central 48,150,531 48,325,687

Eastern 15,950,682 15,882,634
North Central 17,247,319 17,605,488
North Western 34,396,408 35,612,843
Northern 12,298,883 13,007,687
Sabaragamuwa 15,751,805 15,927,258
Southern 34,580,093 33,081,532
Uva 12,890,951 13,900,383
Western 576,691,871 542,833,661
Total 767,958,543 736,177,173


(b) Group

Sri Lanka Overseas Total Sri Lanka Overseas Total
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
Cash & cash equivalents 23,910,465 55,434,122 79,344,587 20,694,122 2,333,466 23,027,588
Balances with Central Bank of
Sri Lanka 31,579,185 - 31,579,185 30,874,556 - 30,874,556
Placements with banks 3,038,614 7,888,602 10,927,216 - 2,739,514 2,739,514
- loans & advances * 796,777,632 43,199,106 839,976,738 769,393,232 26,411,121 795,804,353
- debt & other instruments 284,237,662 - 284,237,662 294,667,208 - 294,667,208
Other assets 20,181,941 2,299,744 22,481,685 11,279,785 307,344 11,587,129
Total 1,202,960,988 113,525,633 1,316,486,621 1,175,497,873 36,375,421 1,211,873,294
* Provincial breakdown for loans & advances within Sri Lanka
Province Group
2022 2021
Rs 000 Rs 000
Central 53,134,699 53,295,484

Eastern 19,209,519 19,353,335
North Central 18,752,180 19,151,578
North Western 37,956,594 39,547,602
Northern 13,520,959 14,075,996
Sabaragamuwa 17,888,319 18,237,434
Southern 37,164,457 35,697,232
Uva 13,360,631 14,431,888
Western 585,790,274 555,602,683
Total 796,777,632 769,393,232

51.2.7.2 Industry/sector concentration
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(a) Bank - as at 31st December 2022
Agriculture & Manufacturing Tourism Transport Construction Infrastructure Traders Banks, Other Consumers Total
Related Financial Services
& Business
Services
AND ANALYSIS
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
Cash & cash equivalents - - - - - - - 79,162,545 - - 79,162,545
Balances with Central Bank of Sri Lanka - - - - - - - 31,579,185 - - 31,579,185
Placements with banks - - - - - - - 10,927,216 - - 10,927,216
Reverse repurchase agreements - - - - - - - 10,072,569 - - 10,072,569
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 1,181 - - - - - 195 30,438 12,784 - 44,598
or loss - measured at fair value - - - - - - - 4,641,277 - - 4,641,277
GOVERNANCE AND
RISK MANAGEMENT
- loans & advances 72,658,697 139,039,865 70,365,368 7,350,207 93,464,271 48,530,831 105,843,874 66,885,698 78,224,295 128,794,543 811,157,649
- debt & other instruments - - - - - 2,442,667 - 276,333,129 - - 278,775,796
other comprehensive income - - - - - - - 32,772,930 - - 32,772,930
Other assets - - - - - - - 20,548,182 625,835 - 21,174,017
Total 72,659,878 139,039,865 70,365,368 7,350,207 93,464,271 50,973,498 105,844,069 532,953,169 78,862,914 128,794,543 1,280,307,782
(b) Bank - as at 31st December 2021
& Business
Services
Financial Assets
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV - - - - - - - 948,847 450,272 - 1,399,119
INFORMATION

SUPPLEMENTARY

- loans & advances 77,833,246 89,875,576 64,477,696 9,446,659 99,048,382 47,658,393 119,928,804 69,195,294 68,897,472 116,226,772 762,588,294
comprehensive income - - - - - - - 43,004,145 - - 43,004,145
Other assets - - - - - - - 10,013,784 631,822 - 10,645,606

385
Total 77,833,246 89,875,576 64,477,696 9,446,659 99,048,382 48,926,904 119,928,804 478,817,310 69,979,566 116,226,772 1,174,560,915
386
(c) Group - as at 31st December 2022
& Business
Services
Financial Assets
ABOUT

'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 1,181 - - - - - 195 30,438 12,784 - 44,598
- loans & advances 75,621,565 141,749,399 71,040,990 10,082,732 93,651,246 50,304,132 110,797,893 62,308,609 93,769,648 130,650,524 839,976,738
other comprehensive income - - - - - - - 32,772,986 - - 32,772,986
Other assets - - - - - - - 20,548,185 1,933,500 - 22,481,685
Total 75,622,746 141,749,399 71,040,990 10,082,732 93,651,246 52,746,799 110,798,088 534,428,165 95,715,932 130,650,524 1,316,486,621
(d) Group - as at 31st December 2021
& Business
Services
Financial Assets
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV - - - - - - - 948,847 450,272 - 1,399,119
- loans & advances 81,315,811 92,977,594 65,509,095 12,560,822 99,553,955 49,448,434 125,660,552 67,470,830 77,483,028 123,824,232 795,804,353
STRATEGY REPORT

comprehensive income - - - - - - - 43,004,201 - - 43,004,201
Other assets - - - - - - - 10,013,784 1,573,345 - 11,587,129
Total 81,315,811 92,977,594 65,509,095 12,560,822 99,553,955 50,716,945 125,660,552 480,247,643 79,506,645 123,824,232 1,211,873,294
51.2.8 Commitments and Contingencies

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obligations may not be recognised in the Statement of Financial Position, they do contain credit risk and are, therefore, part of the
overall risk of the Bank.
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if the guarantee is called upon. The maximum exposure to credit risk relating to a loan commitment is the full amount of the
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Statement of Financial Position. The Bank's maximum credit risk exposure to commitments and contingencies are disclosed in
Notes to the Financial Statements.
51.3 Liquidity Risk and Funding Management

The Bank manages liquidity risk, in accordance with regulatory guidelines and industry best practices. The objective of the Bank’s
liquidity and funding framework is to ensure that funding commitments and deposit withdrawals can be met when due and market
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A board approved liquidity policy to manage liquidity on a day-to-day basis and a contingency funding plan to deal with crisis
situations are in place. Contractual and behavioural maturity of assets and liabilities, key liquidity ratios and monthly liquidity
forecasts and gaps are reviewed at Assets and Liability Committee (ALCO) meetings. The main sources of the Bank’s funding are
core deposits from retail and commercial clients, wholesale deposits and access to borrowed funds from the interbank money
market. The Bank also maintains a portfolio of readily marketable securities to further strengthen its liquidity position. Liquidity risk
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to meet daily business requirements and also to deal with a sudden liquidity shock.
51.3.1 Liquidity Ratios

51.3.1(a) Statutory Liquid Assets Ratio (SLAR)
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RIWRWDODGMXVWHGOLDELOLWLHVRQDFRQVROLGDWHGEDVLVIRUWKHRYHUDOOEDQN7KHUHTXLUHPHQWWRPDLQWDLQ6/$5VHSDUDWHO\IRU
'RPHVWLF%DQNLQJ8QLW '%8 DQG2΍VKRUH%DQNLQJ8QLW 2%8 ZDVWHPSRUDULO\GHIHUUHGXQWLOIXUWKHUQRWLFH
For the month of December 2022 2021

% %
SLAR: Bank 27.85 32.62
51.3.1(b) Liquidity Coverage Ratio (LCR)

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deposits) over a 30 day time span, measured by the amount of unencumbered high-quality liquid assets it holds, over and above
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% %
Rupee Liquidity Requirement 200.78 254.89

All Currency Liquidity Requirement 146.53 213.43


51.3.1(c) Net Stable Funding Ratio (NSFR)
This ratio measures the Bank's availability of stable funds against the required funds. NSFR creates an additional incentive for banks
to fund their activities with more stable sources of funding on an ongoing basis, over a longer time horizon.

% %
Net Stable Funding Ratio (NSFR) 157.10 149.92
51.3.1(d) Liquidity Ratios under Stock Approach
%
100 91.1
85.3 89.7
84.1 84.3 83.1 84.1 83.9
75 64.2 64.1 64.2 64.9 65.3

63.6 63.7 61.2
50
36.4 35.4 31.8 32.6 32.1 27.8
22.6 22.6
25
0
Q1 21
Q2 21
Q3 21
Q4 21
Q1 22
Q2 22
Q3 22
Q4 22
Net Loans & Advances/Total Assets Gross Loans & Advances/Customer Deposits SLAR - Bank
51.3.2 Analysis of Financial Assets and Liabilities by Remaining Contractual Maturities

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OLDELOLWLHVDVDWVW'HFHPEHUDQGVW'HFHPEHU$OWKRXJKWKHFDVKRXWȵRZVKDYHEHHQFRQVLGHUHGEDVHGRQWKH
earliest date of repayment, it is believed that most of the customers would not expect the repayments on the earliest possible date.
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Contractual Maturities of Undiscounted Cash Flows of Financial Assets and Financial Liabilities
Up to 3 3 - 12 1 - 3 Years 3 - 5 Years Over 5 Years Total

Months Months
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
Cash & cash equivalents 79,179,816 - - - - 79,179,816
Balances with Central Bank of Sri Lanka 16,780,964 11,778,401 1,630,017 767,031 622,772 31,579,185
Placements with banks 10,971,710 - - - - 10,971,710
Reverse repurchase agreements 10,173,942 - - - - 10,173,942
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 44,027 571 - - - 44,598
SURȴWRUORVVPHDVXUHGDWIDLUYDOXH 4,641,277 - - - - 4,641,277
- loans & advances 302,962,961 222,383,406 235,764,492 132,877,462 167,803,111 1,061,791,432
- debt & other instruments 33,139,671 99,622,560 127,611,836 52,578,242 26,693,748 339,646,057
other comprehensive income 3,504,812 1,976,188 19,927,894 - 7,364,036 32,772,930
Other assets 10,376,832 10,781,025 - - 17,346 21,175,203
Total Financial Assets 471,776,012 346,542,151 384,934,239 186,222,735 202,501,013 1,591,976,150
Due to banks 7,004,426 4,535,672 - - - 11,540,098
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 611,603 837,790 - - - 1,449,393
agreements 826,665 1,574,661 - - - 2,401,326
- due to depositors 585,180,259 466,079,617 56,779,032 35,798,624 19,154,298 1,162,991,830
- due to other borrowers 177,180 3,934,803 2,890,640 1,515,128 2,661,251 11,179,002
- due to debt securities holders 8,941,750 3,998,265 9,053,000 1,080,000 6,540,000 29,613,015
Dividend payable 187,141 - - - - 187,141
Other liabilities 20,746,179 2,229,921 1,412,350 792,337 1,556,787 26,737,574
Total Financial Liabilities 623,675,203 483,190,729 70,135,022 39,186,089 29,912,336 1,246,099,379
Total Net Financial Assets/(Liabilities) (151,899,191) (136,648,578) 314,799,217 147,036,646 172,588,677 345,876,771
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\HDUVSHQGLQJȴQDOLVDWLRQRIWKHGHEWUHVWUXFWXULQJDUUDQJHPHQWZLWKWKHJRYHUQPHQW+RZHYHU6/Ζ6%VDPRXQWLQJ86'0Q
ZKHUHWKHFDSLWDOUHSD\PHQWIDOOLQJDIWHUVW'HFHPEHUKDYHEHHQFODVVLȴHGWRUHVSHFWLYHPDWXULW\EXFNHWVEDVHGRQWKH
contractual due date of the capital repayment.


Months Months
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 296,053 876,666 226,400 - - 1,399,119
- loans & advances 230,751,577 214,257,455 210,560,068 111,838,992 131,536,664 898,944,756
Other assets 3,707,304 6,794,563 24,938 - 123,035 10,649,840
Due to banks 18,626,793 3,880,134 1,381,511 - - 23,888,438
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 184,479 423,444 - - - 607,923
agreements 4,060,239 115,323 - - - 4,175,562
- due to depositors 593,215,711 320,324,492 49,728,297 21,342,533 13,911,514 998,522,547


Months Months
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 44,027 571 - - - 44,598
- loans & advances 317,147,480 232,037,901 249,163,937 135,817,613 164,372,308 1,098,539,239
Other assets 10,427,001 12,026,923 11,601 - 17,346 22,482,871
Due to banks 10,744,808 4,568,040 1,143,638 104,583 - 16,561,069
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 611,603 837,790 - - - 1,449,393
agreements 826,665 1,574,661 - - - 2,401,326




Months Months
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
Reverse repurchase agreements 3,393,300 1,508,366 - - - 4,901,666
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 296,053 876,666 226,400 - - 1,399,119
- loans & advances 243,684,315 225,908,071 227,100,048 117,613,875 131,016,761 945,323,070
Other assets 3,722,865 7,831,871 24,938 - 123,035 11,702,709
Due to banks 23,403,299 4,929,043 3,594,497 317,784 11,442 32,256,065
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 184,479 423,444 - - - 607,923
agreements 4,060,239 115,323 - - - 4,175,562

51.3.3 Remaining Contractual Maturities of Commitments and Contingencies

The tables below illustrate the remaining maturity of the commitments and contingencies based on the contractual expiry dates.
+RZHYHUDOOXQGUDZQGLUHFWDQGLQGLUHFWFRPPLWPHQWVDUHFODVVLȴHGDV2Q'HPDQGEDVHGRQWKHHDUOLHVWGDWHWKRVHFDQEH
drawn down by the customers.
On Demand Less than 3 3 to 12 1 to 5 Years Over Total

Months Months 5 Years
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000

Undrawn - direct credit facilities 150,121,717 - - - - 150,121,717
Undrawn - indirect credit facilities 75,091,183 - - - - 75,091,183
Acceptances 179,224 8,138,598 4,193,422 - - 12,511,244
Documentary credit 940,503 11,981,705 7,653,891 415,405 - 20,991,504
Guarantees 5,329,707 14,501,840 22,304,124 1,687,153 1,393 43,824,217
231,662,334 34,622,143 34,151,437 2,102,558 1,393 302,539,865

Capital commitments 960,985 - - - - 960,985
Operating lease commitments - 27,940 36,465 - - 64,405
Forward & SWAP contracts - 11,387,848 3,529,128 - - 14,916,976
960,985 11,415,788 3,565,593 - - 15,942,366
Total gross commitments & contingencies 232,623,319 46,037,931 37,717,030 2,102,558 1,393 318,482,231
Impairment for expected credit losses - credit
related commitments & contingencies (2,769,394) (132,286) (202,116) (15,255) (13) (3,119,064)
Commitments & contingencies - net of
impairment for expected credit losses 229,853,925 45,905,645 37,514,914 2,087,303 1,380 315,363,167

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000

Acceptances 423,849 19,269,602 20,224,717 1,424 - 39,919,592
Documentary credit 3,684,876 25,019,316 15,098,253 - - 43,802,445
Guarantees 5,069,076 15,625,044 28,493,954 7,583,904 3,348 56,775,326
212,467,285 59,913,962 63,816,924 7,585,328 3,348 343,786,847

Capital commitments 1,010,914 - - - - 1,010,914
Forward & SWAP contracts - 35,308,463 12,776,683 1,415,587 - 49,500,733
1,010,914 35,325,727 12,800,581 1,415,587 - 50,552,809


Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000

Acceptances 179,224 8,138,598 4,193,422 - - 12,511,244
Documentary credit 940,503 11,981,705 7,653,891 415,405 - 20,991,504
Guarantees 5,329,708 14,507,540 22,304,124 1,687,153 1,393 43,829,918
230,509,515 34,627,843 34,151,437 2,102,558 1,393 301,392,746

Capital commitments 960,985 70,153 199,845 - - 1,230,983
Forward & SWAPs contracts - 11,387,848 3,529,128 - - 14,916,976
960,985 11,485,941 3,765,438 - - 16,212,364

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000

Acceptances 423,849 19,269,602 20,224,717 1,424 - 39,919,592
Documentary credit 3,684,876 25,019,316 15,098,253 - - 43,802,445
Guarantees 5,069,076 15,625,044 28,500,154 7,583,904 3,348 56,781,526
209,171,379 59,913,962 63,823,124 7,585,328 3,348 340,497,141

Capital commitments 967,610 167,128 894,977 - - 2,029,715
Forward & SWAPs contracts - 35,308,463 12,776,683 1,415,587 - 49,500,733
967,610 35,492,855 13,695,558 1,415,587 - 51,571,610

51.3.4 Financial assets available to support future funding

Encumbered Unencumbered Encumbered Unencumbered
Pledged as Other Available as Other Total Pledged as Other Available as Other Total
collateral collateral collateral collateral
AND ANALYSIS
Bank
Financial Assets
Cash & cash equivalents - - 79,162,545 - 79,162,545 - - 22,882,999 - 22,882,999
Balances with CBSL - 31,579,185 - - 31,579,185 - 30,874,556 - - 30,874,556
Placements with banks - - 10,927,216 - 10,927,216 - - 2,739,514 - 2,739,514
Reverse repurchase agreements - - 10,072,569 - 10,072,569 - - 2,752,011 - 2,752,011
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV - - - 44,598 44,598 - - - 1,399,119 1,399,119
Financial assets - FVPL - - 4,641,277 - 4,641,277 - - 3,907,704 - 3,907,704
- loans & advances - - 811,157,649 - 811,157,649 - - 762,588,294 - 762,588,294
- debt & other instruments 2,783,782 - 275,992,014 - 278,775,796 4,382,447 - 289,384,520 - 293,766,967
GOVERNANCE AND
RISK MANAGEMENT
Financial assets - FVOCI - - 32,772,930 - 32,772,930 - - 43,004,145 - 43,004,145

Other assets - - - 21,174,017 21,174,017 - - - 10,645,606 10,645,606
Total Financial Assets 2,783,782 31,579,185 1,224,726,200 21,218,615 1,280,307,782 4,382,447 30,874,556 1,127,259,187 12,044,725 1,174,560,915
Group
Financial Assets
Cash & cash equivalents - - 79,344,587 - 79,344,587 - - 23,027,588 - 23,027,588
Balances with CBSL - 31,579,185 - - 31,579,185 - 30,874,556 - - 30,874,556
Placements with banks - - 10,927,216 - 10,927,216 - - 2,739,514 - 2,739,514
Reverse repurchase agreements - - 10,299,569 - 10,299,569 - - 4,861,922 - 4,861,922
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV - - - 44,598 44,598 - - - 1,399,119 1,399,119
Financial assets - FVPL - - 4,822,395 - 4,822,395 - - 3,907,704 - 3,907,704

- loans & advances - - 839,976,738 - 839,976,738 - - 795,804,353 - 795,804,353
- debt & other instruments 2,783,782 - 281,453,880 - 284,237,662 4,382,447 - 290,284,761 - 294,667,208
Financial assets - FVOCI - - 32,772,986 - 32,772,986 - - 43,004,201 - 43,004,201
Other assets - - - 22,481,685 22,481,685 - - - 11,587,129 11,587,129
Total Financial Assets 2,783,782 31,579,185 1,259,597,371 22,526,283 1,316,486,621 4,382,447 30,874,556 1,163,630,043 12,986,248 1,211,873,294
INFORMATION
SUPPLEMENTARY

395
396
51.4 Market Risk

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H[FKDQJHUDWHVFRPPRGLW\SULFHVDQGHTXLW\SULFHV7KH%DQNKDVD%RDUGDSSURYHGWUHDVXU\SROLF\7UHDVXU\PLGGOHRɝFHPRQLWRUVWKH%DQN VFRPSOLDQFHZLWKWKH
above policy and ensures that the Bank's market risk limits are in line with the level of risk acceptable to the Board. The Bank employs a range of tools to monitor and
limit market risk exposure which are discussed below.
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7KHIROORZLQJWDEOHVVHSDUDWHO\LGHQWLI\WKH%DQN*URXS VȴQDQFLDODVVHWVDQGOLDELOLWLHVZKLFKDUHVXEMHFWWRPDUNHWULVNIURPWKHUHVWRIWKHȴQDQFLDODVVHWVDQGȴQDQFLDO
liabilities.
ABOUT

Bank - as at 31st December 2022 2021
Market risk measurement Carrying Market risk measurement Carrying
amount amount
Subject to Not subject to Subject to Not subject to
market risk market risk market risk market risk
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
Cash & cash equivalents - 79,162,545 79,162,545 - 22,882,999 22,882,999
Balances with Central Bank of Sri Lanka - 31,579,185 31,579,185 - 30,874,556 30,874,556
Placements with banks - 10,927,216 10,927,216 - 2,739,514 2,739,514
Reverse repurchase agreements - 10,072,569 10,072,569 - 2,752,011 2,752,011

'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 44,598 - 44,598 1,399,119 - 1,399,119
)LQDQFLDODVVHWVUHFRJQLVHGWKURXJKSURȴWRUORVVPHDVXUHGDWIDLUYDOXH 4,641,277 - 4,641,277 3,907,704 - 3,907,704
- loans & advances - 811,157,649 811,157,649 - 762,588,294 762,588,294
- debt & other instruments - 278,775,796 278,775,796 - 293,766,967 293,766,967

Financial assets - fair value through other comprehensive income 32,772,930 - 32,772,930 43,004,145 - 43,004,145
Other assets - 21,174,017 21,174,017 - 10,645,606 10,645,606
Total Financial Assets 37,458,805 1,242,848,977 1,280,307,782 48,310,968 1,126,249,947 1,174,560,915
Due to banks - 11,297,181 11,297,181 - 23,653,247 23,653,247
'HULYDWLYHVȴQDQFLDOLQVWUXPHQWV 1,449,393 - 1,449,393 607,923 - 607,923
Securities sold under repurchase agreements - 2,283,291 2,283,291 - 4,157,662 4,157,662
- due to depositors - 1,096,099,874 1,096,099,874 - 977,945,952 977,945,952
- due to other borrowers - 9,173,923 9,173,923 - 14,434,115 14,434,115
- due to debt securities holders - 25,259,536 25,259,536 - 31,006,592 31,006,592
STRATEGY REPORT
Dividend payable - 187,141 187,141 - 148,032 148,032

Other liabilities - 24,725,468 24,725,468 - 14,807,819 14,807,819
Total Financial Liabilities 1,449,393 1,169,026,414 1,170,475,807 607,923 1,066,153,419 1,066,761,342
Group - as at 31st December 2022 2021
Market risk measurement Carrying Market risk measurement Carrying
Subject to Not subject to amount Subject to Not subject to amount
market risk market risk market risk market risk
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
AND ANALYSIS
Financial Assets
Cash & cash equivalents - 79,344,587 79,344,587 - 23,027,588 23,027,588
Balances with Central Bank of Sri Lanka - 31,579,185 31,579,185 - 30,874,556 30,874,556
Placements with banks - 10,927,216 10,927,216 - 2,739,514 2,739,514
Reverse repurchase agreements - 10,299,569 10,299,569 - 4,861,922 4,861,922
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 44,598 - 44,598 1,399,119 - 1,399,119
)LQDQFLDODVVHWVUHFRJQLVHGWKURXJKSURȴWRUORVVPHDVXUHGDWIDLUYDOXH 4,822,395 - 4,822,395 3,907,704 - 3,907,704
- loans & advances - 839,976,738 839,976,738 - 795,804,353 795,804,353
- debt & other instruments - 284,237,662 284,237,662 - 294,667,208 294,667,208
Financial assets - fair value through other comprehensive income 32,772,986 - 32,772,986 43,004,201 - 43,004,201
Other assets - 22,481,685 22,481,685 - 11,587,129 11,587,129
GOVERNANCE AND
RISK MANAGEMENT
Total Financial Assets 37,639,979 1,278,846,642 1,316,486,621 48,311,024 1,163,562,270 1,211,873,294
Due to banks - 15,255,184 15,255,184 - 31,532,293 31,532,293
'HULYDWLYHVȴQDQFLDOLQVWUXPHQWV 1,449,393 - 1,449,393 607,923 - 607,923
Securities sold under repurchase agreements - 2,283,291 2,283,291 - 4,157,662 4,157,662
- due to depositors - 1,115,155,879 1,115,155,879 - 994,317,574 994,317,574
- due to other borrowers - 9,173,923 9,173,923 - 14,434,115 14,434,115
- due to debt securities holders - 32,872,261 32,872,261 - 37,274,207 37,274,207
Dividend payable - 187,141 187,141 - 148,032 148,032
Other liabilities - 25,350,978 25,350,978 - 15,628,436 15,628,436

Total Financial Liabilities 1,449,393 1,200,278,657 1,201,728,050 607,923 1,097,492,319 1,098,100,242
INFORMATION
SUPPLEMENTARY

397

51.4.2 Interest Rate Risk
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changes in market interest rates. The Bank manages the interest rate risk against interest rate gap limits, which is supplemented by
PRQLWRULQJWKHVHQVLWLYLW\RIWKH%DQNȇVȴQDQFLDODVVHWVDQGOLDELOLWLHVWRYDULRXVUDWHVFHQDULRV
Interest Rate Sensitivity Analysis

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UDWHUHSULFLQJJDSV7KHȴQDQFLDODVVHWVDQGOLDELOLWLHVDUHLQFOXGHGDWWKHLUFDUU\LQJDPRXQWDQGFDWHJRULVHGE\WKHHDUOLHURIWKH
FRQWUDFWXDOUHȂSULFLQJGDWHRUWKHPDWXULW\GDWH

Up to 3 3 - 12 1 - 3 Years 3 - 5 Years Over 5 Years Non Interest Total

Months Months Sensitive
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
AND ANALYSIS
Cash & cash equivalents 1,907,621 - - - - 77,254,924 79,162,545

Balances with Central Bank of Sri Lanka - - - - - 31,579,185 31,579,185
Placements with banks 10,927,216 - - - - - 10,927,216
Reverse repurchase agreements 10,072,569 - - - - - 10,072,569

'HULYDWLYHȴQDQFLDOLQVWUXPHQWV - - - - - 44,598 44,598
)LQDQFLDODVVHWVUHFRJQLVHGWKURXJKSURȴWRUORVVPHDVXUHGDWIDLUYDOXH 4,641,277 - - - - - 4,641,277
- loans & advances 448,861,586 201,330,528 43,724,719 32,383,706 84,780,130 76,980 811,157,649
- debt & other instruments 38,757,913 81,935,497 93,680,312 43,596,626 20,805,448 - 278,775,796
Financial assets - fair value through other comprehensive income 3,504,812 1,976,188 19,927,894 - 2,632,049 4,731,987 32,772,930
Other assets - - - - - 21,174,017 21,174,017
Total Financial Assets 518,672,994 285,242,213 157,332,925 75,980,332 108,217,627 134,861,691 1,280,307,782
GOVERNANCE AND
RISK MANAGEMENT
Due to banks 7,152,327 3,907,118 - - - 237,736 11,297,181
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV - - - - - 1,449,393 1,449,393
Securities sold under repurchase agreements 821,530 1,461,761 - - - - 2,283,291
- due to depositors 540,908,496 440,224,667 36,567,341 10,519,979 - 67,879,391 1,096,099,874
- due to other borrowers 1,047,236 2,424,579 1,627,969 903,925 3,170,214 - 9,173,923
- due to debt securities holders 8,582,941 3,676,595 7,000,000 - 6,000,000 - 25,259,536
Dividend payable - - - - - 187,141 187,141
Other liabilities - - - - - 24,725,468 24,725,468
Total Financial Liabilities 558,512,530 451,694,720 45,195,310 11,423,904 9,170,214 94,479,129 1,170,475,807
Interest Rate Sensitivity Gap (39,839,536) (166,452,507) 112,137,615 64,556,428 99,047,413 40,382,562 109,831,975
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restructuring arrangement with the government. However, SLISBs amounting USD 80.7 Mn where the capital repayment falling after 31st December 2022, have been
FODVVLȴHGWRUHVSHFWLYHPDWXULW\EXFNHWVEDVHGRQWKHFRQWUDFWXDOGXHGDWHRIWKHFDSLWDOUHSD\PHQW
INFORMATION
SUPPLEMENTARY

399
400

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
Cash & cash equivalents 500,418 - - - - 22,382,581 22,882,999
ABOUT

)LQDQFLDODVVHWVUHFRJQLVHGWKURXJKSURȴWRUORVVPHDVXUHGDWIDLUYDOXH 3,858,578 - - - - 49,126 3,907,704
- loans & advances 425,112,140 237,898,084 35,492,335 18,491,633 45,572,844 21,258 762,588,294
Financial assets - fair value through other comprehensive income 4,776,171 5,031,906 28,192,064 - 493,092 4,510,912 43,004,145
Other assets - - - - - 10,645,606 10,645,606
Due to banks 22,637,684 428,647 - - - 586,916 23,653,247
Securities sold under repurchase agreements 4,047,295 110,367 - - - - 4,157,662

- due to depositors 548,578,184 321,787,833 33,298,718 3,979,477 - 70,301,740 977,945,952
- due to other borrowers 336,972 6,435,278 3,864,947 983,779 2,813,139 - 14,434,115
- due to debt securities holders 1,082,941 6,413,178 17,510,473 - 6,000,000 - 31,006,592

Interest Rate Sensitivity Gap (44,344,838) (32,780,760) 81,436,584 60,650,959 59,406,900 (16,569,272) 107,799,573
STRATEGY REPORT

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
AND ANALYSIS
Cash & cash equivalents 1,907,621 - - - - 77,436,966 79,344,587


)LQDQFLDODVVHWVUHFRJQLVHGWKURXJKSURȴWRUORVVPHDVXUHGDWIDLUYDOXH 4,822,395 - - - - - 4,822,395
- loans & advances 455,550,459 209,628,623 54,337,353 35,437,544 84,619,915 402,844 839,976,738
Financial assets - fair value through other comprehensive income 3,504,812 1,976,188 19,927,894 - 2,632,049 4,732,043 32,772,986
Other assets - - - - - 22,481,685 22,481,685
GOVERNANCE AND
RISK MANAGEMENT
Due to banks 10,743,666 3,982,119 200,004 91,659 - 237,736 15,255,184
Securities sold under repurchase agreements 821,530 1,461,761 - - - - 2,283,291
- due to depositors 543,043,314 453,496,994 38,267,618 12,490,779 2,918 67,854,256 1,115,155,879
- due to other borrowers 1,047,236 2,424,579 1,627,969 903,925 3,170,214 - 9,173,923
- due to debt securities holders 8,847,493 7,535,517 8,989,251 1,500,000 6,000,000 - 32,872,261
Interest Rate Sensitivity Gap (35,965,525) (172,666,525) 118,860,717 64,047,807 98,884,280 41,597,817 114,758,571
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restructuring arrangement with the government. However, SLISBs amounting USD 80.7 Mn where the capital repayment falling after 31st December 2022, have been
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INFORMATION
SUPPLEMENTARY

401
402

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
Cash & cash equivalents 500,418 - - - - 22,527,170 23,027,588
ABOUT
Reverse repurchase agreements 3,391,294 1,470,628 - - - - 4,861,922

)LQDQFLDODVVHWVUHFRJQLVHGWKURXJKSURȴWRUORVVPHDVXUHGDWIDLUYDOXH 3,858,578 - - - - 49,126 3,907,704
- loans & advances 431,914,599 246,616,926 48,169,672 23,340,214 45,445,118 317,824 795,804,353
Financial assets - fair value through other comprehensive income 4,776,171 5,031,906 28,192,064 - 493,092 4,510,968 43,004,201
Other assets - - - - - 11,587,129 11,587,129
Due to banks 30,050,063 503,647 200,000 191,667 - 586,916 31,532,293
Securities sold under repurchase agreements 4,047,295 110,367 - - - - 4,157,662

- due to depositors 553,564,770 331,296,689 34,819,868 4,434,272 1,925 70,200,050 994,317,574
- due to other borrowers 336,972 6,435,278 3,864,947 983,779 2,813,139 - 14,434,115
- due to debt securities holders 1,082,941 7,680,793 21,010,473 1,500,000 6,000,000 - 37,274,207

Interest Rate Sensitivity Gap (49,302,061) (32,542,520) 88,892,771 63,353,078 59,277,249 (15,905,465) 113,773,052
STRATEGY REPORT
51.4.3 Interest Rate Benchmark Reform

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alternative nearly risk free rates (RFRs). As at 31st December 2022, the Bank’s IBOR exposure is indexed to USD LIBOR with one month,
three month and six month settings. These indexes will either cease to be provided or no longer be representative after 30th June 2023.
The alternate reference rate for USD LIBOR would be SOFR (Secured Overnight Financing Rate).
7KHIROORZLQJWDEOHUHȵHFWVWKH%DQNȇVΖ%25H[SRVXUHWRQRQGHULYDWLYHȴQDQFLDODVVHWVDQGȴQDQFLDOOLDELOLWLHVDVDWVW'HFHPEHU
subject to reform, that has yet to be transited to alternative benchmark rates. These exposures could remain outstanding until LIBOR
ceases, as their contractual maturity falls after 30th June 2023.
As at 31st December 2022 Capital Outstanding

Rs 000
1RQGHULYDWLYHȴQDQFLDODVVHWV 61,686,894
1RQGHULYDWLYHȴQDQFLDOOLDELOLWLHV 685,313
Apart from the above, the Bank does not have any other derivative or hedging instruments that are indexed to IBORs that are subject to
reform.
The main risks to which the Bank has been exposed as a result of IBOR reform are operational. For example, the renegotiation of loan
contracts through bilateral negotiation with customers, updating of contractual terms, updating of systems that use IBOR and revision of
operational controls related to the reform etc. Financial risk is predominantly limited to the interest rate risk.
The ALCO is primarily responsible to manage the Bank’s transition to alternative RFRs. ALCO will evaluate whether the contracts that
are indexed to IBORs need to be amended as a result of the reform and how to manage communication about IBOR reform with
counterparties.
62)5LVDQRYHUQLJKWUDWHXQOLNHΖ%25VZKLFKDUHDYDLODEOHWRFRYHUGL΍HUHQWWHUPVWUXFWXUHV7KHSURFHVVIRUFRQYHUWLQJWKHRYHUQLJKW
62)5UDWHWRFRYHUGL΍HUHQWWHUPVWUXFWXUHVLVFXUUHQWO\EHLQJHYDOXDWHGDWWKH$/&2OHYHO2QFHDGHFLVLRQLVPDGHWKH%DQNZLOOPRYHWR
the new benchmark reference rate and the pricing for all new contracts will be quoted based on the new rates.
The respective business divisions are supposed to report to the ALCO on a quarterly basis of the balance contracts yet to be transited to
alternative RFRs.
51.4.4 Currency Risk

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limits for net open position (NOP) for each major currency. In accordance with the Bank’s policy, positions are monitored on a daily basis
and hedging strategies are used to ensure positions are maintained within established limits.


51.4.4(a) Net Open Position by Currency
The following table shows the net open position of the Bank for each of the major currencies as at 31st December 2022 and 31st
December 2021.

Net Overall Long Net Overall Short Net Overall Long Net Overall Short
Rs 000 Rs 000 Rs 000 Rs 000
Currency
USD - 563,684 1,069,557 -
GBP 204,286 - 20,272 -
EUR 30,121 - 91,090 -
JPY 21,776 - 28,822 -
AUD 137,762 - 4,529 -
CAD - 10,687 8,987 -
CHF 15,596 - 18,568 -
SGD 19,454 - 7,689 -
AED 876,157 - 15,264 -
HKD 22,650 - 7,407 -
Sub Total 1,327,802 574,371 1,272,185 -
Other Currencies 111,639 - 167,196 -
Grand Total 1,439,441 574,371 1,439,381 -
Higher of Long or Short 1,439,441 - 1,439,381 -
E b,PSDFWRQ6WDWHPHQWRI3UR΋WRU/RVVGXHWR([FKDQJH5DWH6KRFNV
The following table indicates the gain/(loss) to the Bank, of a reasonably possible change in exchange rates, based on a constant
net open position as indicated in Note 51.4.4 (a).
2022 2021
Increase/(decrease) in Net Open Position Impact on Statement Net Open Position Impact on Statement
exchange rate (after Rate Shock) RI3UR΋WRU/RVV (after Rate Shock) RI3UR΋WRU/RVV
Rs 000 Rs 000 Rs 000 Rs 000
1,511,414 71,972 1,511,350 71,969

1,583,386 143,944 1,583,319 143,938
1,367,470 (71,972) 1,367,412 (71,969)
1,295,497 (143,944) 1,295,443 (143,938)
F ,PSDFWRQ6WDWHPHQWRI3UR΋WRU/RVVGXHWRLQFUHDVHGHFUHDVHLQ([FKDQJH5DWHE\
Rs Mn
1,908
2,000
1,000 523
328
120 190 109 144 144
58
0
(120) (58) (109)
(190) (144) (144)
(328)
(523)
(1,000)
(1,908)
(2,000)
Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Sep-22
Dec-22
10% Increase in Exchange Rate 10% Decrease in Exchange Rate

51.4.5 Equity Price Risk

Equity price risk arises as a result of any volatility in market prices of individual equities. The Bank conducts mark to market
FDOFXODWLRQVRQDPRQWKO\EDVLVRUPRUHIUHTXHQWO\RQDQHHGEDVLVWRLGHQWLI\WKHLPSDFWRQWKHȴQDQFLDOVWDWHPHQWVGXHWR
changes in equity prices.
7KHWDEOHEHORZVXPPDULVHVWKHLPSDFWRIDFKDQJHLQLQGLYLGXDOHTXLW\SULFHVRQWKH6WDWHPHQWRI3URȴWRU/RVV2WKHU
Comprehensive Income and total equity of the Bank/Group as at 31st December 2022 and 31st December 2021.

Statement of Other Total Impact to Statement of Other Total Impact to
3UR΋WRU/RVV Comprehensive Equity 3UR΋WRU/RVV Comprehensive Equity
Income Income
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Bank
LQFUHDVH - 467,115 467,115 4,913 445,115 450,028
GHFUHDVH - (467,115) (467,115) (4,913) (445,115) (450,028)
Group
LQFUHDVH 18,119 467,115 485,234 4,913 445,115 450,028
GHFUHDVH (18,119) (467,115) (485,234) (4,913) (445,115) (450,028)
51.5 Operational Risk

Operational risk arises due to inadequate or failed internal processes, people and systems or from external events. Operational risk
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7KHRSHUDWLRQDOULVNPDQDJHPHQWIUDPHZRUNRIWKH%DQNKDVEHHQGHȴQHGXQGHUWKH%RDUGDSSURYHG2SHUDWLRQDO5LVN
Management Policy. Operational risk is managed by establishing an appropriate internal control system that requires a mechanism
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Bank’s overall internal control system.
2SHUDWLRQDO5LVN0DQDJHPHQW8QLWUHSRUWVWR&KLHI5LVN2ɝFHUZKRUHSRUWVGLUHFWO\WRWKH%RDUGΖQWHJUDWHG5LVN0DQDJHPHQW
Committee (BIRMC). BIRMC maintains a high-level of overall supervision over managing operational risks of the Bank.
51.6 Capital Management

The Bank's capital management objectives can be summarised as follows:
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Ì +ROGVXɝFLHQWFDSLWDOWRVXSSRUWWKH%DQN VULVNDSSHWLWH
Ì Provide additional capital to business segments of the Bank to achieve the overall strategic objectives
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Regulatory Capital
The Bank manages its capital considering the regulatory capital requirements. The Central Bank of Sri Lanka (CBSL) sets and
monitors capital requirements for licensed commercial banks in Sri Lanka based on the Basel framework. Accordingly the Bank
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$GHTXDF\5DWLRRIDVDWVW'HFHPEHU
Considering the extraordinary circumstances caused by the current macro-economic environment, CBSL issued the Directive No.
RIZKLFKDOORZHGOLFHQVHGEDQNVWRGUDZGRZQWKH&DSLWDO&RQVHUYDWLRQ%X΍HU &&% XSWRVXEMHFWWRWKHPLQLPXP
earnings retention requirements mentioned in the said Directive. However, the Bank always maintained its Tier I and Total Capital
5DWLRVDERYHWKHDQGOHYHOUHVSHFWLYHO\DQGWKHUHIRUHGLGQRWUHTXLUHWRGUDZGRZQWKH&&%GXULQJWKH\HDUHQGHGVW
December 2022.
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Common Equity Tier I (CET I) Capital after adjustments 95,533,144 104,104,589 102,822,613 111,221,788
Common Equity Tier I (CET I) Capital 120,079,176 112,506,327 125,752,360 118,202,030
Stated capital 47,622,493 47,622,493 47,622,493 47,622,493
Statutory reserve fund 5,755,000 5,075,000 6,033,000 5,315,000
Published retained earnings/(Accumulated retained losses) 8,169,471 8,491,142 13,564,655 13,946,845
Published accumulated other comprehensive income (OCI) (457,135) (1,151,213) (457,135) (1,151,213)
General and other disclosed reserves 58,989,347 52,468,905 58,989,347 52,468,905
Total adjustments to CET I Capital 24,546,032 8,401,738 22,929,747 6,980,242
Intangible assets (net) 578,031 544,916 600,341 567,681
Deferred tax assets (net) 21,734,244 6,157,958 21,992,147 6,242,982
'HȴQHGEHQHȴWSHQVLRQIXQGDVVHWV 337,259 - 337,259 -
2WKHUV ΖQYHVWPHQWVLQWKHFDSLWDORIEDQNLQJ ȴQDQFLDO
institutions) 1,896,498 1,698,864 - 169,579
Additional Tier I (AT I) Capital after adjustments - - - -
Additional Tier I (AT I) Capital - - - -
Tier II Capital after adjustments 18,818,445 22,882,143 19,273,912 23,364,668
Tier II Capital 18,818,445 22,882,143 19,273,912 23,364,668
Qualifying Tier II capital instruments 8,617,903 13,278,665 8,617,903 13,278,665
Revaluation gains 901,539 978,813 901,539 978,813
6WDJH RIVWDJHLPSDLUPHQWSURYLVLRQ 9,299,003 8,624,665 9,754,470 9,107,190
Total adjustments to Tier II - - - -
CET I Capital 95,533,144 104,104,589 102,822,613 111,221,788
Total Tier I Capital 95,533,144 104,104,589 102,822,613 111,221,788
Total Capital 114,351,589 126,986,732 122,096,525 134,586,456
Total Risk Weighted Assets (RWA) 801,373,367 746,321,439 844,381,387 791,790,267

RWAs for Credit Risk 743,920,231 689,973,167 780,357,635 728,575,228
RWAs for Operational Risk 55,711,400 47,382,447 61,977,640 54,249,214
RWAs for Market Risk 1,741,736 8,965,825 2,046,112 8,965,825
CET I Capital Ratio (%) 11.92 13.95 12.18 14.05
Total Tier I Capital Ratio (%) 11.92 13.95 12.18 14.05
Total Capital Ratio (%) 14.27 17.02 14.46 17.00
Pillar III - Disclosure Requirements under Basel III

Disclosures under the Pillar III requirements mainly include the regulatory capital requirements and liquidity, risk weighted
DVVHWVGLVFXVVLRQRQPHHWLQJFXUUHQWDQGIXWXUHFDSLWDOUHTXLUHPHQWVRIEDQNVOLQNDJHVEHWZHHQȴQDQFLDOVWDWHPHQWVDQG
UHJXODWRU\H[SRVXUHVDQGLQIRUPDWLRQRQDVVHVVPHQWRI'6Ζ%VΖWLVUHTXLUHGWRGLVFORVHWKHWHPSODWHVVSHFLȴHGE\WKH&HQWUDO
%DQNRI6UL/DQNDDVSHUWKH%DVHOΖΖΖPLQLPXPGLVFORVXUHUHTXLUHPHQWVZLWKH΍HFWIURPVW-XO\5HIHU%DVHOΖΖΖ'LVFORVXUH
Requirements on pages 467 to 476.

52 MATURITY ANALYSIS
(a) Bank

Within 12 After 12 Total Within 12 After 12 Total
Months Months Months Months
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Assets
Cash & cash equivalents 79,162,545 - 79,162,545 22,882,999 - 22,882,999
Balances with Central Bank of Sri
Lanka 28,559,365 3,019,820 31,579,185 28,234,732 2,639,824 30,874,556
Placements with banks 10,927,216 - 10,927,216 2,739,514 - 2,739,514
- loans & advances 439,719,507 371,438,142 811,157,649 402,318,390 360,269,904 762,588,294
Investment in subsidiaries - 3,898,512 3,898,512 - 3,503,350 3,503,350
Property, plant & equipment - 8,910,525 8,910,525 - 7,817,923 7,817,923
Intangible assets - 578,031 578,031 - 544,916 544,916
Right-of-use assets 1,530,125 2,010,161 3,540,286 1,355,225 1,910,093 3,265,318
Deferred tax assets - 21,734,244 21,734,244 - 6,157,958 6,157,958
Other assets 23,267,163 3,363,811 26,630,974 11,867,052 2,841,569 14,708,621
Total Assets 718,945,592 605,480,745 1,324,426,337 618,329,896 581,583,499 1,199,913,395
Liabilities
Due to banks 11,297,181 - 11,297,181 22,283,128 1,370,119 23,653,247
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 1,449,393 - 1,449,393 607,923 - 607,923
agreements 2,283,291 - 2,283,291 4,157,662 - 4,157,662
- due to depositors 1,002,635,429 93,464,445 1,096,099,874 899,596,741 78,349,211 977,945,952
- due to other borrowers 3,437,499 5,736,424 9,173,923 6,715,432 7,718,683 14,434,115
5HWLUHPHQWEHQHȴWREOLJDWLRQ - 1,845,228 1,845,228 - 2,573,127 2,573,127
Dividend payable 187,141 - 187,141 148,032 - 148,032
Current tax liabilities 18,754,155 - 18,754,155 7,524,844 - 7,524,844
Other liabilities 29,150,687 2,545,983 31,696,670 16,777,439 2,332,803 19,110,242
Total Liabilities 1,081,454,312 116,592,080 1,198,046,392 965,307,320 115,854,416 1,081,161,736
Maturity Gap (362,508,720) 488,888,665 126,379,945 (346,977,424) 465,729,083 118,751,659
Cumulative Gap (362,508,720) 126,379,945 (346,977,424) 118,751,659


52 MATURITY ANALYSIS CONTD.

(b) Group

Within 12 After 12 Total Within 12 After 12 Total
Months Months Months Months
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Assets
Cash & cash equivalents 79,344,587 - 79,344,587 23,027,588 - 23,027,588
Balances with Central Bank of Sri Lanka 28,559,365 3,019,820 31,579,185 28,234,732 2,639,824 30,874,556
Placements with banks 10,927,216 - 10,927,216 2,739,514 - 2,739,514
- loans & advances 457,045,305 382,931,433 839,976,738 419,715,661 376,088,692 795,804,353
Property, plant & equipment - 19,067,412 19,067,412 - 16,337,516 16,337,516
Intangible assets - 600,341 600,341 - 567,681 567,681
Right-of-use assets 1,587,488 1,678,282 3,265,770 1,288,591 1,743,199 3,031,790
Current tax receivables - - - 4,177 - 4,177
Deferred tax assets - 21,992,147 21,992,147 - 6,242,982 6,242,982
Other assets 24,966,423 3,422,533 28,388,956 12,160,894 4,001,445 16,162,339
Total Assets 744,080,039 623,239,523 1,367,319,562 639,113,293 603,519,357 1,242,632,650
Liabilities
Due to banks 15,255,184 - 15,255,184 26,287,006 5,245,287 31,532,293
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 1,449,393 - 1,449,393 607,923 - 607,923
agreements 2,283,291 - 2,283,291 4,157,662 - 4,157,662
- due to depositors 1,018,017,441 97,138,438 1,115,155,879 913,990,493 80,327,081 994,317,574
- due to other borrowers 3,437,499 5,736,424 9,173,923 6,715,432 7,718,683 14,434,115
5HWLUHPHQWEHQHȴWREOLJDWLRQ - 1,998,238 1,998,238 - 2,706,462 2,706,462
Dividend payable 187,141 - 187,141 148,032 - 148,032
Current tax liabilities 19,186,239 - 19,186,239 8,375,511 - 8,375,511
Deferred tax liabilities - 1,465,662 1,465,662 - 979,815 979,815
Other liabilities 29,941,090 2,800,194 32,741,284 18,319,120 2,594,418 20,913,538
Total Liabilities 1,106,140,289 125,628,206 1,231,768,495 987,364,913 128,082,219 1,115,447,132
Maturity Gap (362,060,250) 497,611,317 135,551,067 (348,251,620) 475,437,138 127,185,518
Cumulative Gap (362,060,250) 135,551,067 - (348,251,620) 127,185,518 -


53 REPURCHASE AND REVERSE REPURCHASE TRANSACTIONS IN SCRIPLESS TREASURY BONDS AND SCRIPLESS TREASURY BILLS
Directive No. 1 of 2019, issued by the Central Bank of Sri Lanka, requires Licensed Banks/Primary Dealers to disclose following
additional information on repurchase and reverse repurchase transactions in scripless treasury bonds and bills.
53.1 Carrying Value of Securities Allocated for Repurchase Transactions

Note Amortised Cost Fair Value Amortised Cost Fair Value
Rs 000 Rs 000 Rs 000 Rs 000
Financial assets at amortised cost -

debt & other instruments 26.5
Bank & Group 2,783,782 2,708,043 4,382,447 4,344,738
53.2 Market Value of Securities Received for Reverse Repurchase Transactions

6HFXULWLHVSXUFKDVHGXQGHUDJUHHPHQWVWRUHVHOODWDVSHFLȴHGIXWXUHGDWHDUHQRWUHFRJQLVHGLQWKH6WDWHPHQWRI)LQDQFLDO
Position. The consideration paid, including accrued interest, is recorded in the Statement of Financial Position, within “reverse
repurchase agreements”.

Amortised Cost Fair Value of Amortised Cost Fair Value of
Securities Securities
Received Received
Rs 000 Rs 000 Rs 000 Rs 000
Reverse repurchase agreements

Bank 10,072,569 11,767,952 2,752,011 3,042,550
Group 10,299,569 12,023,369 4,861,922 5,137,975
53.3 Bank's Policy on Haircuts for Repurchase and Reverse Repurchase Transactions
According to the Bank's internal policies, minimum haircut applicable for each maturity bucket as at 31st December 2022 is given
below. The haircuts applied meet the minimum haircut requirements imposed by the Directive No. 1 of 2019.
Remaining Term to Maturity of the Eligible Security Minimum Haircut (%)

Repurchase Reverse
Transactions Repurchase
Transactions
Up to 1 year 5.00 4.00

More than 1 year and up to 3 years 6.00 6.00
More than 3 years and up to 5 years 8.00 8.00
More than 5 years and up to 8 years 10.00 10.00
More than 8 years 12.00 12.00
53.4 Penalties Imposed on the Bank/Group for Non-Compliance

No penalties have been imposed on the Group for non compliance with Directive No. 1 of 2019 during the year ended 31st
December 2022.

Once a routine is
perfected, trapeze artists
often move on to the next
challenge; seeking to
elevate and surpass their
performance
year-on-year, and face
the future with
confidence.
POISED IN
P R E PA R AT I O N
S U P P L E M E N TA R Y I N F O R M AT I O N
Today, we are ready to face the next chapter in our journey – mapping out the next
series of motion that will take us to new levels of performance, while collaborating
with our partners to ensure they grow alongside us.
Statement of Profit or Loss in US$.

US$...................................................412
................................................. 412
Statement of Comprehensive Income in US$...............................
US$...............................413
413
Statement of Financial Position in US$...........................................
US$...........................................414
414
Ten Years at a Glance.
Glance..........................................................................415
........................................................................ 415
Quarterly Statistics...............................................................................
Statistics...............................................................................417
417
Investor Information............................................................................
Information............................................................................419
419
Economic Value Addition.
Addition....................................................................430
.................................................................. 430
Corporate Governance
Compliance with Governance Directions and Codes.............
Codes.............432
432
Basel III Disclosure Requirements.
Requirements....................................................467
.................................................. 467
Detailed Material Topics.....................................................................
Topics.....................................................................477
477
GRI Content Index................................................................................
Index................................................................................497
497
Sampath Bank PLC in the Integrated Annual Report 2022.
2022....503
..503
Sampath Bank PLC on the Sustainability Reporting Criteria
Presented in the Integrated Annual Report 2022.....................
2022.....................506
506
Glossary of Financial and Banking Terms.
Terms.......................................508
..................................... 508
Acronyms and Abbreviations ...........................................................
...........................................................512
512
Notice of Annual General Meeting.
Meeting...................................................515
................................................. 515
Notes.......................................................................................................
Notes.......................................................................................................516
516
Stakeholder Feedback Form.
Form..............................................................517
............................................................ 517
Corporate Information........................................................................
Information........................................................................519
519
Form of Proxy
STATEMENT OF PROFIT OR LOSS IN US$
Bank Group
US$ 000 US$ 000 US$ 000 US$ 000
Gross income 540,548 520,899 563,617 563,263
Interest income 431,243 428,329 450,823 460,413

Less: Interest expense 230,143 220,761 242,773 233,672
Net interest income 201,100 207,568 208,050 226,741
Fee & commission income 60,029 65,951 62,067 70,919

Less: Fee & commission expense 6,838 8,792 6,842 8,797
Net fee & commission income 53,191 57,159 55,225 62,122
Net (loss)/gain from trading (6,151) 1,989 (6,201) 1,989

1HWJDLQRQGHUHFRJQLWLRQRIȴQDQFLDODVVHWV 1,482 749 1,530 749
Net other operating income 53,945 23,881 55,398 29,193
Total operating income 303,567 291,346 314,002 320,794
Less: Impairment charge 171,562 85,105 172,115 92,449

Net operating income 132,005 206,241 141,887 228,345
Less: Operating expenses

Personnel expenses 34,189 47,537 37,971 54,377
Depreciation & amortisation expenses 6,963 12,226 6,557 12,410
Other operating expenses 35,587 43,192 37,245 46,385
Total operating expenses 76,739 102,955 81,773 113,172
2SHUDWLQJSUR΋WEHIRUHWD[HVRQ΋QDQFLDOVHUYLFHV 55,266 103,286 60,114 115,173
/HVV9DOXHDGGHGWD[RQȴQDQFLDOVHUYLFHV 13,554 19,431 14,611 21,399

Social security contribution levy 608 - 647 -
7RWDOWD[HVRQ΋QDQFLDOVHUYLFHV 14,162 19,431 15,258 21,399
3UR΋WEHIRUHLQFRPHWD[ 41,104 83,855 44,856 93,774
Less: Income tax expense 5,171 21,800 6,386 24,751

3UR΋WIRUWKH\HDU 35,933 62,055 38,470 69,023
Attributable to:
Equity holders of the Bank 35,933 62,055 38,470 69,023
Non-controlling interest - -
35,933 62,055 38,470 69,023
Earnings per share: Basic/Diluted (US$) 0.03 0.05 0.03 0.06
Dividend per share

Dividend per share: Gross (US$) 0.013* 0.021
Dividend per share: Net (US$) 0.011* 0.021
Exchange rate of US$ was Rs 365.50 as at 31st December 2022 (Rs 200.75 as at 31st December 2021).
* Based on proposed dividend which is to be approved at the Annual General Meeting.

STATEMENT OF COMPREHENSIVE
INCOME IN US$
Bank Group
US$ 000 US$ 000 US$ 000 US$ 000
3UR΋WIRUWKH\HDU 35,933 62,055 38,470 69,023

ΖWHPVWKDWZLOOEHUHFODVVLȴHGWRSURȴWRUORVV
Debt instruments at fair value through other comprehensive income:
Loss arising on re-measurement (12,251) (6,880) (12,251) (6,880)
5HFODVVLȴFDWLRQWRSURȴWRUORVVGXHWRGHUHFRJQLWLRQ 37 (151) 37 (151)
Changes in impairment for expected credit losses 1,473 171 1,473 171
5HFODVVLȴFDWLRQRIWUHDVXU\ERQGVDW)92&ΖWRDPRUWLVHGFRVW 13,099 - 13,099 -
'HIHUUHGWD[H΍HFWLQFOXGLQJWKHH΍HFWRIUDWHFKDQJHRQWKHRSHQLQJEDODQFH (459) 1,619 (459) 1,619
1HWRWKHUFRPSUHKHQVLYHLQFRPHWREHUHFODVVL΋HGWRSUR΋WRUORVV 1,899 (5,241) 1,899 (5,241)
ΖWHPVWKDWZLOOQRWEHUHFODVVLȴHGWRSURȴWRUORVV
Equity instruments at fair value through other comprehensive income:
(Loss)/gain arising on re-measurement (8,793) 3,341 (8,793) 3,341
([FKDQJHGL΍HUHQFHLQWUDQVODWLRQ 9,395 1,445 9,395 1,445
'HIHUUHGWD[H΍HFWLQFOXGLQJWKHH΍HFWRIUDWHFKDQJHRQWKHRSHQLQJEDODQFH (777) (603) (777) (603)
(175) 4,183 (175) 4,183
$FWXDULDOJDLQRQGHȴQHGEHQHȴWSODQV 3,136 13,969 3,166 14,001

'HIHUUHGWD[H΍HFWLQFOXGLQJWKHH΍HFWRIUDWHFKDQJHRQWKHRSHQLQJEDODQFH (557) (4,378) (563) (4,390)
2,579 9,591 2,603 9,611
Revaluation surplus on property, plant & equipment 2,676 - 5,074 -

'HIHUUHGWD[H΍HFWLQFOXGLQJWKHH΍HFWRIUDWHFKDQJHRQWKHRSHQLQJEDODQFH (1,485) 828 (2,887) 1,650
1,191 828 2,187 1,650
1HWRWKHUFRPSUHKHQVLYHLQFRPHQRWWREHUHFODVVL΋HGWRSUR΋WRUORVV 3,595 14,602 4,615 15,444
Other comprehensive income net of tax 5,494 9,361 6,514 10,203

Total comprehensive income for the year net of tax 41,427 71,416 44,984 79,226
Attributable to:
Equity holders of the Bank 41,427 71,416 44,984 79,226
41,427 71,416 44,984 79,226

STATEMENT OF FINANCIAL POSITION IN US$
Bank Group
As at 31st December 2022 2021 2022 2021

US$ 000 US$ 000 US$ 000 US$ 000
ASSETS
Cash & cash equivalents 216,587 113,988 217,085 114,708
Balances with Central Bank of Sri Lanka 86,400 153,796 86,400 153,796
Placements with banks 29,897 13,646 29,897 13,646
Reverse repurchase agreements 27,558 13,709 28,179 24,219
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 122 6,969 122 6,969
)LQDQFLDODVVHWVUHFRJQLVHGWKURXJKSURȴWRUORVVPHDVXUHGDWIDLUYDOXH 12,698 19,466 13,194 19,466
- loans & advances 2,219,310 3,798,696 2,298,158 3,964,156
- debt & other instruments 762,724 1,463,347 777,668 1,467,832
Financial assets - fair value through other comprehensive income 89,666 214,217 89,666 214,218
Investment in subsidiaries 10,666 17,451 - -
Property, plant & equipment 24,379 38,944 52,168 81,382
Intangible assets 1,581 2,714 1,643 2,828
Right-of-use assets 9,686 16,266 8,935 15,102
Current tax receivables - - - 21
Deferred tax assets 59,464 30,675 60,170 31,098
Other assets 72,865 73,269 77,672 80,510
Total Assets 3,623,603 5,977,153 3,740,957 6,189,951
LIABILITIES
Due to banks 30,909 117,824 41,738 157,072
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 3,966 3,028 3,966 3,028
Securities sold under repurchase agreements 6,247 20,711 6,247 20,711
- due to depositors 2,998,905 4,871,462 3,051,042 4,953,014
- due to other borrowers 25,100 71,901 25,100 71,901
- due to debt securities holders 69,110 154,454 89,938 185,675
5HWLUHPHQWEHQHȴWREOLJDWLRQ 5,049 12,818 5,467 13,482
Dividend payable 512 737 512 737
Current tax liabilities 51,311 37,484 52,493 41,721
Deferred tax liabilities - - 4,010 4,881
Total Liabilities 3,277,830 5,385,613 3,370,092 5,556,399
EQUITY
Stated capital 130,294 237,223 130,294 237,223
Reserves
Statutory reserve fund 15,746 25,280 16,506 26,476
Other reserves 177,382 285,168 186,952 300,778
Retained earnings 22,351 43,869 37,113 69,075
Total equity attributable to equity holders of the Bank 345,773 591,540 370,865 633,552
Total Equity 345,773 591,540 370,865 633,552
Total Liabilities & Equity 3,623,603 5,977,153 3,740,957 6,189,951
Commitments & contingencies 862,827 1,953,074 860,443 1,941,941

Net asset value per share (US$) 0.30 0.52 0.32 0.55

TEN YEARS AT A GLANCE
For the year ended/As at 31st December 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Operating Results (Rs Mn)

Gross income 47,509 44,597 47,032 67,585 92,590 115,310 118,855 102,339 104,570 197,571
Interest income 41,892 38,059 37,944 56,529 79,625 97,934 103,567 88,628 85,987 157,619
Interest expenses 26,556 22,335 20,542 33,776 51,261 59,880 61,992 54,805 44,318 84,117
Net interest income 15,336 15,724 17,402 22,754 28,363 38,054 41,575 33,823 41,669 73,502
Exchange income 520 1,283 2,466 2,589 3,132 5,491 2,793 2,792 4,849 16,261
Other income 4,901 4,387 5,421 7,002 8,484 10,198 10,809 9,598 11,969 21,191
Total operating income 20,757 21,394 25,288 32,344 39,979 53,743 55,177 46,213 58,488 110,954
Impairment charge 4,736 1,401 944 1,460 2,376 11,223 12,573 11,783 17,085 62,706
Operating expenses 10,634 11,729 13,339 15,471 16,918 19,307 20,366 20,095 20,668 28,048
7D[HVRQȴQDQFLDOVHUYLFHV 895 1,537 1,904 2,814 4,079 4,863 6,740 3,163 3,901 5,176
3URȴWEHIRUHLQFRPHWD[ 4,491 6,727 9,101 12,600 16,606 18,350 15,498 11,172 16,834 15,024
Income tax expense 1,061 1,813 2,967 3,475 4,502 6,207 4,347 3,147 4,376 1,890
3URȴWIRUWKH\HDU 3,430 4,914 6,134 9,125 12,104 12,143 11,151 8,025 12,457 13,134
Assets (Rs Mn)

Cash and cash equivalents including placements 10,094 13,348 18,781 25,814 25,494 27,799 25,040 32,282 25,623 90,090
Net loans and advances 260,040 302,370 377,348 458,831 562,884 650,014 689,378 720,215 762,588 811,158
Other interest earning assets 81,599 85,828 95,025 124,127 145,371 174,300 182,772 309,468 338,871 321,531
Investment in subsidiaries 1,060 1,060 1,080 1,228 1,356 2,320 2,395 3,351 3,503 3,899
Property, plant and equipment 5,135 5,142 5,313 5,972 7,270 7,918 8,466 8,126 7,818 8,911
Other assets 24,114 24,278 27,730 42,540 52,727 51,874 54,299 36,829 61,510 88,837
Total assets 382,042 432,026 525,277 658,512 795,102 914,225 962,350 1,110,271 1,199,913 1,324,426
Liabilities (Rs Mn)

Deposits from banks and customers 302,429 341,946 409,411 516,273 630,442 698,085 718,301 886,873 978,368 1,103,213
Debt securities holders, borrowings from banks
and others 39,194 36,846 57,347 72,446 76,215 91,143 93,765 80,217 68,671 38,618
Other liabilities 12,000 22,322 23,394 25,304 24,795 40,608 45,279 35,632 34,123 56,215
Total liabilities 353,623 401,114 490,152 614,023 731,452 829,836 857,345 1,002,722 1,081,162 1,198,046
Shareholders' Fund (Rs Mn)

Stated capital 4,460 4,470 5,381 6,471 16,308 32,796 47,622 47,622 47,622 47,622
Reserves 23,958 26,442 29,744 38,018 47,342 51,593 57,384 59,927 71,130 78,758
Total equity 28,418 30,912 35,125 44,489 63,650 84,389 105,006 107,549 118,752 126,380
Total liabilities and equity 382,042 432,026 525,277 658,512 795,102 914,225 962,350 1,110,271 1,199,913 1,324,426
Dividend paid/proposed (Rs Mn) 1,343 1,847 2,240 3,362 4,598 4,565 4,482 3,147 4,864 5,264
Dividend per share (Rs) 8.00 11.00 13.00 18.75 17.20 16.25 3.92 [A] 2.75 [A] 4.25 4.60
Cash dividend per share (Rs) 8.00 5.00 6.00 4.75 nil 5.00 3.92 [A] 2.75 [A]
4.25 3.45
Dividend cover (times) 2.55 2.66 2.74 2.71 2.63 2.66 2.49 2.55 2.56 2.50
'LYLGHQG\LHOG 4.65 4.66 5.24 7.20 5.45 6.91 7.24 6.08 8.16 13.45
Earnings per share - Basic/Diluted (Rs) [B] 3.47 4.97 6.21 9.23 12.21 11.63 10.11 7.01 10.89 11.48
(DUQLQJV\LHOG 11.90 12.07 13.98 18.18 17.76 18.37 20.22 15.51 20.90 33.57
Price earning ratio (times) 8.41 8.28 7.16 5.50 5.63 5.44 4.95 6.45 4.78 2.98
Price to book value (times) 1.01 1.32 1.25 1.09 1.08 0.78 0.59 0.48 0.50 0.31
Net asset value per share (Rs) 169.37 179.39 198.47 238.94 293.02 300.42 91.76 [A] 93.98 [A]
103.77 110.44
Market price per share (Rs) - High 242.00 252.00 279.90 268.70 352.20 335.50 245.00 170.00 250.00 [C] 56.50
Market price per share (Rs) - Low 161.60 164.20 235.20 210.00 253.50 218.00 136.00 96.00 48.00 26.00
Market price as at 31st December (Rs) 171.90 236.30 248.00 260.40 315.70 235.00 162.40 135.60 52.10 34.20
Ratios
*URZWKLQLQFRPH 22.5 (6.1) 5.5 43.7 37.0 24.5 3.1 (13.9) 2.2 88.9

TEN YEARS AT A GLANCE
For the year ended/As at 31st December 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
*URZWKLQSURȴW (34.4) 43.3 24.8 48.8 32.7 0.3 (8.2) (28.0) 55.2 5.4
*URZWKLQWRWDODVVHWV 23.5 13.1 21.6 25.4 20.7 15.0 5.3 15.4 8.1 10.4
*URZWKLQQHWORDQVDQGDGYDQFHV 24.4 16.3 24.8 21.6 22.7 15.5 6.1 4.5 5.9 6.4
*URZWKLQGHSRVLWV 24.2 13.1 19.7 26.1 22.1 10.7 2.9 23.5 10.3 12.8
&RVWWRLQFRPHUDWLRZLWKWD[HVRQȴQDQFLDO
VHUYLFHV 55.5 62.0 60.3 56.5 52.5 45.0 49.1 50.3 42.0 29.9
&RVWWRLQFRPHUDWLRZLWKRXWWD[HVRQȴQDQFLDO
VHUYLFHV 51.2 54.8 52.7 47.8 42.3 35.9 36.9 43.5 35.3 25.3
5HWXUQRQDYHUDJHDVVHWV EHIRUHWD[ 1.29 1.69 1.90 2.14 2.29 2.13 1.66 1.09 1.44 1.16
5HWXUQRQDYHUDJHDVVHWV DIWHUWD[ 0.98 1.23 1.28 1.55 1.67 1.41 1.20 0.78 1.07 1.01
5HWXUQRQDYHUDJHHTXLW\ DIWHUWD[ 12.88 16.35 18.42 23.47 23.35 16.02 11.78 7.58 11.05 10.95
Property, plant & equipment to
VKDUHKROGHUV IXQG 18.1 16.6 15.1 13.4 11.4 9.4 8.1 7.6 6.6 7.1
Total assets to shareholders' fund (times) 13.4 14.0 15.0 14.8 12.5 10.8 9.2 10.3 10.1 10.5
7RWDOLPSDLUPHQWRQORDQVDVDRI
gross loans & advances 3.70 2.27 1.82 1.67 1.52 3.03 4.20 5.10 6.21 11.84
&RVWRIULVN n/a n/a n/a n/a 0.44 1.69 1.74 1.36 1.61 5.97
&$6$UDWLR 33.9 45.9 47.3 38.4 34.9 33.4 35.2 39.3 45.7 32.7
/RDQVWRGHSRVLWVUDWLR 89.3 90.5 93.9 90.4 90.7 96.0 100.2 85.6 83.1 83.4
1RQSHUIRUPLQJORDQUDWLR *URVV [D] 2.68 1.93 1.64 1.61 1.64 3.69 6.37 6.30 5.09 n/a
1RQSHUIRUPLQJORDQUDWLR 1HW[D] 0.59 0.53 0.46 0.62 0.75 2.39 4.53 3.45 1.78 n/a
Stage 3 impairment to Stage 3
ORDQVUDWLR [D] n/a n/a n/a n/a n/a n/a n/a 40.22 45.45 53.84
ΖPSDLUHGORDQV 6WDJH UDWLR [D] n/a n/a n/a n/a n/a n/a n/a 3.95 3.20 4.35
Liquid Assets Ratios

2YHUDOO%DQN [E] n/a n/a n/a n/a n/a n/a n/a n/a n/a 27.85
'RPHVWLF%DQNLQJ8QLW 27.2 24.4 21.8 21.2 22.2 21.5 21.5 35.0 32.5 n/a
2΍6KRUH%DQNLQJ8QLW 30.4 23.8 27.2 33.4 24.9 25.8 26.9 37.6 30.8 n/a
$VVSHFLȴHGLQ%DQNLQJ$FW1RRIDQG
any subsequent amendments thereto)
Liquidity Coverage Ratios

5XSHH n/a n/a 102.35 94.15 133.52 125.03 177.29 424.90 254.89 200.78
$OOFXUUHQF\ n/a n/a 106.84 77.69 118.81 125.42 149.17 293.37 213.43 146.53
1HWVWDEOHIXQGLQJUDWLR n/a n/a n/a n/a n/a n/a 126.80 144.00 149.92 157.10
Capital Adequacy Ratios Basel II Basel II Basel II Basel II Basel III Basel III Basel III Basel III Basel III Basel III
&RPPRQHTXLW\7LHUΖ n/a n/a n/a n/a 10.26 12.08 14.22 13.44 13.95 11.92
7RWDO7LHUΖ 10.08 8.83 7.90 8.31 10.26 12.08 14.22 13.44 13.95 11.92
7RWDOFDSLWDO 7LHUΖ7LHUΖΖ 14.22 13.62 12.26 12.87 14.41 15.73 18.12 16.41 17.02 14.27
/HYHUDJHUDWLR n/a n/a n/a n/a n/a n/a 8.12 6.94 7.80 7.00
Other Information
Exchange rate (USD) 130.75 131.20 144.20 150.00 153.50 182.90 181.35 185.50 200.75 365.50
1XPEHURIVWD΍ 3,688 4,000 3,993 3,960 4,011 4,189 4,134 4,048 4,013 3,948
Number of branches 212 220 225 229 229 229 229 229 229 229
Number of ATMs, CRMs and CDMs 274 328 410 489 568 750 812 830 829 821
Number of Virtual Teller Machines nil nil nil nil nil 01 02 05 05 05
>$@ 7KHQHWDVVHWYDOXHSHUVKDUHDQGWKHGLYLGHQGSHUVKDUHRIWKH%DQNIRUWKH\HDUVDQGKDYHEHHQDGMXVWHGWRUHȵHFWWKHLQFUHDVHG
number of shares due to the sub-division.
>%@ (DUQLQJVSHUVKDUHLVUHWURVSHFWLYHO\DGMXVWHGWRUHȵHFWWKHFKDQJHVLQZHLJKWHGDYHUDJHQXPEHURIVKDUHV
[C] Highest share price of Rs 250.00 reported prior to the sub-division of shares.
>'@ 6XEVHTXHQWWRWKHLVVXDQFHRIWKHQHZ%DQNLQJ$FW'LUHFWLRQ1RRIRQ&ODVVLȴFDWLRQ5HFRJQLWLRQDQG0HDVXUHPHQWRI&UHGLW)DFLOLWLHVLQ
Licensed Banks, CBSL directed banks to publish ratios related to Stage 3 instead of non-performing loan ratios in the Interim Financial Statements,
ZLWKH΍HFWIURPUGTXDUWHU
[E] According to the Banking Act Direction No. 08 of 2022, commencing from December 2022, Licensed Commercial Banks are required to maintain liquid
assets on consolidated basis for the overall bank.

2022 2021
As at 31st 30th 30th 31st 31st 30th 30th 31st
December September June March December September June March
Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn
Statement of Financial Position

AND ANALYSIS
Total assets 1,324,426 1,312,948 1,321,553 1,293,459 1,199,913 1,183,404 1,171,262 1,151,730
Financial assets at amortised cost - loans &
advances 811,158 857,047 857,786 824,277 762,588 759,766 750,394 739,671

Financial liabilities at amortised cost - due to
depositors 1,096,100 1,059,211 1,024,427 1,049,349 977,946 957,113 944,008 913,628
Total equity 126,380 119,413 119,889 118,428 118,752 114,232 112,154 108,898
2022 2021
For the quarter ended 31st 30th 30th 31st 31st 30th 30th 31st
Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn Rs Mn
GOVERNANCE AND
RISK MANAGEMENT
6WDWHPHQWRI3UR΋WRU/RVV
Net interest income 20,243 21,860 17,859 13,541 11,977 10,427 10,052 9,214
QUARTERLY STATISTICS
Net fee & commission income 6,147 4,701 4,056 4,537 3,634 2,784 2,458 2,599
Net gain/(loss) from trading 768 (475) (2,161) (381) 497 (145) 444 (398)
1HWJDLQRQGHUHFRJQLWLRQRIȴQDQFLDODVVHWV 109 248 171 14 34 23 26 68
Net other operating income 1,691 1,983 7,362 8,681 504 930 674 2,685
Total operating income 28,958 28,317 27,287 26,392 16,646 14,019 13,654 14,168
Less: Impairment charge 13,898 20,626 16,427 11,755 7,243 4,846 3,816 1,179
Net operating income 15,060 7,691 10,860 14,637 9,403 9,173 9,838 12,989
Less: Total operating expenses 7,570 6,815 7,194 6,469 4,096 5,579 5,486 5,506
7D[HVRQȴQDQFLDOVHUYLFHV 1,781 581 1,100 1,714 795 819 932 1,355

Income tax expense (224) 179 191 1,744 1,036 858 933 1,550
3UR΋WIRUWKHSHULRG 5,933 116 2,375 4,710 3,476 1,917 2,487 4,578
Other comprehensive income for the period 1,034 (590) 1,735 (171) 1,044 161 756 (82)
Total comprehensive income for the period 6,967 (474) 4,110 4,539 4,520 2,078 3,243 4,496
INFORMATION
SUPPLEMENTARY

417
418
2022 2021
For the quarter ended 31st 30th 30th 31st 31st 30th 30th 31st
Market price per share (Rs)

Highest 42.00 44.50 45.00 56.50 59.30 56.50 56.80 250.00*
Lowest 30.00 26.00 29.60 45.50 51.20 49.60 48.00 50.00
Closing 34.20 41.50 30.20 45.80 52.10 52.00 52.60 53.80
*Prior to the sub-division of shares
ABOUT
2022 2021

As at 31st 30th 30th 31st 31st 30th 30th 31st
QUARTERLY STATISTICS
3UR΋WDELOLW\
ΖQWHUHVWPDUJLQ 5.66 5.35 4.85 4.54 3.61 3.46 3.42 3.35
5HWXUQRQDVVHWV EHIRUHWD[ 1.16 0.96 1.43 2.13 1.44 1.42 1.67 2.19
5HWXUQRQHTXLW\ DIWHUWD[ 10.95 8.08 12.06 15.95 11.05 10.76 12.91 16.97
Regulatory Capital
&RPPRQ(TXLW\7LHUΖ&DSLWDO5DWLR
0LQLPXP5HTXLUHPHQW 11.92 11.31 11.30 11.44 13.95 12.32 12.45 12.94
7RWDO7LHUΖ&DSLWDO5DWLR
7RWDO&DSLWDO5DWLR
Leverage Ratio (%) 0LQLPXP5HTXLUHPHQW 7.00 6.86 6.68 6.52 7.80 7.04 7.00 6.69
Assets Quality
*URVV13$5DWLR n/a n/a n/a n/a 5.09 5.52 5.77 5.92
1HW13$5DWLR n/a n/a n/a n/a 1.78 2.33 2.58 2.91
ΖPSDLUHG/RDQV 6WDJH 5DWLR 4.35 4.08 3.31 3.17 3.20 3.34 n/a n/a
ΖPSDLUPHQW 6WDJH WR6WDJH/RDQV5DWLR 53.84 50.54 49.70 46.97 45.45 42.96 n/a n/a
Regulatory Liquidity
Statutory Liquid Assets Ratio - Bank
/LTXLGLW\&RYHUDJH5DWLR 5XSHH
/LTXLGLW\&RYHUDJH5DWLR $OO&XUUHQF\
1HW6WDEOH)XQGLQJ5DWLR

STRATEGY REPORT
6XEVHTXHQWWRWKHLVVXDQFHRIWKHQHZ%DQNLQJ$FW'LUHFWLRQ1RRIRQ&ODVVLȴFDWLRQ5HFRJQLWLRQDQG0HDVXUHPHQWRI&UHGLW)DFLOLWLHVLQ/LFHQVHG%DQNV&%6/
GLUHFWHGEDQNVWRSXEOLVKUDWLRVUHODWHGWR6WDJHLQVWHDGRIQRQSHUIRUPLQJORDQUDWLRVLQWKHΖQWHULP)LQDQFLDO6WDWHPHQWVZLWKH΍HFWIURPUGTXDUWHU
INVESTOR INFORMATION
“Our Ambition is to Generate Attractive and Sustainable Returns

through Every Economic Cycle“. Annual Report
6DPSDWK%DQNȇVH΍RUWVWRH΍HFWLYHO\FRPPXQLFDWHDQGDFWLYHO\HQJDJHZLWKNH\
VWDNHKROGHUVEXLOGVWUXVWDQGHQKDQFHVFRQȴGHQFHLQWKH6DPSDWKEUDQGLQWXUQ Provides key
augmenting the performance of the Bank’s share and strengthening the Bank’s information to
Press Release and depict the Bank’s
ability to deliver better outcomes over the long-term despite the challenging Social Media
economic conditions. ȴQDQFLDODQG
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Announce news performance for
The Bank uses multiple tools and techniques to assess its
worthy events or
results and holistically review and report on its Interim Financial WKHȴQDQFLDO\HDU
Statements convey material
performance for the year. This approach enables
information about
the Bank to deliver positive and sustainable
Clear and concise the Bank to the
results to all stakeholders, while at the
Annual General information on the public.
same time, improving the agility of its
Meeting
business model to evolve and %DQNȇVȴQDQFLDO
adapt in tandem with the performance in line
A forum that
fast-moving world. with the regulatory
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greater interaction
to CSE requirements.
and promotes
open and
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transparent
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discussions
with market
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behaviour trends
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and, providing
the Board.
day traders
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clarity and make lucrative Reach Our
transparency investment. Investors
regarding
mandatory
disclosures to
enable investors to
make informed
decisions.

Value Creation for Shareholders
2022 2021 Change %
Net asset value per share (Rs) 110.44 103.77 6.43

Group earnings per share - Basic (Rs) 12.29 12.11 1.49
Dividend per share (Rs) 4.60 4.25 8.24
Market price per share as at 31st December (Rs) 34.20 52.10 (34.36)
'LYLGHQGSD\RXWUDWLR 40.08 39.04 2.66
Earnings & Highest Market Price per Share Price Earning Ratio as at 31st December Price to Book Value as at 31st December
Rs Rs Rs Times Rs Times
15 300 200 8 200 0.7
245.00 250.00 6.4
12 240 0.59
160 0.6
150 6
4.8 0.48 0.50
9 180 120 0.5
170.00 4.9
100 4
6 120 80 0.4
3.0
50 2 0.31
3 60 40 0.3
11.48
162.40
135.60
103.77
110.44
10.11
10.89
56.50
162.40
135.60
52.10
91.76
93.98
7.01
52.10
34.20
34.20
2019 11.5
2021 12.1
2022 12.3
2020 7.4
0 0 0 0 0 0.2
2019
2020
2021
2022
2019
2020
2021
2022
Earnings per Share - Group * Market Price per Share - Bank ** Market Price per Share - Bank **
Highest Market Price per Share Earnings per Share - Bank * Net Asset Value per Share - Bank *
- Bank (RHS) ** Price Earning Ratio - Bank (RHS) Price to Book Value Ratio - Bank (RHS)
Dividend per Share & Dividend Payout Ratio Gross Dividend Bank’s ROE & Market Interest Rates
Rs % Rs Mn %
%
8 46 6,000 25 25
5,000 20 20
6 42
40.19 40.08
39.21 39.04 4,000 15 15
4 38 11.78 11.05 10.95
3,000 10 10
2 34 7.58
2,000 5 5
2019 4,482
2020 3,147
2021 4,864
2022 5,264
2019 3.92
2021 4.25
2022 4.60
10.8
11.7
23.3
2020 2.75
9.1
8.7
6.2
6.0
6.1
0 30 1,000 0 0
2019
2020
2021
2022
Dividend per Share * Average of 12 Months AWFDR

Dividend Payout Ratio (RHS) Average of 12 Months T-Bill Rate
ROE (after income tax)
* The earnings per share, the net asset value per share and the dividend per share of the Bank and the Group for the year 2019 and 2020 have been adjusted to
UHȵHFWWKHLQFUHDVHGQXPEHURIVKDUHVGXHWRWKHVXEGLYLVLRQLQ
** Market prices of shares given above are not adjusted for the sub division of shares in 2021.
Bank's Market Capitalisation in Comparison to CSE - as at 31st December
2022 2021 2020 2019 2018 2017
Sampath Bank's market capitalisation (Rs Mn) 39,138 59,622 51,726 61,949 66,012 68,577
'HFUHDVH ΖQFUHDVHLQPDUNHWFDSLWDOLVDWLRQ
CSE market capitalisation (Rs Mn) 3,847,153 5,489,168 2,960,648 2,851,313 2,839,445 2,899,291
$VDRI&6(PDUNHWFDSLWDOLVDWLRQ
Market capitalisation rank 23 21 17 10 9 12

Bank’s Market Capitalisation Shareholders' Fund Shareholding - Resident & Non-Resident

Rs Bn Rs Bn %
80 150 100
6.6
6.7
15.8
20.3
120 80
60
90 60
40
60 40
20
30 2019 105.0 20
2020 107.5
2021 118.8
2022 126.4
2019 79.7
2022 93.4
2019 61.9
2020 51.7
2021 59.6
2022 39.1
2020 84.2
2021 93.3
0 0 0
Resident
Non-Resident
Analysis of Shareholders
Resident/Non-Resident
31st December 2022 31st December 2021
No. of No. of % No. of No. of %

Shareholders Shares Shareholders Shares
Resident shareholders 30,902 1,069,322,139 93.44 30,310 1,067,392,342 93.27

Non-resident shareholders 235 75,051,816 6.56 232 76,981,613 6.73
Total 31,137 1,144,373,955 100.00 30,542 1,144,373,955 100.00
Individuals/Institutions
No. of No. of % No. of No. of %

Individuals 30,322 373,333,616 32.62 29,662 381,929,453 33.37

Institutions 815 771,040,339 67.38 880 762,444,502 66.63
Total 31,137 1,144,373,955 100.00 30,542 1,144,373,955 100.00
Composition of Share Ownership
No. of % No. of % No. of % No. of %

1 - 1,000 shares 15,391 49.43 5,682,710 0.49 14,631 47.90 5,549,734 0.49
1,001 - 10,000 shares 11,379 36.54 39,809,081 3.48 11,375 37.24 39,989,989 3.49
10,001 - 100,000 shares 3,873 12.44 106,842,549 9.34 3,997 13.10 111,259,086 9.72
100,001 - 1,000,000 shares 428 1.38 107,925,818 9.43 465 1.52 116,076,674 10.14
Over 1,000,000 shares 66 0.21 884,113,797 77.26 74 0.24 871,498,472 76.16
Total 31,137 100.00 1,144,373,955 100.00 30,542 100.00 1,144,373,955 100.00

Shareholding of Individuals & Institutions Composition of Share Ownership 2022

% %
100 0.49
72.9
69.8
66.6
67.4
3.48 1.38 0.21

80
9.34 12.44
60 9.43
No. of
40 No. of Shares
Shareholders
20 77.26 49.43
36.54
2019 27.1
2020 30.2
2021 33.4
2022 32.6
Individuals 1 - 1,000 Shares 100,001 - 1,000,000 Shares

Institutions 1,001 - 10,000 Shares Over 1,000,000 Shares
10,001 - 100,000 Shares
Share Trading
Market
2022 2021 2020 2019 2018
No. of transactions 6,057,233 8,131,508 3,070,021 1,197,205 885,657

No. of shares traded 29,047,818,242 59,771,688,538 21,348,728,655 9,855,016,003 6,000,737,306
Value of shares traded (Rs Mn) 686,602 1,173,157 396,882 171,408 200,068
Bank
2022 2021 2020 2019 2018
No. of transactions 57,981 159,003 89,358 44,188 29,623

No. of shares traded 116,309,634 332,368,388 120,322,546 57,548,812 48,444,177
$VDRIWRWDOVKDUHVLQLVVXH 10.16 29.04 31.54 15.09 17.25
Average daily turnover (Rs Mn) 20.66 110.31 73.79 40.32 56.75
Value of shares traded (Rs Mn) 4,812.84 26,144.44 15,423.04 9,757.84 13,621.11
Sampath Bank's Share Price Fluctuation
2022 2021 2020 2019 2018
Lowest market price (Rs) 26.00 48.00 96.00 136.00 218.00

Highest market price (Rs) 56.50 250.00* 170.00 245.00 335.50
Closing price as at 31st December (Rs) 34.20 52.10 135.60 162.40 235.00
* Highest share price of Rs 250.00 reported prior to the sub-division of shares in 2021.

Share Trading - Sampath Bank PLC (Volume Traded & Turnover) Bank's Share Price Fluctuation
Mn Rs Mn Rs
245.00 250.00*
60 6,000 250
50 5,000 200
170.00
40 4,000
150
30 3,000 136.00
100
20 2,000 96.00 56.50
10 1,000 50
48.00
0 0 0 26.00
Dec-18
Dec-19
Dec-20
Dec-21
Dec-22
2019
2020
2021
2022
Volume Traded (No. of Shares) Turnover (RHS) Highest Market Price
Lowest Market Price
Before the sub-division of shares.
Closing Price as at 31st December
Highest share price before the sub-division of shares.
Sampath Bank PLC - Ordinary Shares

Frequency Distribution of Shareholders as at 31st December 2022
Share Range Resident Non-Resident Total

Shareholders
Shareholders
Shareholders
Shares
Shares
Shares
No. of
No. of
No. of
No. of
No. of
No. of
%
%
1 - 250 7,972 25.60 682,721 0.06 22 0.07 1,698 0.00 7,994 25.67 684,419 0.06
251 - 500 2,842 9.13 1,081,225 0.09 15 0.05 5,873 0.00 2,857 9.18 1,087,098 0.09
501 - 1,000 4,519 14.52 3,893,908 0.34 21 0.06 17,285 0.00 4,540 14.58 3,911,193 0.34
1,001 - 2,000 3,769 12.11 5,471,646 0.48 15 0.04 23,382 0.00 3,784 12.15 5,495,028 0.48
2,001 - 5,000 4,755 15.28 14,727,873 1.29 27 0.08 91,023 0.01 4,782 15.36 14,818,896 1.30
5,001 - 10,000 2,782 8.93 19,260,517 1.68 31 0.10 234,640 0.02 2,813 9.03 19,495,157 1.70
10,001 - 20,000 1,946 6.25 26,818,256 2.34 33 0.11 460,368 0.05 1,979 6.36 27,278,624 2.39
20,001 - 30,000 726 2.33 17,863,824 1.56 12 0.04 263,160 0.02 738 2.37 18,126,984 1.58
30,001 - 40,000 375 1.20 12,915,261 1.13 6 0.02 216,717 0.02 381 1.22 13,131,978 1.15
40,001 - 50,000 250 0.80 11,275,681 0.99 5 0.02 230,322 0.02 255 0.82 11,506,003 1.01
50,001 - 100,000 505 1.62 35,643,229 3.11 15 0.05 1,155,731 0.10 520 1.67 36,798,960 3.21
100,001 - 1,000,000 407 1.31 101,020,978 8.83 21 0.07 6,904,840 0.60 428 1.38 107,925,818 9.43
Over 1,000,000 54 0.17 818,667,020 71.54 12 0.04 65,446,777 5.72 66 0.21 884,113,797 77.26
Total 30,902 99.25 1,069,322,139 93.44 235 0.75 75,051,816 6.56 31,137 100.00 1,144,373,955 100.00

Sampath Bank PLC - Ordinary Shares

Top 20 Shareholders
No. Name of the Shareholder 31st December 2022 31st December 2021*
No. of % Holding No. of % Holding
Shares Shares
1 VALLIBEL ONE PLC 171,117,084 14.95 171,117,084 14.95

2 AYENKA HOLDINGS PRIVATE LIMITED 114,123,916 9.97 112,273,166 9.81
3 EMPLOYEES' PROVIDENT FUND 114,123,780 9.97 114,123,780 9.97
4 MR Y.S.H.I. SILVA** 93,799,287 8.20 93,799,287 8.20
5 ROSEWOOD (PVT) LIMITED-ACCOUNT NO.1 51,555,893 4.51 51,595,893 4.51
6 SENTHILVERL HOLDINGS (PVT) LTD 51,380,173 4.49 29,688,375 2.59
7 PHANTOM INVESTMENTS (PRIVATE) LIMITED 32,481,106 2.84 28,905,259 2.53
8 AKBAR BROTHERS PVT LTD A/C NO 1 27,455,171 2.40 26,355,976 2.30
9 PHOENIX VENTURES PRIVATE LIMITED 24,909,975 2.18 24,909,975 2.18
10 EMPLOYEES' TRUST FUND BOARD 22,425,477 1.96 22,425,477 1.96
11 DR T. SENTHILVERL 13,327,533 1.16 13,975,589 1.22
12 CITIBANK NEWYORK S/A NORGES BANK ACCOUNT 2 11,916,592 1.04 11,464,912 1.00
13 SAMPATH BANK PLC ACCOUNT NO 04 (SAMPATH BANK PENSION FUND) 11,546,646 1.01 11,546,646 1.01
14 MRS P.D.A.S. BERUWALAGE 10,837,215 0.95 8,787,155 0.77
15 PEMBERTON ASIAN OPPORTUNITIES FUND 10,250,000 0.90 10,000,000 0.87
16 BBH-TUNDRA SUSTAINABLE FRONTIER FUND 9,600,000 0.84 9,600,000 0.84
17 SSBT-AL MEHWAR COMMERCIAL INVESTMENTS L.L.C. 6,710,925 0.59 7,700,925 0.67
18 MAGNA WEALTH (PVT) LTD 6,511,463 0.57 7,099,989 0.62
19 NATIONAL DEVELOPMENT BANK PLC/SHANKER VARADANANDA 5,500,000 0.48 nil nil
SOMSUNDARAM
20 MELLON BANK N.A.-UPS GROUP TRUST 4,655,274 0.41 4,655,274 0.41
794,227,510 69.42 760,024,762 66.41
Total No. of shares registered 1,144,373,955 100.00 1,144,373,955 100.00

Total No. of shares unregistered - - - -
Total No. of shares issued 1,144,373,955 100.00 1,144,373,955 100.00
Shares held by Directors 2,000,117 0.17 2,000,117 0.17

Shares held by Institutions 771,040,339 67.38 762,444,502 66.63
Balance held by Others 371,333,499 32.45 379,929,336 33.20
Total No. of shares issued 1,144,373,955 100.00 1,144,373,955 100.00
No. of Public Shareholders 31,131 30,536

6KDUHVKHOGE\3XEOLF 90.62 90.62
6KDUHVKHOGE\'LUHFWRUVDQG5HODWHG3DUWLHV 9.38 9.38
* Shareholding as at 31st December 2021 of the top twenty shareholders as at 31st December 2022.
** Mr Rushanka Silva, the Managing Director of Indra Traders (Pvt) Ltd, was appointed as a Non-Executive, Non-Independent Director of the
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Traders (Pvt) Ltd, has been excluded from the public shareholding of the Bank.
As at 31st December
No. of Public Shareholders Percentage of Public Holding Float Adjusted Market Capitalisation
31,131 90.62% Rs 35 Bn
2022 31,131 2022 90.62 2022 35
2021 30,536 2021 90.62 2021 54
2020 26,157 2020 90.64 2020 47
The Bank complies with the minimum public holding requirement under option 1 of Listing Rules Section 7.13.1 (a).

Performance Compared to Colombo Stock Exchange

Index Rs Mn
15,000 1,500
12,500 1,250
10,000 1,000
7,500 750
5,000 500
2,500 250
0 0
Jan-22
)HE
Mar-22
May-22
Jun-22
Jul-22
Aug-22
Sep-22
Oct-22
Nov-22
Dec-22
Apr-22
All Share Price Index S&P SL 20 Index 'LYHUVLȴHG)LQDQFLDOVΖQGH[

Banks Index Sampath Bank’s Share Turnover (RHS)
Subsidiaries - Ordinary Shares
Siyapatha Finance PLC Sampath Centre Limited SC Securities (Pvt) Sampath Information
Limited Technology Solutions
Limited
No. of Stated No. of Stated No. of Stated No. of Stated

Shares Capital Shares Capital Shares Capital Shares Capital
Rs 000 Rs 000 Rs 000 Rs 000
As at 1st January 2021 76,212,072 1,522,881 35,855,477 454,225 11,470,002 127,200 10,246,138 297,747
Add: Increase due to
scrip dividend 2,035,594 123,214 177,734 22,938 358,861 6,424 - -
Add: Allotment of rights
issue of shares 13,725,490 700,000 - - - - - -
As at 31st December
2021 91,973,156 2,346,095 36,033,211 477,163 11,828,863 133,624 10,246,138 297,747
As at 1st January 2022 91,973,156 2,346,095 36,033,211 477,163 11,828,863 133,624 10,246,138 297,747
Add: Increase due to
scrip dividend 5,192,855 328,344 278,537 39,318 261,509 11,011 363,799 16,490
As at 31st December
2022 97,166,011 2,674,439 36,311,748 516,481 12,090,372 144,635 10,609,937 314,237

Dividend Payment Details
Year Total Dividend Cash Dividend Scrip Dividend 3UR΋WIRU Dividend

Dividend Paid per Share* per Share* per Share* the Year Payout Ratio
Rs Mn Rs Rs Rs Rs Mn
1988 8.80 0.50 0.50 n/a 27

1989 13.10 0.75 0.75 n/a 20
1990 8.90 0.50 0.50 n/a 10
1991 17.70 0.50 0.50 n/a 41
1992 35.40 1.00 1.00 n/a 71
1993 35.40 1.00 1.00 n/a 122
1994 44.30 1.25 1.25 n/a 172
1995 53.10 1.50 1.50 n/a 241
1996 53.10 1.50 1.50 n/a 282
1997 53.10 1.50 1.50 n/a 322
1998 53.10 1.50 1.50 n/a 372
1999 (Interim) 116.90 3.30 n/a
4.00 261
1999 (Final) 24.80 0.70 n/a
2000 58.70 1.75 1.75 n/a 402
2001 52.14 1.75 1.75 n/a 322
2002 88.57 2.00 2.00 n/a 441
2003 (Interim) 59.78
2.00 2.00 n/a 561
2003 (Final) 21.99
2004 (Interim) 65.98
2.00 2.00 n/a 621
2004 (Final) 34.30
2005 (Interim) 87.14
2.00 2.00 n/a 821
2005 (Final) 32.21
2006 155.47 2.50 2.50 n/a 1,028
2007 206.66 3.00 3.00 n/a 1,052
2008 256.65 4.00 4.00 n/a 1,414
2009 436.19 6.25 6.25 n/a 2,098
2010 1,235.86 8.09 n/a 8.09 3,303
2011 1,426.98 9.00 4.50 4.50 3,819
2012 1,954.10 12.00 6.00 6.00 5,230
2013 1,342.63 8.00 8.00 n/a 3,430
2014 1,847.01 11.00 5.00 6.00 4,914
2015 2,240.06 13.00 6.00 7.00 6,134
2016 (Interim) 2,477.73 n/a 14.00
18.75 9,125
2016 (Final) 884.41 4.75 n/a
2017 4,598.43 17.20 n/a 17.20 12,104
2018 4,564.66 16.25 5.00 11.25 12,143
2019 4,482.13 11.75 11.75 n/a 11,151
2020 3,147.03 2.75 2.75 n/a 8,025
2021 4,863.59 4.25 4.25 n/a 12,457
2022 (Proposed) 5,264.12 4.60 3.45 1.15 13,134
* Actual dividend per share paid in each year.

GRI 2-15
Record of Scrip Issues
Year Issue Basis/ No. of Consideration Contribution to Reason for Issue

Proportion Shares Issued per Share Stated Capital
Rs Rs Mn
2010 Interim Scrip Dividend for 2010 1 for 120.74 627,596 326.00 204.6 Increase stated capital
2011 Final Scrip Dividend for 2010 1 for 43.39 3,521,294 260.00 915.5 Increase stated capital
2016 Final Scrip Dividend for 2015 1 for 36.91 4,668,414 233.44 1,089.8 Increase stated capital
2017 Interim Scrip Dividend for 2016 1 for 19.22 9,209,419 242.55 2,233.7 Increase stated capital
Record of Bonus Issues and Sub-divisions
Year Issue Basis/Proportion No. of Shares Reason for Issue

Issued
2004 Bonus Issue 1 for 6 7,380,817 %HQHȴWWRVKDUHKROGHUV

2010 Consolidation and Sub-division 11 for 10 6,888,762 %HQHȴWWRVKDUHKROGHUV
2010 Sub-division 1 for 1 76,403,986 %HQHȴWWRVKDUHKROGHUV
2021 Sub-division 3 for 1 762,915,970 %HQHȴWWRVKDUHKROGHUV
Record of Rights Issues
Year Issue Basis/Proportion No. of Price Contribution to

Shares Issued per Share Stated Capital
Rs Rs Mn
2005 Rights Issue 2005 1 for 3 held 17,221,907 60.00 1,033.3

Employee Share Option Plans
Capitalised Issue No. of Price Contribution to Reason for Issue

Year Shares Issued per Share Stated Capital
Rs Rs Mn
2011 ESOP 2010 524,924 80.00 42.0 %HQHȴWIRUVWD΍PHPEHUV

2012 ESOP 2010 2,200,436 80.00 176.0 %HQHȴWIRUVWD΍PHPEHUV
Disclosure of Related Party Transactions as per Section 9 of the CSE Listing Rules
Aggregate monetary values of the transactions carried out by the Bank with the Related Parties did not exceed the following
thresholds given in Section 9 of the CSE Listing Rules.
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lower.
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Debenture Information
(A) Market Values
Debentures - 2017/2022 Highest (Rs) Lowest (Rs) Last Traded (Rs)

2022 2021 2022 2021 2022 2021
)L[HG 101.71 n/t 101.71 n/t 101.71 n/t

Debentures - 2017/2022 were redeemed on 21st December 2022.

2022 2021 2022 2021 2022 2021
)L[HG 102.13 n/t 102.13 n/t 102.13 n/t

2022 2021 2022 2021 2022 2021
)L[HG 101.00 n/t 100.00 n/t 100.00 n/t

2022 2021 2022 2021 2022 2021
)L[HG n/t n/t n/t n/t n/t n/t
n/t - not traded
(B) Interest Rates
Debentures - 2017/2022 2022 2021

Coupon Rate (ΊHFWLYH5DWH Coupon Rate (ΊHFWLYH5DWH
)L[HG

Debentures - 2018/2023 2022 2021

)L[HG
Debentures - 2019/2024 2022 2021

)L[HG
Debentures - 2021/2028 2022 2021

)L[HG

(C) Interest Rates of Comparable Government Securities
3 Month Treasury Bill

6 Month Treasury Bill
5 Year Treasury Bond
7 Year Treasury Bond
(D) Current Yield and Yield to Maturity
Debentures - 2017/2022 Fixed: 12.50%

2022 2021
Current yield n/t

Yield to maturity of last trade n/t

2022 2021
Current yield n/t


2022 2021
Current yield n/t


2022 2021
Current yield n/t n/t

Yield to maturity of last trade n/t n/t
n/t - not traded
(E) Ratios - Bank
2022 2021
'HEWWRHTXLW\UDWLR 18.8 24.9

Interest cover (Times) 6.8 6.6
4XLFNDVVHWUDWLR 66.5 64.1
Utilisation of Funds Raised via Capital Markets

Funds Raised in Previous Years
The funds raised via capital markets in the previous years were fully utilised for the objectives stated in the relevant prospectuses.
Funds Raised from the Debenture Issue 2023/2028 on 9th February 2023
Objective Objective as per Amount Proposed Amount % of Total Amounts % of &ODUL΋FDWLRQLI

No. Prospectus Allocated as Date of Allocated Proceeds Utilised Utilisation Not Fully Utilised
per Utilisation from against including where
Prospectus as per Proceeds Allocation the Funds are
Prospectus (A) (B) (B/A) Invested
1 To increase the Tier II

capital base of the
Bank Rs 10.0 Bn 09.02.2023 Rs 10.0 Bn Rs 10.0 Bn Fully utilised
2 To improve the liquid
asset base of the Bank Rs 10.0 Bn 09.02.2023 Rs 10.0 Bn Rs 10.0 Bn Fully utilised

ECONOMIC VALUE ADDITION

ECONOMIC VALUE ADDITION - BANK
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Rs Mn Rs Mn
Average shareholders' funds 122,566 113,150

Impairment provision 130,853 58,847
253,419 171,997
3URȴWDWWULEXWDEOHWRVKDUHKROGHUV 13,134 12,457

Impairment charge 62,706 17,085
$PRXQWVZULWWHQR΍ORDQVDQGRWKHUORVVHV (1,618) (351)
74,222 29,191
(FRQRPLFFRVW PRQWKV DYHUDJH7UHDVXU\%LOOUDWHSOXVULVNSUHPLXP

Economic cost 64,115 13,932
Economic value addition 10,107 15,259
DIRECT ECONOMIC VALUE GENERATED AND DISTRIBUTED - BANK

Information on the creation and distribution of economic value provides a basic indication of how the Bank has created wealth for its
stakeholders.

Rs Mn Rs Mn
Direct Economic Value Generated

Interest income 157,619 85,987
Exchange income 16,261 4,849
Commission income 21,941 13,240
Investment income 1,103 482
Other income 703 251
197,627 104,809
Economic Value Distributed

To Depositors and Lenders
80,664 40,680
Operating Costs
Depreciation and amortisation 2,545 2,454
Fee and commission expense 2,499 1,765
Other operating expense 12,765 8,504
17,809 12,723
To Employees
Salaries 8,493 7,540
2WKHUEHQHȴWV 4,003 2,003
12,496 9,543
Payments to Government
Income tax expense 18,664 6,407
7D[HVRQȴQDQFLDOVHUYLFHV 5,176 3,901
Crop insurance levy 131 124
23,971 10,432
To Community
Corporate social responsibility projects 31 11
Corporate leadership programme for school leavers and undergraduates 79 31
Donations 1 1
111 43
Payments to Providers of Capital

Interest to debt securities holders 3,453 3,637
Dividend to shareholders 5,264 4,864
8,717 8,501
Economic value distributed 143,768 81,922
Economic value retained (after payment of dividend to shareholders) 53,859 22,887
197,627 104,809

Composition of Economic Value Generated - 2022

%
Commission Income
11.1 Exchange Income
Interest Income
79.8 Investment & Other
8.2 Income
0.9
Composition of Economic Value Generated - 2021

%
Commission Income
12.7 Exchange Income
Interest Income
82.0 Investment & Other
4.6 Income
0.7
Composition of Economic Value Distributed - 2022

% Operating Costs
To Employees
Payments to
To Depositors & Lenders 12.4 16.7 Government
56.1 Payments to Providers
8.7 6.0 of Capital
0.1 To Community
Composition of Economic Value Distributed - 2021

% Operating Costs
To Employees
15.6 Payments to
To Depositors & Lenders 12.7
Government
49.65 Payments to Providers
11.6 10.4 of Capital
To Community: 0.05%

GRI 2-12,23
COMPLIANCE WITH GOVERNANCE DIRECTIONS AND CODES

The Banking Act Direction No. 11 of 2007 and Subsequent Amendments thereto on Corporate Governance for Licensed
Commercial Banks in Sri Lanka Issued by the Central Bank of Sri Lanka (CBSL)
CBSL Principle, Compliance and Implementation Complied

Section
3(1) RESPONSIBILITIES OF THE BOARD
(1) 3(1)(i) Ensuring Strengthened Safety and Soundness of the Bank
(a) Setting Strategic Objectives and Corporate Values

The Bank’s strategic objectives and corporate values are determined by the Board and are given on
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EULHȴQJVHVVLRQVDQGUHLQIRUFHGE\WKH&RUSRUDWH0DQDJHPHQW7HDP6WUDWHJLFREMHFWLYHVDQGFRUSRUDWH
values are also conveyed to new recruits as a part of their Induction programme.
(b) Overall Business Strategy including Risk Policy and Management

The revolving Strategic Plan for the period 2022-2024 that was approved by the Board during 2021 in
consultation with the Corporate Management was successfully implemented with regular reviews. The
Strategic Plan for the year 2023 was duly approved by the Board in 2022. In addition, the Risk
Management framework and mechanisms have also been approved by the Board in line with the
Strategic Plan 2023. Measurable goals for the Bank as a whole have been set with performance
milestones that are to be measured quarterly or more frequently if required.
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to prepare a long term strategic plan, which is expected to be completed within 2023. This will involve
extensive analysis of internal and external factors such as local and international economic/business
environment, opportunities, technology, risks, compliance etc., and involvement of all stakeholders
during the strategic planning and implementation process.
(c) Risk Management

The Board Integrated Risk Management Committee (BIRMC) is responsible for independently reviewing,
identifying, measuring, monitoring and controlling all the risks. To ensure this process, the BIRMC is
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setting risk governance structures, and implementing systems to measure, monitor and manage the
principal risks. The BIRMC is under the purview of the Main Board and responsible for updating
VLJQLȴFDQWULVNHYHQWVWRWKHPDLQ%RDUG7KHIROORZLQJUHSRUWVSURYLGHIXUWKHULQVLJKWVLQWKLVUHJDUG
Ì Risk Management Report is on pages 204 to 217.

Ì Board Integrated Risk Management Committee Report is on pages 198 to 200.
(d) Communication with all Stakeholders

A recently reviewed Board-approved Communication policy is in place and serves as the basis for
communicating with all stakeholders, including depositors, creditors, shareholders and borrowers.
(e) Internal Control System and Management Information Systems

The Board reviews the adequacy and the integrity of the Bank’s internal control systems and
management information systems based on the reports provided by the Board Audit Committee (BAC).
Accordingly, the BAC reviews Internal Audit reports submitted by the Internal Audit Department and
monitors the follow up action. Considering the reports provided by the BAC in 2022, the Board
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Refer pages 232 and 233 for Directors’ Statement on Internal Control Over Financial Reporting.
(f) Key Management Personnel (KMPs)

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$VVLVWDQW&RPSDQ\6HFUHWDU\DV.H\0DQDJHPHQW3HUVRQQHOEHLQJȊ2ɝFHUV3HUIRUPLQJ([HFXWLYH
Functions of Licensed Commercial Banks (LCBs)”, as required by the relevant regulations imposed by the
CBSL for the LCBs. All appointments of designated KMPs are recommended by the Board Nomination
Committee and approved by the Board.

MANAGEMENT DISCUSSION GOVERNANCE AND SUPPLEMENTARY
AND ANALYSIS RISK MANAGEMENT
INFORMATION
433
433
GRI 2-15

Section
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$UHDVRIDXWKRULW\DQGNH\UHVSRQVLELOLWLHVKDYHEHHQGHȴQHGIRU'LUHFWRUVDQG.03VWKURXJKWKH&RGHRI
Conduct and Governance Requirement for Directors" and the relevant Position Description of the KMPs
respectively.
The Board of Directors and KMPs have delivered the entrusted responsibilities at an optimum level under
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K 2YHUVLJKWRI$ΊDLUVRIWKH%DQNE\.H\0DQDJHPHQW3HUVRQQHO
KMPs make regular presentations to the Board and Board Sub-Committees on matters under their
respective purview and are also regularly called in by respective forums to explain matters related to their
areas of operation.
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'LUHFWRUVDQG.03V0DQDJHPHQWRI&RQΌLFWRI,QWHUHVWDQG'HWHUPLQDWLRQRI:HDNQHVVHV
7KHH΍HFWLYHQHVVRIWKH%RDUGȇVRZQJRYHUQDQFHSUDFWLFHVLQFOXGLQJWKH3ROLF\RQ6HOHFWLRQ1RPLQDWLRQ
Appointment and Election of Directors, Procedure on Selection and Appointment of CEO and KMP and the
3ROLF\RQ0DQDJLQJ&RQȵLFWVRIΖQWHUHVWDUHDOOSHULRGLFDOO\UHYLHZHGE\WKH%RDUG7KHVXPPDU\RIDQQXDO
self-evaluations submitted by individual directors for 2021 was reviewed and discussed collectively by the
Board during 2022, to determine weaknesses and implement necessary changes as appropriate.
(j) Succession Plan for Key Management Personnel
The Bank develops and updates the succession plan for Key Management Personnel aligned to the Bank’s
strategic objectives to ensure minimum 1:1 backup ratio as appropriate which even includes the position of
Managing Director.
(k) Regular Meetings with Key Management Personnel
KMPs are called upon as and when required to attend meetings of the Board and its Sub-Committees to
review progress towards corporate objectives, policies and other matters relating to the scope of work
under their respective purview.
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Directors are briefed on developments in the regulatory environment at Board Meetings to ensure that
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7KH%DQNKDVDOZD\VPDLQWDLQHGDQH΍HFWLYHUHODWLRQVKLSZLWKWKHUHJXODWRUV)XUWKHUWKH0'RUKLV
nominee attended all scheduled CEO/MD forums on Governance organised by CBSL during the year 2022.
(m) Hiring and Oversight of External Auditor
The BAC carries out necessary due diligence regarding the hiring of the External Auditors and makes
recommendations to the Board. The appointment of the External Auditor is made at the Bank's Annual
General Meeting (AGM). The BAC is responsible for overseeing the work of the External Auditor and
reporting to the Board in this regard if a necessity arises. An independent consultant has been appointed
WRWKH%$&WRSURYLGHDGYLVRU\VHUYLFHVWRGLVFKDUJHWKHLUUHVSRQVLELOLWLHVH΍HFWLYHO\
(2) 3(1)(ii) Appointment of Chairman and MD and their Functions and Responsibilities
The Board has appointed the Chairman and MD and has approved their respective functions and
responsibilities, in order to maintain a balance between the two roles.
(3) 3(1)(iii) Board Meetings

Regular Board Meetings are held and special meetings are scheduled if the need arises. The Board met
twenty-four (24) times during 2022. The Bank has minimised obtaining approval via circulation of written
resolutions/papers and it is done only on an exceptional basis.
(4) 3(1)(iv) Arrangements for Directors to include Proposals in the Agenda

A Board-approved procedure is in place to enable all Directors to include matters and proposals in the agenda.
Monthly meetings are scheduled and informed to the Board at the beginning of each calendar year to enable
submission of proposals in the agenda for regular meetings where such matters and proposals relating to the
promotion of business and the management of risk of the Bank.

GRI 2-15

Section
(5) 3(1)(v) Notice of Meetings

Notice of regular Board Meetings are circulated among the Directors generally seven days prior to the
meeting, providing Directors an opportunity to get prepared and attend the same.
(6) 3(1)(vi) Directors’ Attendance

The Directors are apprised of their attendance in accordance with the Banking Act Direction No. 11 of 2007
on Corporate Governance for Licensed Commercial Banks. All Directors have attended at least two-thirds of
the total number of Board meetings during the year under review.
Details of the Directors’ attendance is set out on page 175.
(7) 3(1)(vii) Appointment and setting responsibilities of Company Secretary

The Board has appointed the Company Secretary, who is an Attorney-at-Law of the Supreme Court of Sri
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7KH&RPSDQ\6HFUHWDU\FDUULHVRXWGXWLHVDVVSHFLȴHGLQWKHVWDWXWHVDQGUHJXODWLRQVWRKLVVWDNHKROGHUV
including the Board and the shareholders.
The Company Secretary guides the Board on discharging its duties and responsibilities, facilitates adherence
to best practices in Corporate Governance and apprises the Board of relevant legislative and regulatory
changes.
(8) 3(1)(viii) Directors’ Access to Advice and Services of Company Secretary

All members of the Board have the opportunity to obtain advice and services of the Company Secretary with
regard to the compliance with relevant rules, regulations, directions and statutes. Further, a Board-approved
policy is in place to facilitate this requirement.
(9) 3(1)(ix) Maintenance of Board Minutes

The Company Secretary maintains the Minutes of the Board Meetings and circulates the same amongst all
Board Members. Additionally, the Directors have access to the past Board papers and Minutes through the
secure electronic link via iPads. Further, a Board-approved procedure is in place to facilitate this requirement.
(10) 3(1)(x) 0LQXWHVWREHLQ6X΍FLHQW'HWDLODQG$FFHVVLEOHDVD5HIHUHQFHIRU5HJXODWRUVDQG6XSHUYLVRU\

Authorities
The detailed minutes of the meetings include:
Ì a summary of data and information used by the Board in its deliberations;
Ì the matters considered by the Board Members;
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Ì WKHWHVWLPRQLHVDQGFRQȴUPDWLRQVRIUHOHYDQWH[HFXWLYHVZKLFKLQGLFDWHVFRPSOLDQFHZLWKWKH%RDUGȇV
strategies and policies and adherence to relevant laws and regulations;
Ì matters related to risks to which the Bank is exposed and an overview of the risk management measures
adopted;
Ì the decisions and resolutions of Board/Board Sub-Committees.
(11) 3(1)(xi) Directors’ Ability to Seek Independent Professional Advice

In addition to the Board-approved Policy on Enabling Directors to Seek Advice and Services of Company
Secretary, the Bank has adopted a Board-approved Policy for Directors’ Access to Independent Professional
Advice to allow the Board to seek such advice when deemed necessary.
(12) 3(1)(xii) 'HDOLQJZLWK&RQΌLFWVRI,QWHUHVW

7KH'LUHFWRUVDUHFRQVFLRXVRIWKHLUREOLJDWLRQWRGHDOZLWKVLWXDWLRQVZKHUHWKHUHLVDFRQȵLFWRILQWHUHVWLQ
DFFRUGDQFHZLWKWKH%DQNȇV3ROLF\RQ0DQDJLQJ&RQȵLFWVRIΖQWHUHVWDQGWKH%DQNLQJ$FW'LUHFWLRQ1RRI
$VSHUWKHSROLF\ZKHUHWKHUHLVGHHPHGWREHDFRQȵLFWRILQWHUHVWWKHUHVSHFWLYH'LUHFWRUVUHIUDLQ
from participating in the discussions, voicing their opinion and approving the same. Additionally, the Director
concerned is not counted in the quorum in such instances. The Bank also maintains the Register of Directors’
Interests which is regularly updated in line with the regulatory requirements. In addition, Policy on Anti Bribery
Corruption and Policy on Accepting and Presenting of Gifts and Favours are in place to ensure the Bank's
commitment towards anti-corruption practices.


Section
(13) 3(1)(xiii) Formal Schedule of Matters Reserved for Board’s Decision

7KH%RDUGKDVDQDSSURYHGVFKHGXOHRIPDWWHUVVSHFLȴFDOO\UHVHUYHGIRULWVGHFLVLRQWRHQVXUHWKDWWKH
direction and control of the Bank is within its authority in line with regulatory codes, guidelines and
international best practices.
(14) 3(1)(xiv) Inform Central Bank on Probable Solvency Issues

The Bank is solvent and no situations have arisen to challenge its solvency. If such a situation arises, the Bank
will duly inform the Director of Bank Supervision of the CBSL.
As per the Bank’s Code of Conduct and Governance Requirements for Directors, the Board is responsible to
inform the Director of Bank Supervision of the CBSL and make necessary public and other disclosures upon
the occurrence of such an event.
(15) 3(1)(xv) Compliance with Capital Adequacy

The Board and the Board Capital Planning Committee (BCPC) monitor capital adequacy and other prudential
measures vis-à-vis regulatory requirement on a quarterly basis or as and when required. In addition, the Bank
KDVHVWDEOLVKHGGHȴQHGULVNDSSHWLWHIRUWKH%DQNDQGDOVRFRQVLGHUVLQGXVWU\EHQFKPDUNVLQHYDOXDWLQJ
capital adequacy requirements. During the year under review, the Bank was in compliance with the minimum
capital adequacy requirements.
In view of mitigating risks stemming out from the macroeconomic challenges, the Bank has maintained an
LQWHUQDOFDSLWDOEX΍HURQWRSRIWKHPLQLPXPFDSLWDODGHTXDF\UHTXLUHPHQWVRIWKHUHJXODWRUZKLOHHQVXULQJ
the optimum consumption of capital when considering facilities during 2022.
(16) 3(1)(xvi) Publish Corporate Governance Report in Annual Report

Corporate Governance Report is given on pages 168 to 181 and 432 to 466 setting out the level of compliance
in line with the statutory requirements.
(17) 3(1)(xvii) Self-Assessment of Directors

The Board has adopted a scheme of self-assessment to be undertaken by each Director annually, the records
of which are maintained with the Company Secretary. The assessments are compiled by the Company
Secretary and submitted to the Board of Directors for discussion and necessary action.
3(2) COMPOSITION OF THE BOARD
(18) 3(2)(i) Number of Directors

The Board comprised of Eleven (11) Directors as at 31st December 2022, which is in compliance with the
'XULQJWKH\HDUXQGHUUHYLHZ0U'HVKDOGH0HOUHVLJQHGIURPWKH%RDUGZLWKH΍HFWIURPWK0D\DQG
Mr Hiran Cabraal was appointed to the Board on 30th June 2022.
(19) 3(2)(ii) Period of Service of a Director

During the year under review, there were no Directors whose tenure of service on the Board exceeded nine
years as stipulated under the Direction No. 11 of 2007.
(20) 3(2)(iii) Appointment of an Employee as a Director

The Board comprises of Two (02) Executive Directors, complying with the prescribed requirement of the CBSL
(21) 3(2)(iv) Independent Non-Executive Directors

The Board has Seven (07) Independent Directors out of Eleven (11) Directors which is well above the
regulatory requirement.
A Board approved procedure is in place for the appointment of Directors, including the appointment of
Independent Directors complying the criteria given for independent directors in the direction.


Section
(22) 3(2)(v) Alternate Directors

There were no alternate Directors appointed during the year 2022.
(23) 3(2)(vi) Criteria for Non-Executive Directors

Non-Executive Directors are persons with credible track records and have necessary skills and experience to
EULQJDQLQGHSHQGHQWMXGJHPHQWRQRYHUDOOIXQFWLRQVRIWKH%RDUG7KHSURȴOHVRIWKH1RQ([HFXWLYH
Directors are detailed on pages 182 to 185.
(24) 3(2)(vii) More than half the quorum of Board Meetings to comprise Non-Executive Directors
This requirement is strictly observed as evidenced by the attendance of the Board members at the meetings
for the year 2022.
(25) 3(2)(viii) Identify Independent Non-Executive Directors in Communications and Disclose the Categories of
Directors
ΖQGHSHQGHQW1RQ([HFXWLYH'LUHFWRUVDUHH[SUHVVO\LGHQWLȴHGE\VSHFLI\LQJWKHLULQGLYLGXDOGLUHFWRUVKLSVWDWXV
in all corporate communications that disclose the names of Directors of the Bank. The composition of the
Board, by category of Directors, including the names of the Chairman, Executive/Non-Executive Directors and
Independent/Non-Independent Directors are given on page 175 of the Corporate Governance Report.
(26) 3(2)(ix) Appointments to the Board

The Board has established a Board Nomination Committee (BNC) to make recommendations regarding the
appointment of new Directors. Accordingly, new Directors including the Executive Directors are appointed by
the Board upon considering the recommendations of the BNC and the Bank’s succession arrangements for
the Board. A transparent procedure supports the appointment of Directors.
(27) 3(2)(x) Election of Directors Filling Casual Vacancies

In accordance with the provisions in the Articles of Association and the CBSL Direction, Directors appointed to
the Board after the last AGM will stand for election by the shareholders at the subsequent AGM.
During the year under review, Mr Hiran Cabraal who was appointed to the Board w.e.f. 30th June 2022 will
stand for election by shareholders at the 37th AGM to be held on 30th March 2023.
(28) 3(2)(xi) Communication of Reasons for Removal or Resignation of Director

Resignations of Directors and the reasons for same are informed to the regulatory authorities as per the
requirements of the CSE Listing Rules and the Companies Act No. 07 of 2007 together with a statement
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'XULQJWKH\HDUXQGHUUHYLHZ0U'HVKDOGH0HOWHQGHUHGKLVUHVLJQDWLRQZLWKH΍HFWIURPWK0D\
(29) 3(2)(xii) Prohibition of Directors or Employees of a Bank becoming a Director at another Bank
The Board and the Board Nomination Committee take into account this requirement in their deliberations
when considering appointments of Directors. The Employee Code of Conduct prohibits employees to be
elected/nominated as a Director of another bank.
3(3) CRITERIA TO ASSESS FITNESS AND PROPRIETY OF DIRECTORS
(30) 3(3)(i) Retiring age of directors

There are no Directors who are over Seventy (70) years of age.
(31) 3(3)(ii) Directors should not hold Directorships of more than 20 Companies
None of the Sampath Bank Directors hold Directorships of more than Twenty (20) companies/entities/
institutions inclusive of Subsidiary Companies of the Bank.
(32) 3(3)(iii) &RROLQJRΊSHULRGZKHQDSSRLQWLQJ'LUHFWRUVRU0'

7KH%DQNKDVFRPSOLHGZLWKWKHGLUHFWLRQVDSSOLFDEOHIRUFRROLQJR΍SHULRGZKHQDSSRLQWLQJ0U+LUDQ&DEUDDO
to the Board on 30th June 2022.


Section
3(4) MANAGEMENT FUNCTIONS DELEGATED BY THE BOARD
(33) 3(4)(i) All Directors to Understand and Study Delegation Arrangements

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RɝFHUVRIWKHPDQDJHPHQW
(34) 3(4)(ii) Extent of Delegation should not Hinder Board’s Ability to Discharge its Functions
The Board delegates authority to the Management to carry out certain duties from time to time, to an extent
that such delegation does not hinder the Board’s ability to discharge its functions within the provisions of the
Bank’s Articles of Association. The Management, who carries out duties on behalf of the Board under such
delegated authority are required to report to the Board regularly on such matters attended by them.
(35) 3(4)(iii) Review Delegation Arrangements Periodically to Ensure Relevance to Operations of the Bank
The Board reviews and approves the delegation arrangements which are in place, as and when required, and
ensures that the extent of delegation addresses the needs of the Bank whilst enabling the Board to discharge
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3(5) THE CHAIRMAN AND MANAGING DIRECTOR
(36) 3(5)(i) Separation of Roles

The roles of the Chairman and MD are separate and their respective duties are documented and approved by
the Board.
(37) 3(5)(ii) Non-Executive Chairman and Appointment of a Senior Independent Director

The Chairman is a Non-Executive, Non-Independent Director, hence the Board has appointed Mr Dilip de S
Wijeyeratne as the Senior Independent Director (SID). This has been disclosed in the Annual Report, and a
Board-approved Terms of Reference (TOR) of the SID is in place to ensure the independent element in
decision making.
(38) 3(5)(iii) Disclosure of the Identity of the Chairman and MD and any Relationships among the Board Members
The identity of the Chairman and MD are disclosed in the Annual Report on pages 182 to 185.
7KHUHLVQRPDWHULDOȴQDQFLDOEXVLQHVVRUIDPLO\UHODWLRQVKLSVEHWZHHQWKH&KDLUPDQ0'DQGRWKHUPHPEHUV
of the Board as disclosed on pages 182 to 185 and in Note 47 to the Financial Statements given on pages 347
to 350. Above disclosures are made as per the annual declarations and the Register of Directors’ Interests
which is updated regularly.
(39) 3(5)(iv) Chairman to provide leadership to the Board

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and appropriate issues are discussed by the Board in a timely manner.
Aforementioned elements are assessed annually by the Board through the Performance Evaluation of the
Board of Directors.
(40) 3(5)(v) Chairman’s Responsibility for Agenda

The Company Secretary draws up the agenda for the meetings in consultation with the Chairman.
(41) 3(5)(vi) Ensure that Directors are Properly Briefed and Provided with Adequate Information
The Chairman ensures that the Board is adequately briefed and informed regarding matters arising at Board
meetings. The following processes are in place to ensure the same:
Ì agenda and Board papers are circulated with adequate time for the Directors to go through the same;
Ì UHOHYDQWPHPEHUVRIWKH0DQDJHPHQWWHDPDUHDYDLODEOHIRUH[SODQDWLRQVDQGFODULȴFDWLRQVLIUHTXLUHG
Ì management information is provided in agreed formats on a regular basis to enable Directors to assess
the performance and stability of the Bank.
(42) 3(5)(vii) Encourage Active Participation by all Directors and Lead in Acting in the Interests of the Bank
The Chairman encourages all Directors to make a full and active contribution in the best interest of the Bank.
This is evident from the responses in the self-evaluation forms submitted by each Director at the year end.


Section
(43) 3(5)(viii) Encourage Participation of Non-Executive Directors and Relationships between Non-Executive and
Executive Directors
7KH&KDLUPDQIDFLOLWDWHVWKHH΍HFWLYHFRQWULEXWLRQRI1RQ([HFXWLYH'LUHFWRUVLQSDUWLFXODUDQGHQVXUHV
constructive relations between Executive and Non-Executive Directors. Both Executive and Non-Executive
Directors actively participate at Board Meetings.
Nine (09) out of the Eleven (11) members of the Board are Non-Executive Directors. All Non-Executive
Directors participate in Sub-Committees of the Board, ensuring proactive involvement in Bank matters.
(44) 3(5)(ix) Refrain from Direct Supervision of Key Management Personnel and Executive Duties
The Chairman does not get involved in the supervision of KMPs or any other executive duties.
(45) 3(5)(x) (QVXUH(ΊHFWLYH&RPPXQLFDWLRQZLWK6KDUHKROGHUV

7KH&KDLUPDQHQVXUHVWKDWDSSURSULDWHVWHSVDUHWDNHQWRPDLQWDLQH΍HFWLYHFRPPXQLFDWLRQZLWK
shareholders and that the views of shareholders are communicated to the Board. The Board Shareholder
5HODWLRQV&RPPLWWHHKDVEHHQHVWDEOLVKHGWRHQVXUHWKDWWKHUHLVH΍HFWLYHFRPPXQLFDWLRQZLWKVKDUHKROGHUV
Historically, all General Meetings have also witnessed the active participation of shareholders.
(46) 3(5)(xi) MD Functions as the Apex Executive in Charge of the Day-to-Day Operations
The responsibility of day-to-day operations and business of the Bank have been delegated to the MD.
3(6) BOARD-APPOINTED COMMITTEES
(47) 3(6)(i) Establishing Board Sub-Committees, their Functions and Reporting
Twelve (12) Board Sub-Committees have been established by the Board. Each Sub-Committee functions
under the oversight of its respective Chair and as per the written Terms of Reference. The Company Secretary
or his nominee serves as the Secretary to all Sub-Committees and maintains Minutes and records. The
reports of the following Mandatory Board Sub-Committees are included in the Annual Report:
Ì Board Audit Committee on pages 190 to 193;
Ì Board Human Resources & Remuneration Committee on pages 194 and 195;
Ì Board Nomination Committee on pages 196 and 197;
Ì Board Integrated Risk Management Committee on pages 198 to 200;
Ì Board Related Party Transactions Review Committee on pages 201 and 202.
The respective Chairs of the above Sub-Committees were present at the 36th AGM to clarify any matters that
may be referred to them by the Chairman.
(48) 3(6)(ii) Board Audit Committee (BAC)
D 7KH&KDLUPDQWREHDQ,QGHSHQGHQW1RQ([HFXWLYH'LUHFWRUZLWK4XDOL΋FDWLRQVDQG([SHULHQFHLQ
Accountancy and/or Audit
The Chairman of the Board Audit Committee, Mr Dilip de S Wijeyeratne is an Independent Non-Executive
Director who is an Associate Member of the Institute of Chartered Accountants of Sri Lanka and a Fellow
Member of the Chartered Institute of Management Accountants, UK.
(b) Committee to Comprise Solely of Non-Executive Directors
During the year under review, all the members of the BAC were Independent, Non-Executive Directors.


Section
(c) Functions of the Board Audit Committee

In accordance with its TOR, the BAC has made the following recommendations on matters in connection
with the:
Ì appointment of the External Auditor for audit services to be provided in compliance with the
relevant statutes;
Ì implementation of the Central Bank guidelines issued to Auditors from time to time;
Ì application of the relevant accounting standards;
Ì determination of the service period, audit fee and any resignation or dismissal of the Auditor.
Ì the BAC ensures that the service period of the engagement of the External Audit partner shall not
H[FHHGȴYH\HDUVDQGWKDWWKHSDUWLFXODU$XGLWSDUWQHULVQRWUHHQJDJHGIRUWKHDXGLWEHIRUHWKH
expiry of three years from the date of the completion of the previous term.
G 5HYLHZDQG0RQLWRU([WHUQDO$XGLWRUȆV,QGHSHQGHQFH2EMHFWLYLW\DQGWKH(ΊHFWLYHQHVVRIWKH
Audit Processes
7KH%$&UHYLHZVDQGPRQLWRUVWKH([WHUQDO$XGLWRUȇVLQGHSHQGHQFHREMHFWLYLW\DQGH΍HFWLYHQHVVRIWKHLU
audit processes in accordance with the applicable standards and best practices.
(e) Provision of Non-Audit Services by the External Auditor

A Board-approved Policy on “Engagement of External Auditors for Non-Audit Services” is in place. When
assigning non-audit services to External Auditors, BAC ensures the availability of required skills and
experience and ensures that independence and/or objectivity will not be impaired.
When such services are intended to be obtained from External Auditor, required approval is sought from
the BAC in accordance with the regulations.
(f) Determine the Nature and Scope of Audit with the External Auditors
7KH%$&GLVFXVVHGDQGȴQDOLVHGZLWKWKH([WHUQDO$XGLWRUVWKHQDWXUHDQGVFRSHRIWKHDXGLWWRHQVXUH
that it includes:
Ì an assessment of the Bank’s compliance with the relevant Directions in relation to Corporate
Governance and Internal Controls Over Financial Reporting;
Ì WKHSUHSDUDWLRQRIȴQDQFLDOVWDWHPHQWVIRUH[WHUQDOSXUSRVHVLQDFFRUGDQFHZLWKUHOHYDQW
accounting principles and reporting obligations.
As all audits within the group are carried out by the same External Auditor, there was no requirement to
discuss arrangements for coordinating activities with other auditors.
(g) Review Financial Information of the Bank

7KH%$&UHYLHZVWKHȴQDQFLDOLQIRUPDWLRQRIWKH%DQNLQRUGHUWRPRQLWRUWKHLQWHJULW\RILWV)LQDQFLDO
6WDWHPHQWV$QQXDO5HSRUW$FFRXQWVDQG4XDUWHUO\5HSRUWVSUHSDUHGIRUGLVFORVXUHDQGWKHVLJQLȴFDQW
ȴQDQFLDOUHSRUWLQJMXGJPHQWVFRQWDLQHGWKHUHLQ:KHQUHYLHZLQJWKH%DQNȇVDQQXDOUHSRUWDQGDFFRXQWV
and quarterly reports before submission to the Board the committee, focuses on the following:
Ì major judgemental areas;
Ì any changes in accounting policies and practices;
Ì VLJQLȴFDQWDGMXVWPHQWVDULVLQJIURPWKHDXGLW
Ì the going concern assumption;
Ì the compliance with relevant accounting standards and other legal requirements.
(h) Discussions with External Auditor without the Executive Management on Interim and Final Audits
7KH%$&GLVFXVVHVLVVXHVSUREOHPVDQGUHVHUYDWLRQV LIDQ\ DULVLQJIURPWKHLQWHULPDQGȴQDODXGLWV
with the External Auditors. The BAC met the External Auditors in the absence of key management
personnel of the Bank on Two (02) occasions during the year 2022.


Section
(i) Review of Management Letter and Bank’s Response

The BAC has reviewed the External Auditor’s Management Letter and the Management’s responses
thereto.
(j) Review of Internal Audit Function

The BAC has oversight of the Internal Audit function and has the following responsibilities with regard to
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Ì reviewed and discussed with the Chief Internal Auditor (CIA) the Annual Audit Plan, the adequacy
of the scope and functions and the resources of Internal Audit Department (IAD);
Ì the Audit Plan is approved by the BAC and the progress is reviewed and discussed in the BAC
meetings. The BAC reviewed the internal audit reports along with the recommendations given by
the IAD and ensured that appropriate actions are taken by the management to rectify the
concerns raised by the IAD;
Ì SHUIRUPDQFHRIWKH&Ζ$DQGWKHVHQLRUVWD΍PHPEHUVRIWKHΖ$'ZDVUHYLHZHGE\WKHFRPPLWWHH
Ì %$&UHFRPPHQGVDQ\DSSRLQWPHQWRUWHUPLQDWLRQRIWKHKHDGVHQLRUVWD΍PHPEHUVWRWKH
LQWHUQDODXGLWIXQFWLRQ+RZHYHUQRDSSRLQWPHQWRUWHUPLQDWLRQRIKHDGVHQLRUVWD΍PHPEHUV
was made during the year 2022;
Ì HQVXUHGWKDWWKH%$&LVDSSULVHGRIUHVLJQDWLRQVRIVHQLRUVWD΍PHPEHUVRIWKHΖQWHUQDO$XGLW
Department including the Chief Internal Auditor, and providing an opportunity to the resigning
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Ì ensured that the internal audit function is independent of the other activities it audits and
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(k) Internal Investigations

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Management’s responses thereto. It has also ensured that the recommendations of such investigations
have been implemented.
(l) Attendees at Meetings of the Board Audit Committee

7KH&KLHI)LQDQFLDO2ɝFHUWKH&KLHIΖQWHUQDO$XGLWRUDQGDUHSUHVHQWDWLYHRIWKHH[WHUQDODXGLWRUVDWWHQG
meetings as appropriate. Consultant to the BAC attends meetings whereas other Board members and
the Managing Director may also attend meetings upon the invitation of the Committee.
The BAC met the External Auditors without the Executive Directors being present on Two (02) occasions
during the year 2022, in compliance with the requirement.
(m) Explicit Authority, Resources and Access to Information

The BAC has:
Ì explicit authority to investigate into any matter within its terms of reference;
Ì the resources which it needs to do so;
Ì full access to information;
Ì authority to obtain external professional advice and to invite outsiders with relevant experience to
attend, if necessary.
7KH725RIWKH%$&FOHDUO\GHȴQHVWKHDXWKRULW\DQGWKHUHVSRQVLELOLWLHVRIWKH&RPPLWWHHLQFRPSOLDQFH
with this Direction.
(n) Regular Meetings

The BAC has regular meetings in compliance with its Terms of Reference and schedules additional
meetings when required. Accordingly, the BAC met Fourteen (14) times during the year under review.
This includes the meetings of the BAC with the External Auditors and the meetings of the Committee
with the Internal Auditors.
Members of the Board Audit Committee are served with due notice of issues to be discussed. The
conclusions of the BAC deliberations are recorded in the minutes of the meetings maintained by the
Company Secretary or his nominee.

GRI 2-16,19,20

Section
(o) Disclosures in Annual Report

The Report of the BAC given on pages 190 to 193 includes the following:
Ì details of the activities of the BAC;
Ì number of BAC meetings held during the year;
Ì details of attendance of each individual Director at such meetings.
(p) Maintain Minutes of Meetings

The Company Secretary, his nominee or Chief Internal Auditor acts as the Secretary to the BAC and
maintains minutes of the meetings.
(q) Whistleblowing Policy and Relationship with External Auditor

7KH%DQNKDVD%RDUGDSSURYHG:KLVWOH%ORZLQJ3ROLF\ZKHUHDZKLVWOHEORZHUPD\LQFRQȴGHQFHUDLVH
FRQFHUQVDERXWSRVVLEOHLPSURSULHWLHVLQȴQDQFLDOUHSRUWLQJLQWHUQDOFRQWURORURWKHUPDWWHUV7KH
Company Secretary and the Chief Internal Auditor takes appropriate actions for all communications
UHFHLYHGLQKLVKHURɝFHLQWKLVUHJDUGLQFOXGLQJDQRQ\PRXVFRPPXQLFDWLRQVWRWKH&KDLUPDQRIWKH
BAC who addresses the issue in an appropriate manner.
7KH3ROLF\FUHDWHVDQHQYLURQPHQWRIXWPRVWFRQȴGHQWLDOLW\WUXVWDQGSURWHFWLRQWRDOOVWDNHKROGHUVZKR
UHSRUWLUUHJXODULWLHVLQJRRGIDLWKDQGHQVXUHWKDWWKH\ZLOOQRWEHSHQDOLVHGRUVX΍HUDQ\DGYHUVH
treatment for doing so.
Further, all employees are encouraged to blow the whistle to report on any form of suspected breaches
relating to anti-corruption and/or bribery under the Policy on Anti Bribery and Corruption.
The Board Audit Committee is the key representative body for overseeing the Bank’s relations with the
External Auditors and meets the External Auditors on a regular basis to discharge this function.
(49) 3(6)(iii) Board Human Resources And Remuneration Committee (BHRRC)
(a) Policy to Determine the Remuneration of Directors, MD and KMPs

A Board-approved policy to determine the "Directors’ remuneration" and a Board-approved Policy on
"Reward Management for KMPs" is in place. The term “Reward Management” includes salaries and other
VWD΍EHQHȴWVLQFOXGLQJQRQȴQDQFLDOEHQHȴWVR΍HUHGE\WKH%DQN
(b) Goals and Targets for the Directors, MD and KMPs

Goals and targets of the MD and KMPs for the year 2022 were documented and approved by the BHRRC
based on the objectives set for the year under review, whereas the existing process was further
VWUHQJWKHQHGZLWKWKHVXSSRUWRIDJOREDOO\UHFRJQLVHGFRQVXOWDWLRQȴUP7KH%RDUGDSSURYHG7HUPVRI
Reference of each Board Sub-Committee elaborate the collective goals and targets of the Directors
whereas Sub-committee wise targets are assigned to Directors based on the Terms of References of
respective Sub-committees.
(c) Evaluation of the Performance of the MD and KMPs against the Set Targets and Goals and
Determine the Basis for Revising Remuneration
The performance evaluations of the MD and KMPs for the year ended 2021 were carried out during the
year 2022.
Performance evaluations of the MD and KMPs for the year ended 31st December 2022 will be reviewed
by the Committee during the year 2023.
Standard procedures are in place for this purpose, to ensure the consistency between the Bank’s
achievement and Industry standards.
(d) MD's Presence at BHRRC Meetings

The MD attends BHRRC meetings by invitation. However, he was not present at meetings when matters
relating to him were discussed during the year.

GRI 2-12,20

Section
(50) 3(6)(iv) Board Nomination Committee (BNC)
(a) Appointment of Directors, MD and KMPs

The BNC has implemented a Board-approved Policy on Selection, Nomination, Appointment and Election
of Directors and a Board-approved Procedure on Selection and Appointment of CEO/MD and KMPs, in
accordance with regulatory requirements.
(b) Re-election of Directors

The BNC makes recommendations regarding the re-election of current Directors who retire by rotation
in terms of Article 87 of the Bank’s Articles of Association taking into account, inter-alia, the performance
and contribution made by the Director concerned towards the overall discharge of the Board’s
responsibilities. In accordance with this provision:
IROORZLQJ'LUHFWRUVZLOOUHWLUHDQGR΍HUWKHPVHOYHVIRUUHHOHFWLRQDWWKHWK$QQXDO*HQHUDO0HHWLQJ
Ì Mr Harsha Amarasekera Ì Mrs Keshini Jayawardena Ì Mr Vinod Hirdaramani
following Directors were re-elected at the 36th Annual General Meeting:

Ì Mr Rushanka Silva Ì Mr Dilip de S Wijeyeratne Ì Mr Vajira Kulatilaka
(c) Eligibility Criteria for Appointments to Key Managerial Positions including the MD
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considered for the appointment or promotion to key managerial positions as well as the position of MD.
The BNC considers the applicable statutes and guidelines in setting the relevant criteria.
(d) Fit and Proper Criteria for Directors, MD and KMPs

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UHTXLUHGDQGWKHVHZHUHVXEPLWWHGWR&%6/WRGHWHUPLQHWKDWWKH\DUHȴWDQGSURSHUSHUVRQVWRKROG
RɝFHDVVSHFLȴHGLQWKHFULWHULDJLYHQLQ%DQNLQJ$FW'LUHFWLRQ1RRIDQGDVVHWRXWLQWKH
statutes.
(e) Succession Plan and New Expertise

A Board-approved policy covering Succession Planning for retiring Directors and the MD is in place. In
addition, Succession Plan for the KMPs is in place in line with the requirements.
(f) Committee Chairman and Other Members

The BNC comprises Six (06) members out of which Four (04) members, including the Chair are
Independent, Non-Executive Directors. The MD attends meetings by invitation where necessary.
(51) 3(6)(v) Board Integrated Risk Management Committee (BIRMC)
(a) Composition of BIRMC

7KH%Ζ50&FRPSULVHVRI)RXU 1RQ([HFXWLYH'LUHFWRUV0DQDJLQJ'LUHFWRU&KLHI5LVN2ɝFHUDQG
&KLHI&RPSOLDQFH2ɝFHU2WKHU.03VVXSHUYLVLQJFUHGLWPDUNHWOLTXLGLW\RSHUDWLRQVVWUDWHJLFULVNVHWF
are invited to attend the meetings on a regular basis.
(b) Risk Assessment of the Bank, Subsidiary Companies and Associate Companies
The policies on Credit Risk, Market Risk, Operations, Liquidity and Compliance Risk Management etc.
recommended by the BIRMC and approved by the Board, provide the framework for the assessment and
H΍HFWLYHPDQDJHPHQWRI%DQNZLGHULVNV$FFRUGLQJO\WKH%Ζ50&GLVFKDUJHVLWVUHVSRQVLELOLWLHVE\
periodically reviewing reports on pre-established risk indicators prepared by the Risk Management Unit.
The BIRMC assesses all risks of the Bank on a monthly basis through Key Risk Indicators, Risk
Dashboards and through Risk Assessment reports done for the Bank. The Bank has formed
PDQDJHPHQWFRPPLWWHHVWRDVVHVVULVNVRQDPRQWKO\TXDUWHUO\EDVLVDQGDQ\VLJQLȴFDQWULVNUHODWHG
ȴQGLQJDUHVXEPLWWHGIRUWKH%Ζ50&IRUWKHSHUXVDORIWKH&RPPLWWHHZKHUHDVWKH%Ζ50&PLQXWHVDUH
tabled at the main Board.

GRI 2-15

Section
F 5HYLHZWKH$GHTXDF\DQG(ΊHFWLYHQHVVRI0DQDJHPHQW/HYHO&RPPLWWHHV
7KH%Ζ50&UHYLHZVWKHDGHTXDF\DQGWKHH΍HFWLYHQHVVRIDOOPDQDJHPHQWOHYHOFRPPLWWHHVLQFOXGLQJ
the Credit Policy, Risk and Portfolio Review Committee and the Assets-Liability Committee (ALCO) to
DGGUHVVVSHFLȴFULVNVDQGWRPDQDJHWKRVHULVNVZLWKLQWKHODLGGRZQOLPLWVVSHFLȴHGE\WKH%Ζ50&DV
required by the Direction. The details of Management-levels Committees are given on page 178.
G &RUUHFWLYH$FWLRQWR0LWLJDWH6SHFL΋F5LVNV([FHHGLQJ3UXGHQWLDO/HYHOV
7KH%Ζ50&WDNHVSURPSWFRUUHFWLYHDFWLRQWRPLWLJDWHWKHH΍HFWVRIVSHFLȴFULVNVLQFDVHVXFKULVNVDUHDW
levels beyond the prudent risk levels decided by BIRMC based on the Bank’s policies and regulatory and
supervisory requirements.
The Risk Appetite Limits and Key Risk Indicators of the Bank are approved by the BIRMC and the Board
and are monitored on a regular basis.
(e) Frequency of Meetings

The BIRMC has regular meetings in compliance with its Terms of Reference and schedules additional
meetings when required. The agenda covers matters pertaining to all aspects of risk management
including updated Business Continuity Plans. The BIRMC met seven (07) times during the year.
I 2΍FHUV5HVSRQVLEOHIRU)DLOXUHWR,GHQWLI\6SHFL΋F5LVNVRU,PSOHPHQW&RUUHFWLYH$FWLRQ
BIRMC refers such instances, if any, to the Human Resources department in order to take prompt
FRUUHFWLYHDFWLRQVDVGLUHFWHGLQUHVSHFWRIWKHRɝFHUVLGHQWLȴHGWREHUHVSRQVLEOHIRUIDLOXUHWRLGHQWLI\
VSHFLȴFULVNV
(g) Risk Assessment Report to Board

The Company Secretary submits summarised report of the high priority risks to the Board on a monthly
EDVLVXSRQWKHFRQȴUPDWLRQVRIWKHUHVSHFWLYHGHSDUWPHQWVLH5LVN&RPSOLDQFHDQGWKHΖQIRUPDWLRQ
Security Departments.
(h) Compliance Function

An Independent Compliance Department has been established to assess the Bank’s compliance with
laws, regulations and regulatory guidelines. In addition, the Compliance Department assesses the Bank’s
compliance with internal controls and approved policies on all areas of business operations. This
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functionally reports to the BIRMC and is responsible for escalating the level of compliance of the Bank
ZLWK5HJXODWLRQV/DZVDQGΖQWHUQDO&RQWUROV7KH&&2VXEPLWV$VVXUDQFH&HUWLȴFDWHVRQFRPSOLDQFH
with mandatory banking and other statutory requirements on a quarterly basis to BIRMC.
3(7) RELATED PARTY TRANSACTIONS
(52) 3(7)(i) &DWHJRULHVRI5HODWHG3DUWLHVDQG$YRLGDQFHRI&RQΌLFWVRI,QWHUHVW

$GXO\DSSURYHGGRFXPHQWHGSURFHVVLVLQSODFHIRUWKHLGHQWLȴFDWLRQRIDQGGHDOLQJZLWKFDWHJRULHVRI
5HODWHG3DUWLHVDQGWKHLUWUDQVDFWLRQVLQRUGHUIRUWKH%DQNWRDYRLGDQ\FRQȵLFWVRILQWHUHVWWKDWPD\DULVH
from any transaction with the relevant parties and the same has been reviewed during the year. The
DYRLGDQFHRIFRQȵLFWVRILQWHUHVWLVVXSSRUWHGE\WKH%RDUGDSSURYHG3ROLF\RQ0DQDJLQJFRQȵLFWVRIΖQWHUHVW
Further, Directors and the KMPs are individually requested to declare their transactions with the Bank on a
periodic basis.
(53) 3(7)(ii) Related Party Transactions Covered by Direction

The following Related Party Transactions are covered in the monitoring process:
Ì JUDQWRIDFFRPPRGDWLRQDVGHȴQHGLQWKH0RQHWDU\%RDUGȇV'LUHFWLRQVRQPD[LPXPDPRXQWRI
accommodation pursuant to Section 47 of the Banking Act No. 30 of 1988;
Ì creation of any liabilities of the Bank in the form of deposits, borrowings and investments;
Ì SURYLVLRQRIDQ\VHUYLFHVRIDȴQDQFLDORUQRQȴQDQFLDOQDWXUHSURYLGHGWRWKH%DQNRUUHFHLYHGIURPWKH%DQN
Ì FUHDWLRQRUPDLQWHQDQFHRIUHSRUWLQJOLQHVDQGLQIRUPDWLRQȵRZVEHWZHHQWKH%DQNDQGDQ\5HODWHG3DUWLHV
ZKLFKPD\OHDGWRWKHVKDULQJRISRWHQWLDOO\SURSULHWDU\FRQȴGHQWLDORURWKHUZLVHVHQVLWLYHLQIRUPDWLRQWKDW
PD\JLYHEHQHȴWVWRVXFK5HODWHG3DUWLHV


Section
(54) 3(7)(iii) 0RQLWRULQJRI5HODWHG3DUW\7UDQVDFWLRQV'H΋QHGDV0RUH)DYRXUDEOH7UHDWPHQW

7KH%DQNKDVLPSOHPHQWHGDSURDFWLYHV\VWHPWRHQVXUHWKDWQRIDYRXUDEOHWUHDWPHQWLVR΍HUHGWR5HODWHG
Parties. The Procedure on Related Party Transactions prohibits transactions, which would grant related parties
more favourable treatment than that accorded to other customers including the following:
Ì granting of “total net accommodation” to related parties, exceeding a prescribed percentage of the
Bank’s regulatory capital;
Ì charging of a lower rate of interest than the Bank’s best lending rate or paying more than the Bank’s
deposit rate for a comparable transaction with an unrelated comparable counterparty;
Ì providing of preferential treatment, such as favourable terms, covering trade losses and/or waiving fees/
commissions, that extend beyond the terms granted in the normal course of business undertaken with
unrelated parties;
Ì providing services to or receiving services from a related party without an evaluation procedure;
Ì DLQWDLQLQJUHSRUWLQJOLQHVDQGLQIRUPDWLRQȵRZVWKDWPD\OHDGWRVKDULQJSRWHQWLDOO\SURSULHWDU\
P
FRQȴGHQWLDORURWKHUZLVHVHQVLWLYHLQIRUPDWLRQZLWKUHODWHGSDUWLHVH[FHSWDVUHTXLUHGIRUWKH
performance of legitimate duties and functions.
(55) 3(7)(iv) Granting Accommodation to a Director or Close Relation of a Director

Principles of the Direction are followed when granting accommodations to Directors or close relations of a
Director.
(56) 3(7)(v) Accommodation Granted to a Person or a Close Relation of a Person or to any Concern in which the
Person has Substantial Interest, who Subsequently are Appointed as Directors of the Bank
The Procedure on "Related Party Transactions” and the Directive on "Monitoring Accommodation Granted to
an Individual/Close Relations of an Individual or Concerns in which an Individual has a Substantial Interest
when such Individual is Subsequently Appointed as a Director or when a Director Acquires a Substantial
Interest in a Concern Subsequent to the Appointment as a Director” are in place to address the said
requirement.
(57) 3(7)(vi) Favourable Treatment (Waiver of Fees and/or Commissions) or Accommodation to Bank Employees or
their Close Relations
No favourable treatment/accommodation is provided to Bank employees other than those provided under
WKHVFKHPHVRIVWD΍EHQHȴWVDQGDVSHUWKH%RDUGDSSURYHG3ROLF\RQ5HZDUG0DQDJHPHQWIRU.H\
Management Personnel. Employees of the Bank are informed through operational circulars to refrain from
granting favourable treatment to employees or their close relations or to any concern in which an employee
or close relation has a substantial interest except as provided in the Bank’s Operational Guidelines and
Directives.
(58) 3(7)(vii) Remission of Accommodation Subject to Monetary Board Approval

The situation has not arisen in the Bank during the year under review and necessary operating instructions as
stated above have been issued to prevent non-compliance with this requirement.
3(8) DISCLOSURES
(59) 3(8)(i) Publish Annual and Quarterly Financial Statements

Annual audited Financial Statements and Quarterly Financial Statements are prepared and published in
accordance with the formats prescribed by the supervisory and regulatory authorities and applicable
Accounting Standards.
(60) 3(8)(ii) Disclosures in Annual Report
D $6WDWHPHQWWRWKH(ΊHFWWKDWWKH$QQXDO$XGLWHG)LQDQFLDO6WDWHPHQWVKDYHEHHQ3UHSDUHGLQ
OLQHZLWK$SSOLFDEOH$FFRXQWLQJ6WDQGDUGVDQG5HJXODWRU\5HTXLUHPHQWV,QFOXVLYHRI6SHFL΋F
Disclosures
$6WDWHPHQWWRWKLVH΍HFWLVLQFOXGHGLQWKH$QQXDO5HSRUWRIWKH%RDUGRI'LUHFWRUVRQWKH$΍DLUVRIWKH
Company given on pages 221 to 231.

GRI 2-15,19

Section
(b) Report by the Board on the Bank’s Internal Control Mechanism

The Annual Report includes the Directors’ Statement on Internal Control over Financial Reporting given
RQSDJHVDQGZKHUHWKH%RDUGFRQȴUPVWKDWWKHȴQDQFLDOUHSRUWLQJV\VWHPKDVEHHQGHVLJQHG
WRSURYLGHUHDVRQDEOHDVVXUDQFHUHJDUGLQJWKHUHOLDELOLW\RIȴQDQFLDOUHSRUWLQJDQGWKDWWKHSUHSDUDWLRQ
RIȴQDQFLDOVWDWHPHQWVIRUH[WHUQDOSXUSRVHVKDVEHHQGRQHLQDFFRUGDQFHZLWKUHOHYDQWDFFRXQWLQJ
principles and regulatory requirements.
F ([WHUQDO$XGLWRUȆV&HUWL΋FDWLRQRQ(ΊHFWLYHQHVVRIWKH,QWHUQDO&RQWURO0HFKDQLVP5HIHUUHGLQ
3(8)(ii)(b)
7KH%RDUGKDVREWDLQHGLQGHSHQGHQWDVVXUDQFHIURPWKH([WHUQDO$XGLWRUVWRFRQȴUPWKDWH΍HFWLYHQHVV
of the Bank’s Internal Controls Over Financial Reporting system as per the ‘Sri Lanka Standard on
Assurance Engagements 3050’. This independent assurance report is published on page 234.
(d) Details of Directors

Details of Directors are given on pages 182 to 185.
Directors' interests in contracts with the Company are given below; (Including Executive Directors)
Category Amount
Rs 000
Loans 15,049
Deposits 790,406
Credit cards 4,629
Debentures 5,000
Interest income 4,383
Interest expense 42,198
Cash dividend paid 8,500
Aggregate value of remuneration/fee paid by the Bank 207,783

Post employment benefits paid 9,683
(e) Net Accommodation Granted to Each Category of Related Parties and as a Percentage of the
Bank’s Regulatory Capital
Related Party Transactions are given in Note 47 to the Financial Statements on pages 347 to 350.
Net accommodation granted to Related Parties are given below;
Category of related party transaction As a % of regulatory Amount

capital of the Bank Rs 000
Directors and close family members 0.10 114,211

KMP & close family members 0.23 263,107
Subsidiaries 6.26 7,153,356
Shareholders owning material interest in the Bank - -
Concerns in which any of the Bank's Directors or a
close relation of any of the Bank's Directors or any
of its material shareholders has a substantial
interest 14.38 16,443,882


Section
(f) Aggregate Values of Remuneration Paid to, and Transactions with Key Management Personnel
Nature of transaction Amount

Rs 000
Short-term employment benefits 624,659

Post-employment benefits 43,506
Loans & advance including credit cards 224,597
Deposit & investments 680,287
Interest income 17,567
Interest expense 62,426
Cash dividend paid 4,996
The remuneration paid to, and transactions with Executive Directors are included in 3(8)(ii)(d) above.
J ([WHUQDO$XGLWRUȆV&HUWL΋FDWLRQRI&RPSOLDQFH
7KHȴQGLQJVSUHVHQWHGLQWKH)DFWXDO)LQGLQJV5HSRUWRI([WHUQDO$XGLWRUVDGGUHVVHGWRWKH%RDUGDUH
consistent with the matters disclosed above and did not identify any inconsistencies to those reported
by the Board. The recommendations made by the Auditors where relevant will be taken into
consideration.
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Controls
The bank was levied an administrative penalty of Rs 1Mn by the Financial Intelligence Unit (FIU) for
non-compliance with Section 9 (1) of the Financial Transactions Reporting Act No 06 of 2006 (FTRA)
regarding the duty not to divulge information, as it was revealed that, there had been a breach in the
6DPSDWK%DQNȇVSURFHVVRIȴOLQJRI6XVSLFLRXV7UDQVDFWLRQVZLWKWKH)Ζ8DQGWKDWWKHEUHDFKDPRXQWHG
to limited disclosures that should have been prevented by the Bank.
$VWKHFRUUHFWLYHPHDVXUHWKH%DQNLVUHJXODUO\FRQGXFWLQJWUDLQLQJVHVVLRQVIRULWVVWD΍UHJDUGLQJWKH
application of the provisions of the Financial Transactions Reporting Act No 06 of 2006 and other rules
and regulations issued by FIU.
(i) Measures Taken to Rectify Non-Compliant Issues

There were no lapses inviting supervisory concerns in the Bank’s Risk Management System or non-
compliance with these directions that have been pointed out by the Director of Bank Supervision of the
CBSL required to be disclosed by the Bank during the year under review.
3(9) TRANSITIONAL AND OTHER GENERAL PROVISIONS

The Bank has complied with the transitional provisions, where applicable.
HARSHA AMARASEKERA NANDA FERNANDO LASANTHA SENARATNE

Chairman Managing Director Company Secretary
17th February 2023

Colombo, Sri Lanka

GRI 2-12
The Code of Best Practice on Corporate Governance 2017 issued by the Institute of Chartered Accountants of Sri Lanka
(ICASL CODE - “the Code”)
ICASL Code Principle, Compliance and Implementation Complied

Reference
SECTION 1 – THE BANK
A DIRECTORS
(1) A.1 THE BOARD

The Board comprises of Eleven (11) individuals from diverse specialisations and skill backgrounds. Of the
Eleven, Nine (09) including the Chairman are Non-Executive Directors, the Managing Director (MD) and the
&KLHI)LQDQFLDO2ɝFHU &)2 DUHWKHRQO\7ZR ([HFXWLYH'LUHFWRUVZKRUHSUHVHQWWKH&RUSRUDWH
Management.
The MD is delegated with the day-to-day functions, while the Board Sub-Committees are collectively
UHVSRQVLEOHIRUIDFLOLWDWLQJDFRQGXFLYHEXVLQHVVHQYLURQPHQWWRVXSSRUWWKHH΍HFWLYHSHUIRUPDQFHRIWKH
Bank.
(2) A.1.1 Regular Meetings

Board meetings are held monthly whilst special Board meetings are convened as and when required.
The meeting calendar detailing all Board and Board Sub-Committee meetings for the ensuing year is
prepared well in advance and circulated to all Board members.
The details of Board and mandatory Board Sub-Committee meetings for the year 2022 are given on page
175 of this Annual Report.
(3) A.1.2 Roles and Responsibilities of The Board

The Board is responsible for performance and conformance functions, out of which Strategic Planning and
policy making are the key functions of the performance functions whereas Accountability and Executive
monitoring are handled as Conformance Functions. Further, the Board monitors performance against
agreed goals and Key Performance Indicators (KPIs). During the year, the Board reviewed the progress of
the Strategic Plan for the year 2022 and approved the future strategies for the Bank.
The Board has appointed Mr Harsha Amarasekera who is a Non-Independent, Non-Executive Director as
the Chairman and Mr Dilip de S Wijeyeratne has been appointed as the Senior Independent Director to
ensure greater independence in line with the regulatory requirements.
The Managing Director and the Corporate Management team possess the necessary skills, knowledge and
experience required to implement the strategy of the Bank.
7KH%RDUG1RPLQDWLRQ&RPPLWWHHXQGHUWDNHVWKHUHVSRQVLELOLW\IRUHVWDEOLVKLQJDQH΍HFWLYHVXFFHVVLRQ
strategy with regard to the MD and Key Management Personnel (KMP). A Board approved Procedure is in
place to facilitate the Selection and Appointment of the MD and KMPs.
The budgets and the revolving Strategic Plan for the ensuing year are approved by the Board. At the review
of the Strategic Plan and Budget for 2022, the compliance with the cost budgets was also reviewed.
A Board-approved formal schedule of matters reserved to the Board for decision is in place. Further, Board
has a process of delegating authority to the management in line with the provisions of the Bank’s
Memorandum and Articles of Association, where necessary.

GRI 2-12,14,15

Reference
The Bank has implemented multiple Firewalls and other systems to secure its internal Systems. In addition,
the Bank's Information Security Department (ISD) reviews routine Vulnerability Assessments and Code
5HYLHZVWRWHVWWKHHɝFLHQF\DQGLQWHJULW\RIWKHVHΖQIRUPDWLRQV\VWHPVLQVDIHJXDUGLQJDJDLQVWH[WHUQDO
and internal breaches.
The Bank also obtains the services of an external specialist to conduct quarterly Vulnerability Assessments
and Annual Penetration Tests to identify vulnerabilities and determine possible threats in order to initiate
necessary preventive actions.
The ISD monitors Privilege Access using the latest Privilege Access Management (PAM) software. In 2022,
Risk Assessments were conducted covering all departments and the selected Branches to identify potential
information security risks and formulate appropriate risk treatment plans. Cross functional incident
response team was appointed and granted authority for taking immediate action in the event of an
information security breach to ensure business continuity and Information security.
The Board Audit Committee (BAC) reviews Internal Audit reports submitted by the Internal Audit
Department and monitors all follow up actions. Based on the assessment of Internal Control Over Financial
5HSRUWLQJ Ζ&2)5 IRUWKH'LUHFWRUVFRQȴUPHGWKDWWKH%DQNȇVΖ&2)5SURFHGXUHLVH΍HFWLYH7KH%RDUG
Audit Committee Report given on pages 190 to 193 contains a detailed account of the measures taken in
this regard.
A Board-approved Business Continuity Plan (BCP) is in place. The BCP is reviewed annually and updated to
take into account any contextual changes in the internal and external operating environments. In 2022, a
series of system simulations were carried out to ensure system readiness. The Bank established a Special
Task Force to oversee the implementation of proper BCP arrangements in response to the fuel and power
crises experienced in the country in 2022. The fast evolving situation was reviewed regularly by the Special
Task Force with appropriate BCP strategies were implemented accordingly.
$QLQGHSHQGHQW5LVN0DQDJHPHQW8QLW 508 LVLQSODFHKHDGHGE\WKH&KLHI5LVN2ɝFHUZKRIXQFWLRQDOO\

reports to the Board Integrated Risk Management Committee (BIRMC). The RMU is responsible for
DVVHVVLQJDQGLPSOHPHQWLQJDSSURSULDWHPLWLJDWLQJDFWLRQWRH΍HFWLYHO\FRQWUROWKHYDULRXVULVNV
encountered by the Bank and the Group in carrying out their respective businesses.
Compliance with Laws, Regulations and Ethical Standards applicable to the Bank are set out in Corporate
Governance Report on pages 168 - 181 and 432 - 466.
The Articles of Association of the Bank require the Directors to make decisions, to protect the interests of all
stakeholders including customers, shareholders, employees, the community, etc. Additionally, the Customer
&KDUWHUWKH%DQNȇV+53ROLF\PDQXDOWKH3ROLF\RQ0DQDJLQJ&RQȵLFWVRIΖQWHUHVWWKH%RDUG6KDUHKROGHU
Relations Committee as well as the Board Related Party Transactions Review Committee are in place to
uphold the interests of these key stakeholders.
The Board of Directors, both individually and collectively comply with best practices on economic,
environmental and social topics whilst ensuring that the interest of all shareholder groups are considered
when taking decisions.

GRI 2-14

Reference
Ì Economic Sustainability
Please refer pages 244 to 409.
Ì The Environment
Ì Labour Practice
Ì Society
Ì Product and Service Responsibility

Ì 6WDNHKROGHULGHQWL΋FDWLRQ(QJDJHPHQWDQG(ΊHFWLYH&RPPXQLFDWLRQ
Ì Sustainable Reporting and Disclosure

The Board Audit Committee and the Board respectively review and approve the Bank’s accounting policies
DQQXDOO\RUVRRQHULIUHTXLUHGWRHQVXUHWKDWWKH\DUHLQOLQHZLWKWKHEXVLQHVVPRGHORIWKH%DQNUHȵHFW
current local and international accounting standards and industry best practices.
The Board Strategic Planning Committee ensures that the revolving Strategic Plan relevant for the current
year is reviewed on a periodic basis, in order to facilitate strategic realignment wherever and whenever
deemed necessary or appropriate.
The Board, prior to approving the Strategic Plan, considered all risks highlighted by the Risk Management
Unit.
Annual Audited Financial Statements and Quarterly Financial Statements are prepared and published in
accordance with the formats prescribed by the supervisory and regulatory authorities and applicable
Accounting Standards.
7KH%RDUGLVFRPPLWWHGWRIXOȴOLWVIXQFWLRQVLQOLQHZLWKWKHODZVUHJXODWLRQVDQGJRRGJRYHUQDQFH
practices.
(4) A.1.3 Availability of A Procedure for Directors to Obtain Independent Professional Advice at the Bank’s
Expense
A Board-approved policy is in place, enabling Directors to seek and obtain independent professional advice
when necessary.
(5) A.1.4 (a) Directors’ Access to Advice and Services of the Company Secretary, the Appointment and
Removal of the Company Secretary
As per the Board-approved policy providing Directors access to advice and services of the Company
Secretary, all Directors have the opportunity to obtain the advice and services of the Company Secretary
who is considered the KMP responsible for ensuring follow-up of Board procedures, compliance with
UHOHYDQWUXOHVDQGUHJXODWLRQVGLUHFWLRQVDQGVWDWXWHV7KH$UWLFOHVRI$VVRFLDWLRQRIWKH%DQNVSHFLȴHVWKH
conditions for the appointment and removal of the Company Secretary.
(b) Insurance Cover for Board of Directors and KMPs
An insurance policy is in place in line with the regulatory requirements to cover the Board of Directors and
.03VRIWKH%DQN7KHDGHTXDF\DQGH΍HFWLYHQHVVRILQVXUDQFHFRYHUVDUHUHYLHZHGSHULRGLFDOO\ZLWKWKH
assistance of external consultants.

GRI 2-17

Reference
(6) A.1.5 Independent Judgement of Board of Directors

'LUHFWRUVH[HUFLVHLQGHSHQGHQWMXGJHPHQWLQWKHH΍HFWLYHGLVFKDUJHRIWKHLUGXWLHVDQGUHVSRQVLELOLWLHVLQ
matters relating to the Board including strategy, performance, resource allocation, risk management,
compliance and standard of business conduct.
(7) A.1.6 'HGLFDWH$GHTXDWH7LPHDQG(ΊRUWWR0DWWHUVRIWKH%RDUGDQGWKH&RPSDQ\

Dates of regular Board meetings and Board Sub-Committee meetings are scheduled well in advance and
the relevant papers are circulated, generally seven days prior to the meeting. There is provision to circulate
urgent papers closer to the meeting on an exceptional basis.
(YHU\'LUHFWRUGHGLFDWHVDGHTXDWHWLPHDQGH΍RUWWR%RDUGPDWWHUV'LUHFWRUVZKRDUHDOVRPHPEHUVRIWKH
Board Sub-Committees make a strong commitment to discharge their duties and responsibilities towards
WKHD΍DLUVRIWKH%DQN
(8) A.1.7 One-Third of the Directors can call for a Resolution to be Presented to the Board where they feel it is
in the Best Interest of the Company to do so
A Board approved procedure is in place to permit any Director to include any matter in the Board and/or in
a Sub-committee meeting agenda.
(9) A.1.8 Training for Directors

The Company Secretary, in consultation with the Chairman, recommends Directors to attend training
sessions/seminars. The annual self-assessment by Directors also covers aspects on training to identify
training needs for Directors. In addition, a formal Induction Programme is conducted for the newly
appointed Directors. Additionally, the Board encourages knowledge sharing amongst the Directors.
A dedicated knowledge sharing platform under the theme “Towards a Governance Culture” is in place to
keep the Board apprised of key developments of Corporate Governance on monthly basis. The Directors
are also informed on the important information on shareholders, including the movements in shareholding
positions of the Bank’s major shareholders.
The Board being the highest governance body also acknowledges the importance of developing and
enhancing its collective knowledge on economic, environmental and social topics. During the year 2022, the
Directors attended the following training programmes focusing on both general aspects of directorship and
PDWWHUVVSHFLȴFWRWKHLQGXVWU\
Ì Evolution of Open Banking and how it is practiced globally today.

Ì Current economic condition.
Ì Overview of New Securities and Exchange Commission Act and its application to the Board of
Directors.
Ì New changes introduced to the CSE Listing Rules.
Ì Issues in Sovereign Domestic Debt Restructuring.
Ì Awareness Training Session on "Current Economic Condition and Domestic Debt Restructuring".
Ì Awareness Session on Information Security.
Ì An Outlook of Debt Restructuring of Sri Lanka.
Ì High Level web conference on key aspects of AML/CFT (Anti-Money Laundering/Combating the
Financing of Terrorism) compliance for Board of Directors and Key Management Personnel of Licensed
Banks and Licensed Finance Companies.
(10) A.2 DIVISION OF RESPONSIBILITIES BETWEEN CHAIRMAN AND MANAGING DIRECTOR (MD)
The positions of the Chairman and the MD have been separated in line with the regulatory requirements
ensuring the balance of power and authority among the Bank’s leadership. The Chairman is a Non-Executive
Director whilst the MD serves as an Executive Director.

GRI 2-9,11

Reference
(11) A.3 CHAIRMAN’S ROLE

The Chairman’s functions and responsibilities are documented and duly approved by the Board in order to
IDFLOLWDWHWKHH΍HFWLYHGLVFKDUJHRI%RDUGIXQFWLRQV
(12) A.3.1 Conduct Board Proceedings in a Proper Manner

The routine agenda for Board Meetings is developed by the Chairman in consultation with all other
Directors and the Company Secretary taking in to consideration matters relating to the Board Meeting
covering all important areas under discussion.
The agenda and the relevant papers for discussion are generally circulated seven days prior to the meeting
by uploading the same via a secure link. Board papers are informative and any further information required
by Directors are provided by the management, upon request. A Board-approved procedure is in place
enabling all Directors to request inclusion of matters of concern in the agenda, while all Directors have
access to KMPs should they need to seek information for discussions at Board Meetings. Directors also
have access to past Board papers.
%RWK([HFXWLYHDQG1RQȂ([HFXWLYH'LUHFWRUVPDNHH΍HFWLYHFRQWULEXWLRQVDWPHHWLQJVIRUWKHEHQHȴWRI
WKH%DQNR΍HULQJWKHLUYLHZVFRQFHUQVDQGDGYLFHEDVHGRQWKHLUUHVSHFWLYHȴHOGRIH[SHUWLVHDQGWKHLU
professional experience.
The Code of Conduct and Governance Requirements for Directors and the Terms of Reference of each
Board Sub-Committee spells out the Directors’ duties and responsibilities and the standard of care
expected from them.
Board's composition being Nine (09) Non-Executive Directors and Two (02) Executive Directors, the required
balance and independence in judgements is ensured and maintained.
The Minutes of Board and Board Sub-Committee Meetings carry important concerns raised and views
expressed by Directors individually to highlight how the Board has arrived at the decision in the
deliberations as precisely as possible.
The Board is aware of its responsibilities towards all stakeholders of the Bank and are in control of the
D΍DLUVRIWKH%DQN
(13) A.4 FINANCIAL ACUMEN

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the Chairman of the BAC, Mr Dilip de S Wijeyeratne is an Independent, Non-Executive Director, an Associate
member of the Institute of Chartered Accountants of Sri Lanka and a Fellow member of the Chartered
Institute of Management Accountants, UK.
A.5 BOARD BALANCE
(14) A.5.1 1RQ([HFXWLYH'LUHFWRUVRI6X΍FLHQW&DOLEUHDQG1XPEHU
A majority of the Board comprises of Nine (09) Non-Executive Directors including the Chairman while both
MD and CFO function as Executive Directors.
The Non-Executive Directors are professionals/academics/business leaders, holding/having held senior

SRVLWLRQVLQWKHLUUHVSHFWLYHȴHOGVZKRDUHGHHPHGWREHRIVXɝFLHQWDQGDSSURSULDWHFDOLEUH$VWKH
majority of the Board comprises Independent, Non-Executive Directors, their opinions and views carry
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5HIHUSDJHVWRIRUIXUWKHUGHWDLOVRQ'LUHFWRUVTXDOLȴFDWLRQVDQGH[SHULHQFH
(15) A.5.2 Two-Thirds of the Non-Executive Directors should be Independent

Seven (07) out of Nine (09) Non-Executive Directors of the Bank are Independent. Refer pages 182 to 185
for further details.


Reference
(16) A.5.3 Independence of Non-Executive Directors

The Seven (07) Non-Executive Independent Directors are free of any business or other relationship that
could materially interfere with or could reasonably be perceived to materially interfere with the exercise of
their unfettered and independent judgement.
(17) A.5.4 Non-Executive Director’s Declaration on Independence

Annual Declarations have been obtained from each Non-Executive Director as to their status of
Independence/Non-Independence for the year 2022.
(18) A.5.5 Annual Evaluation of Independence

The Board carried out the annual evaluation of independence of the Directors based on the submission of
their respective annual declarations.
(19) A.5.6 Alternate Directors

As per the Board-approved policy, the appointment of Alternate Directors to represent Directors at
meetings can be done where necessary, subject to regulatory requirements and approvals.
There were no alternate Directors appointed during the year 2022.
(20) A 5.7 Senior Independent Director (SID) - Appointment and Meetings

Since the Chairman of the Bank, Mr Harsha Amarasekera, is a Non-Independent Director, Mr Dilip de S
:LMH\HUDWQHKDVEHHQDSSRLQWHGDVWKH6Ζ'RIWKH%RDUGZLWKH΍HFWIURPWK0D\LQSODFHRIIRUPHU
SID, Mr Deshal de Mel who resigned from the Board on the same date in order to ensure the independent
element in decision making.
The SID held Two (02) meetings with the Non-Executive Directors and One (01) meeting with the Executive
Directors during the year 2022.
(21) A.5.8 7KH6,'LVDYDLODEOHIRURWKHU'LUHFWRUVIRUFRQ΋GHQWLDOGLVFXVVLRQVDQGUHSUHVHQWVDOOVKDUHKROGHUV

at meetings
(22) A.5.9 The Chairman held One (01) meeting with Non-Executive Directors, without Executive Directors
being present during the year 2022
(23) A.5.10 Recording of Directors’ Concerns in Board Minutes

When preparing minutes of the proceedings of a meeting, the concerns raised by each Director are clearly
UHFRUGHGWRJHWKHUZLWKWKHUHVSRQVHVRIWKHRWKHUVZKLFKDUHLPSRUWDQWIRUWKHȴQDOGHFLVLRQRIWKH%RDUG

GRI 2-10,17,18

Reference
(24) A.6 SUPPLY OF RELEVANT INFORMATION

The Board has access to comprehensive, quantitative and qualitative information needed to enable them to
H΍HFWLYHO\GLVFKDUJHWKHLUGXWLHV
(25) A.6.1 Directors are Provided with Timely Information and Properly Briefed on Issues Arising at Board
Meetings
The Management provides comprehensive information to Directors during the monthly Board meetings.
The Directors also have free and open access to management at all levels in order to obtain further
information or clarify any concerns they may have.
All Directors are adequately briefed on matters arising at Board meetings through comprehensive Board
Papers. Additionally, the relevant members of the Management team are on standby for further
FODULȴFDWLRQVDVPD\EHUHTXLUHGE\'LUHFWRUVRUZLOOPDNHSUHVHQWDWLRQVDW%RDUGPHHWLQJVZKHUH
necessary.
Any Director who was unable to attend a meeting is updated on proceedings prior to the next meeting through:
Ì formally documented minutes of meetings;
Ì a separate document on matters arising out of minutes highlighting the items which need to be
completed and need follow-up actions of the previous meetings (This is taken up immediately after
FRQȴUPDWLRQRIPLQXWHV
Ì archived minutes and Board papers accessible electronically at the convenience of the Directors.
(26) A.6.2 Board Papers and Agenda to be Circulated Seven Days Prior to Meetings
As described above, Board papers including the agenda are circulated generally seven days prior to the meeting.
Adequate provisions are in place for circulation of urgent papers and/or papers on highly sensitive matters with a
shorter notice and also for approval of matters by circulation, but such instances are the exception and not the
rule. Further, minutes of Board meetings are generally provided within the stipulated period.
(27) A.7 APPOINTMENTS TO THE BOARD

There is a formal and transparent procedure for the appointment of New directors to the Board through an
Established Board Nomination Committee (BNC).
(28) A.7.1 Board Nomination Committee

Duties and the membership of the Board Nomination Committee is given on pages 196 and 197 of the
Annual Report.
New Directors (both Executive and Non-Executive) are appointed by the Board on the recommendation of
the BNC. A Board-approved Policy on Selection, Nomination, Appointment and Election of Directors which is
in place to support this process.
(29) A.7.2 Annually Assessment of Board Composition

The Board, on the recommendation of the BNC, considers the requirement of additional skills, knowledge
and expertise to the Board as and when required. Further, the Board annually assesses its composition to
ascertain whether the combined knowledge and experience of the Board matches the strategic demands
facing the Bank.
(30) A.7.3 Disclosure of Information to Shareholders upon Appointment of New Directors

All new appointments to the Board are communicated to the shareholders via the Colombo Stock
([FKDQJHWRJHWKHUZLWKEULHIUHVXPHVRIVXFK'LUHFWRUV6XFKDQQRXQFHPHQWVVHWRXWWKHȴHOGVRIWKH
respective Director’s expertise, his/her directorships in other companies, the number of shares he/she
holds in the Bank, whether he/she is appointed as an Executive Director or a Non-Executive Director, and
whether as an Independent Director or as a Non-Independent Director.
Ì In 2022, the appointment of Mr Hiran Cabraal was announced to the public in line with the aforesaid
requirement.
Ì 7KHSURȴOHVRIWKHFXUUHQW'LUHFWRUVDUHJLYHQRQSDJHVWRLQWKH$QQXDO5HSRUW

GRI 2-18

Reference
(31) A.8 RE-ELECTION

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0HHWLQJDQGR΍HUWKHPVHOYHVIRUUHHOHFWLRQ6XFK'LUHFWRUVZKRUHWLUHDUHWKRVHZKRKDYHKHOGRɝFHIRU
the longest period since their last election/appointment. In accordance with this provision:
IROORZLQJ'LUHFWRUVZLOOUHWLUHDQGR΍HUWKHPVHOYHVIRUUHHOHFWLRQDWWKHWK$QQXDO*HQHUDO0HHWLQJ
Ì Mr Harsha Amarasekera Ì Mrs Keshini Jayawardena Ì Mr Vinod Hirdaramani
following Directors were re-elected at the 36th Annual General Meeting:
Ì Mr Rushanka Silva Ì Mr Dilip de S Wijeyeratne Ì Mr Vajira Kulatilaka
A brief resume of each Director standing for re-election is given on pages 182 to 185 in the Annual Report.
(32) A.8.1 1RQ([HFXWLYH'LUHFWRUVDUH$SSRLQWHGIRU6SHFL΋HG7HUPV6XEMHFWWR5H(OHFWLRQ

1RQ([HFXWLYH'LUHFWRUVDUHDSSRLQWHGWRWKH%RDUGIRUVSHFLȴFWHUPVVXEMHFWWRUHHOHFWLRQEDVHGRQWKH
regulatory requirements.
(33) A.8.2 Election of the Directors

All Directors including the Chairman stand for election by shareholders at the Annual General Meetings at
ȴUVWRSSRUWXQLW\DIWHUWKHLU$SSRLQWPHQWLQWHUPVRIArticle no. 93 of Articles of Association of the Bank.
Accordingly, Mr Hiran Cabraal who was appointed to the Board on 30th June 2022 to be elected at the 37th
Annual General Meeting by the Shareholders.
(34) A.8.3 Resignation of a Director

In the event that a Director wishes to resign from his/her position as a Director, he/she is expected to
provide a written communication to the Board, tendering his/her resignation along with reasons for such
resignation. Such requests would be duly tabled at the immediately succeeding Board Meeting.
0U'HVKDOGH0HOWHQGHUHGKLVUHVLJQDWLRQIURPWKH%RDUGZLWKH΍HFWIURPWK0D\SULRUWRWKH
conclusion of his appointed term.
A.9 APPRAISAL OF BOARD PERFORMANCE
(35) A.9.1 Annual Assessment of Board and Sub-Committee Performance

Each Director of the Board annually appraises the Board’s own performance to ensure that the Board is
GLVFKDUJLQJLWVUHVSRQVLELOLWLHVVDWLVIDFWRULO\7KLVSURFHVVUHTXLUHVHDFK'LUHFWRUWRȴOOD%RDUG3HUIRUPDQFH
Evaluation Form in line with the provisions of the relevant section of the Code. The responses are reviewed
by the Company Secretary who compiles a report which is submitted for discussion at a Board Meeting. The
same process is followed for all Board Sub-Committees.
(36) A.9.2 Annual Self-evaluation of Board and Sub-Committee Performance

The Board undertakes an annual self-evaluation of its own performance and the responses are retained by
the Company Secretary.
(37) A.9.3 Process to Review Directors’ Performance at the Time of Re-Election

A Self Review process to ascertain the extent of the contribution, participation and engagement of each
Director is conducted in parallel with the Board Performance Evaluation by the Directors.
(38) A.9.4 Disclosure of the Method of Appraisal of the Board and Board Sub-Committee Performance
As explained in A.9.1, A.9.2 and A.9.3 above.
(39) A.10 DISCLOSURE OF INFORMATION IN RESPECT OF DIRECTORS

Shareholders are kept advised of relevant details in respect of Directors, as and when required.

GRI 2-18,19,20

Reference
(40) A.10.1 Annual Report Discloses the Following Information Relating to Directors
3URȴOHVLQFOXGLQJQDPHTXDOLȴFDWLRQVH[SHUWLVH([HFXWLYH1RQ([HFXWLYHDQGΖQGHSHQGHQFH1RQ
Independence status, Membership of Directors in Board Sub-Committees, companies and other entities in
which each Director serve as a Board member and key appointments are given on pages 182 to 185.
Ì Related Party Transactions are given on pages 347 to 350.
Ì Directors’ Interests in Contracts are given in page 231.
Ì Director’s attendance at Board Meetings and Board Sub-Committee meetings are given on page 175.
(41) A.11 APPRAISAL OF MANAGING DIRECTOR (MD)

The Board annually assesses the performance of the MD.
(42) A.11.1 Set Reasonable Financial and Non-Financial Targets to be met by the MD
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during the year by the MD with reference to the short, medium and long-term objectives of the Bank.
(43) A.11.2 Evaluate Performance of the MD with Reference to Targets

The performance evaluation of the MD for 2021 was carried out by the Board Human Resources and
Remuneration Committee with reference to the targets and goals achieved by the Bank which were
reported to the Board. The Board expressed its satisfaction at the MD’s level of performance during 2021.
B DIRECTORS’ REMUNERATION
B.1 REMUNERATION PROCEDURE
(44) B.1.1 Appointment of a Remuneration Committee

The Board has established a Board Human Resources and Remuneration Committee (BHRRC) to develop
policies and recommend remuneration for the Directors, the MD and KMPs respectively for approval by the
Board.
Further information regarding the BHRRC is given in pages 194 and 195.
(45) B.1.2 & Composition and Chairman of Board Human Resources and Remuneration Committee
B.1.3
The composition of the BHRRC as at 31st December 2022 was in line with the regulatory as well as required
standards.
The composition of the BHRRC is given on pages 194 and 195 of this report.
(46) B.1.4 & Remuneration for Executive and Non-Executive Directors

B.1.5
Board approved Policies on "Directors’ Remuneration" and "Reward Management Policy for KMPs" are in
place to determine and govern the remuneration of Executive and Non-Executive Directors.
B.2 THE LEVEL AND MAKE UP OF REMUNERATION
(47) B.2.1 & Remuneration for Executive Directors should Attract, Retain and Motivate
B.2.2
Remuneration for Executive Directors is determined by the BHRRC and is designed to attract, retain and
motivate Executive Directors.
(48) B.2.3 Positioning Company Remuneration Levels Relative to Other Companies

The BHRRC reviews the Bank’s remuneration levels vis-à-vis industry standards and other corporate
benchmarks where necessary.
(49) B.2.4 Sensitivity of the Remuneration Committee to Remuneration and Employment Conditions
When considering employee incentives, the BHRRC is mindful of the comparative employment conditions
and considers the nature and extent of responsibilities, the work volume and the level of performance
against the pre-determined targets.

GRI 2-16,19

Reference
(50) B.2.5 Performance Related Elements of Remuneration for Executive Directors

Extremely challenging, but transparent performance related elements are part of the remuneration
applicable for Executive Directors. It has been designed in a manner enabling Executive Directors to align
their interest with that of the Bank and main stakeholders and to provide such Directors appropriate
incentives to perform at the highest level.
These performance related elements are approved by the Board considering the recommendations made
by the BHRRC.
(51) B.2.6 Share Option Schemes

No share option scheme was implemented or introduced during 2022.
(52) B.2.7 Designing Schemes of Performance Related Remuneration

Team based performance related remuneration has been in force in the Bank since 2016 and applies to all
employees. Under this scheme, no performance related remuneration is granted in the retrospect.
(53) B.2.8 & Early Termination of Directorship

B.2.9
No Contract for Services has been entered into by the Bank with its Non-Executive Directors. The term of a
Director (whether Executive or Non-Executive) would end under the circumstances described in the Board-
approved Procedure for Selection, Nomination, Appointment and Election of Directors.
No compensation is payable by the Bank to its Non-Executive Directors on “early termination” of term for any
reason whatsoever. This is supported by the Board-approved Directors’ Remuneration Policy which is in place.
The terms of employment of the Executive Directors who are employees of the Bank including the MD, are
governed by their respective Contracts of Employment.
(54) B.2.10 Levels of Remuneration for Non-Executive Directors

The Board as a whole determines the levels of remuneration for Non-Executive Directors taking into
account, the time, commitment and responsibilities associated with their role and with due consideration of
industry best practices. Remuneration for Non-Executive Directors does not include share option schemes.
B.3 DISCLOSURE OF REMUNERATION
(55) B.3.1 Disclosures on Board Human Resource and Remuneration Committee and Aggregate Remuneration
The composition of the BHRRC and its report is given on pages 194 and 195.
The aggregate remuneration paid to Executive and Non-Executive Directors during the year under review, is
given in Note 47.3.1 to the Financial Statements on page 347.
C RELATIONS WITH SHAREHOLDERS
(56) C.1 CONSTRUCTIVE USE OF THE ANNUAL GENERAL MEETING (AGM) AND CONDUCT OF GENERAL
MEETINGS
The Annual General Meeting is the main forum for interact between shareholders and the Board. The 36th
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video communications app.
(57) C.1.1 Notice of the AGM and the related papers

The Notice of the AGM and the other papers related thereto, are duly circulated to all shareholders, 15
working days prior to the AGM.
(58) C.1.2 Adoption of Separate Resolution and Count of all Proxy Votes Lodged
Separate resolutions are proposed and adopted on each substantial issue at the AGM.
All proxy votes lodged, together with the votes of shareholders who participated at the AGM are considered
for each resolution. Any votes withheld were not considered in determining the number of votes for and
against each resolution.

GRI 2-16

Reference
(59) C.1.3 To Ensure that all Valid Proxy Appointments Received for General Meetings are Properly Recorded
and Counted
The Bank duly maintains a register where the Proxies received are registered. The register is closed on the
SUR[\VXEPLVVLRQGHDGOLQHVSHFLȴHGLQWKH1RWLFHRI0HHWLQJ7KHQXPEHURIYRWHVUHFHLYHGIRUDQGDJDLQVW
each resolution is announced at the relevant General Meeting.
At the meeting, for adoption of each resolution, the Chairman, in addition to the details of the Proxies
registered, calls for a vote in line with the established practices followed by the announcement as to
whether the resolution is carried or not.
(60) C.1.4 Availability of mandatory Board Sub-Committee Chairpersons and Senior Independent Director at
the AGM
The Chairs’ of all mandatory Board Sub-Committees and the Senior Independent Director were available at
the 36th AGM to answer questions if so requested by the Chairman.
(61) C.1.5 Circulation of Summary of the Procedures governing voting at General Meeting along with the
Notice of General Meeting
The procedure of governing voting at the meeting is properly briefed to the shareholders along with the
Notice of meeting.
(62) C.1.5 Summary of Procedures Governing Voting at the AGM

A summary of the procedure governing voting at the AGM is provided in the Form of Proxy, which is
circulated to shareholders 15 working days prior to the AGM.
C.2 EFFECTIVE COMMUNICATION WITH SHAREHOLDERS
(63) C.2.1 Availability of a channel to Reach all Shareholders of the Company for Timely Dissemination of
Information
The Bank’s Annual Report, Interim Financial Statements and all other material information is made available
for download on the corporate website (www.sampath.lk). These are posted on the website as soon as
possible and practical upon releasing the same to the Colombo Stock Exchange.
All public disclosures (immediate or otherwise) promptly reach the shareholders through the Market
Announcements made by the Bank. The Bank is committed to provide fair and transparent disclosures with
emphasis on the integrity, accuracy, timeliness and relevance of the information provided.
In addition, the Board has appointed a Sub-Committee on Shareholder Relations to identify and address
VKDUHKROGHUVȇFRQFHUQV6DPSDWK%DQNLVWKHȴUVWOLVWHGHQWLW\LQ6UL/DQNDWRIRUPVXFKD&RPPLWWHH
Additionally, the AGM also serves as a platform for the Bank to engage with its shareholders. Sampath Bank
has a proud history of well attended AGMs where shareholders take an active role in exercising their rights
in all forms.
(64) C.2.2 & Policy and Methodology for Communication with Shareholders
C.2.3
A Board-approved Policy on Communication is in place, in which the provisions for communicating with
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The mechanism for implementing the said Policy is clearly stated under the “Policy Implementation
0HFKDQLVPȋZKLFKVSHOOVRXWWKHUHVSRQVLELOLWLHVRIGL΍HUHQWRɝFHUVFDWHJRULHVRIRɝFHUVZLWKUHJDUGWR
FRPPXQLFDWLRQZLWKGL΍HUHQWFDWHJRULHVRIVWDNHKROGHUV


Reference
(65) C.2.4 & Company Secretary as Contact Person in Relation to Shareholder Matters
C.2.6
6KDUHKROGHUVDUHGXO\QRWLȴHGWKDWDQ\FRPPXQLFDWLRQFRUUHVSRQGHQFHZLWKWKH%DQNVKRXOGEHWKURXJK
the Company Secretary. They may provide their comments and suggestions to the Directors or
Management through the Company Secretary. The contact information of the Company Secretary is
provided in the Annual Report.
Additionally, shareholders are at liberty even to communicate directly with any of the Board Members. They
may, at any time, direct questions, or request for publicly available information from the Directors or
management of the Bank.
(66) C.2.5 & Process to Make all Directors Aware of Major Issues and Concerns of Shareholders and Process of
C.2.7 Responding to Shareholder
The Company Secretary takes appropriate actions based on the concerns/requests received by the
shareholders.
(67) C.3 MAJOR AND MATERIAL TRANSACTIONS

Disclosures to shareholders in terms of the Companies Act and Regulations issued under the Securities and
Exchange Commission of Sri Lanka Act and Colombo Stock Exchange Regulations.
(68) C.3.1 & Disclosure of Major Transactions

C.3.2
The Bank’s Procedure on Related Party Transactions dictates mandatory public disclosure of any major
Related Party Transaction or a series of such transactions the Bank is about to engage in, of which the value
is greater than One Third of the assets of the Bank, requiring the approval of the shareholders by an
Ordinary Resolution thereto.
In terms of Section 185 of the Companies Act, any major transaction proposed to be entered into by the
Bank too requires approval of the shareholders by virtue of a special resolution, with due notice to the
public given through market announcements.
During the year under review, the Bank did not engage in or commit to any “Major Transaction” which
PDWHULDOO\D΍HFWHGWKH%DQNȇVQHWDVVHWEDVHZDUUDQWLQJQHLWKHUVXFKGLVFORVXUHQRUVXFKDSSURYDOE\WKH
shareholders.
D ACCOUNTABILITY AND AUDIT
(69) D.1 FINANCIAL AND BUSINESS REPORTING (THE ANNUAL REPORT)

7KH$QQXDO5HSRUWDLPVWRSUHVHQWDEDODQFHGDQGDQXQGHUVWDQGDEOHDVVHVVPHQWRIWKH%DQNȇVȴQDQFLDO
position, performance, business model, governance structure, risk management, internal controls as well as
the challenges, opportunities and future prospects.
The Bank’s position and prospects have been discussed in detail in the following sections of this Annual
Report.
Ì Chairman’s Message is given on pages 30 to 33.
Ì Managing Director’s Review is given on pages 34 to 41.
Ì Management Discussion and Analysis are given on pages 73 to 165.
(70) D.1.1 Board’s Responsibility in Financial Reporting

The Financial Statements prepared in accordance with the relevant accounting standards, laws and
UHJXODWLRQVSURYLGHWUXHDQGIDLUDVVHVVPHQWRIWKHȴQDQFLDOSRVLWLRQRIWKH%DQN7KHVH)LQDQFLDO
Statements are given on pages 244 to 409 in this Annual Report.


Reference
(71) D.1.2 Interim Reports, Price-Sensitive Public Reports, Regulatory Reports and Statutory Information
Requirements
Interim reports for each quarter are published within the timelines as stipulated by the relevant regulatory
authorities. The information included in the interim reports enable shareholders to gain an understanding
RIWKHVWDWHRID΍DLUVRIWKH%DQN
Reports required by the regulators including the Central Bank of Sri Lanka, the Department of Inland
5HYHQXHWKH5HJLVWUDURI&RPSDQLHVDQGWKH&RORPER6WRFN([FKDQJHDUHDOOȴOHGLQDWLPHO\PDQQHULQ
FRPSOLDQFHZLWKWKHUHOHYDQWVWDWXWRU\UHTXLUHPHQWV7KHVHUHSRUWVSURYLGHVXɝFLHQWLQIRUPDWLRQIRU
stakeholders to obtain a balanced assessment of the Banks operations.
(72) D.1.3 'HFODUDWLRQPDGHE\WKH0DQDJLQJ'LUHFWRUDQG&KLHI)LQDQFLDO2΍FHULQ0DLQWDLQLQJ$FFXUDWH

Financial Records in Compliance with the Appropriate Accounting Standards
7KH0DQDJLQJ'LUHFWRUȇVDQGWKH&KLHI)LQDQFLDO2ɝFHUȇV5HVSRQVLELOLW\6WDWHPHQWLVJLYHQRQSDJHVDQG
236 of this Annual Report.
(73) D.1.4 'HFODUDWLRQLQ$QQXDO5HSRUWRIWKH%RDUGRI'LUHFWRUVRQWKH$ΊDLUVRIWKH&RPSDQ\

7KH$QQXDO5HSRUWRIWKH%RDUGRI'LUHFWRUVRQWKH$΍DLUVRIWKH&RPSDQ\RQSDJHVWRFRQWDLQV
the declarations as required by the Code.
(74) D.1.5 Responsibilities of the Board for the Preparation and Presentation of Financial Statements and
Statement by the Auditors about their Reporting Responsibilities
The Statement of Directors’ Responsibility for Financial Reporting and Report of the Auditors which includes
a statement about their reporting responsibilities are provided on pages 237 to 238 and 239 to 242
respectively.
(75) D.1.6 Inclusion of a Management Discussion and Analysis

7KH0DQDJHPHQW'LVFXVVLRQDQG$QDO\VLVFRQWDLQHGLQSDJHVWRFRYHUVWKHLQIRUPDWLRQVSHFLȴHGLQ
the Code which include the following:
Ì Business Model
Ì Industry Structure and Developments
Ì Opportunities and Threats
Ì Risk Management
Ì Internal Control Systems and their Adequacy
Ì Governance
Ì Stakeholder Relationships
Ì Social and Environmental Protection Activities Carried out by the Bank
Ì Financial Performance
Ì Investment in Physical and Intellectual Capital
Ì Material Developments in Human Resources, Industrial Relations and Prospects for the Future
(76) D.1.7 Notify Shareholders in case Net Assets of the Bank Fall Below 50%
This situation did not arise during the year under review. However, in the event the need arises, the Bank
ZRXOGKDYHGXO\QRWLȴHGWKHVKDUHKROGHUVLQOLQHZLWKDSSOLFDEOHODZV

GRI 2-14,15

Reference
(77) D.1.8 Related Party Transactions

A Board-approved and formally documented process is in place for identifying and dealing with Related
Party Transactions. A mechanism is also in place to prevent the Bank from granting favourable treatment to
Related Parties.
)XUWKHUWRSUHYHQWDQ\FRQȵLFWRILQWHUHVWLQWKLVUHJDUGD%RDUGDSSURYHG3ROLF\RQ0DQDJLQJ&RQȵLFWVRI
ΖQWHUHVWLVDOVRLQSODFH$QH΍HFWLYHDQGFRPSUHKHQVLYHΖQWHUQDO&RQWUROIUDPHZRUNIRULGHQWLI\LQJ
recording and disclosing Related Party Transactions is also in place.
In addition, a procedure has been issued explaining the methodology to be followed in granting
accommodation to Directors or to close relations of Directors, or to concerns in which Directors may have
substantial interest to avoid any favourable treatment.
Directors and KMPs are required to submit declarations disclosing their transactions with the Bank and the
Group as and when required.
$OO5HODWHG3DUW\7UDQVDFWLRQVDVGHȴQHGE\WKH6UL/DQND$FFRXQWLQJ6WDQGDUGV/.$6 5HODWHG3DUW\
Transactions) are disclosed in Note 47 to the Financial Statements on pages 347 to 350.
D.2 RISK MANAGEMENT AND INTERNAL CONTROL
(78) D.2.1 Board’s Responsibility to Monitor the Company’s Risk Management and Internal Control System
The Board’s responsibility for and oversight of Risk Management is explained in Risk Management Report in
Risk and Governance Section and the Directors’ statement on Internal Control Over Financial Reporting on
pages 204 to 217 and 232 to 233 respectively.
(79) D.2.2 &RQ΋UPDWLRQE\WKH'LUHFWRUVRQ&DUU\LQJRXWD5REXVW$VVHVVPHQWRIWKH3ULQFLSOH5LVNVIDFHGE\

the Bank
The Risk Management Report and the Directors’ statement on Internal Control Over Financial Reporting on
pages 204 to 217 and 232 to 233 respectively, provide all relevant information in this regard.
(80) D.2.3 Need for an Internal Audit Function

The Bank has established an Internal Audit function headed by the Chief Internal Auditor who operates
independently and reports directly to the Board Audit Committee. The Board Audit Committee as the main
oversight body in charge of the Internal Audit function, regularly reviews the work of the Internal Audit team.
(81) D.2.4 5HYLHZRIWKH3URFHVVDQG(ΊHFWLYHQHVVRI5LVN0DQDJHPHQWDQG,QWHUQDO&RQWUROE\WKH$XGLW

Committee
The Board is responsible for formulating and implementing appropriate and adequate Internal Control
Systems. The Board Audit Committee is responsible to the Board for ensuring that the system of Internal
&RQWUROVDUHVXɝFLHQWDQGH΍HFWLYH$6HSDUDWH%RDUG5LVN&RPPLWWHHLVLQSODFHWRPRQLWRUWKHRYHUDOOULVN
SURȴOHRIWKH%DQN
(82) D.2.5 The Statement of Internal Control

Directors’ Statement on Internal Control over the Financial Reporting is given on pages 232 and 233.
D.3, BOARD AUDIT COMMITTEE
(83) D.3.1, D.3.2 Since 1997, the Bank has established the Board Audit Committee in keeping with practices of good
& D.3.3 governance. The principal responsibilities of the Board Audit Committee include oversight over
Financial Reporting, Internal Controls and monitoring Auditor Independence. The duties of the
%RDUG$XGLW&RPPLWWHHLQFOXGHSURYLGLQJDVVXUDQFHVWRWKH%RDUGRQWKHH΍FDF\RIWKH%DQNVȆ
΋QDQFLDOSURFHVVHVDQGLQWHJULW\RIWKH΋QDQFLDOUHSRUWVDVZHOODVIRUPRQLWRULQJWKHSHUIRUPDQFH
objectivity and independence of the External Auditors and reviewing the work of the Internal Audit
function.
The Board Audit Committee Report is given on pages 190 to 193 in the Annual Report.

GRI 2-15,23

Reference
(84) D.4 RELATED PARTY TRANSACTIONS REVIEW COMMITTEE

The Board has Established the Board Related Party Transactions Review Committee in Compliance with the
Listing Rules issued by the Colombo Stock Exchange.
(85) D.4.1 ,GHQWL΋FDWLRQRI5HODWHG3DUWLHVDQG5HODWHG3DUW\7UDQVDFWLRQV

7KH%DQNLGHQWLȴHVȊ5HODWHG3DUWLHVȋDQGȊ5HODWHG3DUW\7UDQVDFWLRQVȋDVGHȴQHGE\/.$6DQGDVSHUWKH
Banking Act Direction No. 11 of 2007 issued by CBSL.
(86) D.4.2 & Composition and the Terms of Reference of the Board Related Party Transactions Review
D.4.3 Committee (BRPTRC)
The BRPTRC Report which is given on pages 201 and 202 in this Annual Report provides the required
information.
D.5 CODE OF BUSINESS CONDUCT AND ETHICS
(87) D.5.1 &RGHRI%XVLQHVV&RQGXFWDQG(WKLFVIRU'LUHFWRUVDQG6WDΊ

The Code of Conduct and Governance Requirements for Directors, the Code of Conduct for Key
Management Personnel and the Code of Conduct for other employees are all in place to ensure compliance
with the provisions of the Code of Conduct and Ethics. These guidelines are reviewed periodically and
updated in keeping with the latest developments.
In addition, the Policy on Anti Bribery Corruption and the Policy on Accepting and Presenting of Gifts and
Favours is in place to ensure the Bank’s commitment towards anti-corruption practices.
(88) D.5.2 (QVXUHWKDW0DWHULDODQG3ULFH6HQVLWLYH,QIRUPDWLRQDUH3URPSWO\,GHQWL΋HGDQG5HSRUWHG

A process is in place to ensure prompt disclosure of price sensitive and material information to the public.
As per the Board-approved Policy on Communication, the responsibility of making market announcements
of price sensitive information lies with the Company Secretary.
(89) D.5.3 Policy and Process for Monitoring and Disclosure of Share Purchase
A process is in place to monitor the share transactions of the Directors and KMPs on a timely manner.
(90) D.5.4 &KDLUPDQȆV$΍UPDWLRQ

7KH&KDLUPDQȇVDɝUPDWLRQZLWKUHJDUGWRLQWURGXFWLRQRID%DQNZLGH&RGHRI&RQGXFWDQG(WKLFVWKH
Status of Compliance with same and his awareness of any violations thereof is given on pages 168 and 169
of this Annual Report.
D.6 CORPORATE GOVERNANCE DISCLOSURES
(91) D.6.1 The Corporate Governance Report given on pages 168 to 181 and 432 to 466 provides information
regarding Corporate Governance practices in the Bank which are in compliance with the:
Ì Code of Best Practice on Corporate Governance 2017 issued by the Institute of Chartered Accountants
of Sri Lanka;
Ì Banking Act Direction No. 11 of 2007 on Corporate Governance for Licensed Commercial Banks issued
by the CBSL;
Ì requirements of Section 7.6 of the Listing rules of the Colombo Stock Exchange.


Reference
SECTION 2 – SHAREHOLDERS
E INSTITUTIONAL INVESTORS
(92) E.1 SHAREHOLDER VOTING - BANK’S RESPONSIBILITY TO ENCOURAGE THE INSTITUTIONAL INVESTORS
TO USE THEIR VOTE
The Bank’s Institutional Investors as well as other Investors have throughout exercised their votes
enthusiastically, expressing candid preferences and are encouraged to express their views freely. The Bank
has a history of active shareholder involvement and participation at general meetings.
(93) E.1.1 Regular and Structured Dialogue with Shareholders

7KH%DQNSULGHVLWVHOIRQEHLQJWKHȴUVWOLVWHGFRPSDQ\ZKLFKKDVWDNHQWKHLQLWLDWLYHWRIRUPD%RDUG
Sub-Committee on Shareholder Relations, with the objective of maintaining a solid and fruitful dialogue with
shareholders and to ensure the views of shareholders are communicated to the Board, where necessary.
(94) E.2 EVALUATION OF GOVERNANCE DISCLOSURES

Institutional investors are kept apprised of the Bank’s governance practices through the Annual Report and
any new initiatives are highlighted at general meetings to ensure that due weightage is given to good
corporate governance.
F OTHER INVESTORS
(95) F.1 INVESTING/DIVESTING DECISION

7KH$QQXDO5HSRUWFRQWDLQVVXɝFLHQWLQIRUPDWLRQIRULQGLYLGXDOVKDUHKROGHUVDVZHOODVDOOSRWHQWLDO
LQYHVWRUVWRFDUU\RXWWKHLURZQDQDO\VLV7KLVWRJHWKHUZLWKWKHLQWHULPȴQDQFLDOVWDWHPHQWVSXEOLVKHGHDFK
TXDUWHUSURYLGHVXɝFLHQWLQIRUPDWLRQWRHQDEOHLQGLYLGXDOVKDUHKROGHUVWRPDNHLQIRUPHGMXGJHPHQWV
regarding the Bank’s performance and future prospects.
Additionally, a separate part of the Bank’s website is dedicated to Investor Relations which provides relevant
information online to all investors.
Shareholders can contact the Company Secretary for further information if required. Meanwhile, Circulars
issued to Shareholders from time to time emphasise the importance of seeking independent advice prior to
making any particular investment.
(96) F.2 SHAREHOLDER VOTING

It is a tradition at the Bank to encourage individual shareholders to participate and vote at any General
0HHWLQJ$GGLWLRQDOO\WKH\DUHHQFRXUDJHGWRSDUWLFLSDWHLQWKH%DQNȇVD΍DLUVE\VXEPLWWLQJSURSRVDOV
through the Stakeholder Feedback Forms included along with the Annual Report.
7KHWK$*0ZDVOLYHVWUHDPHGIURPWKH%DQNȇV+HDG2ɝFHWRVKDUHKROGHUVZLWKRXWDQ\GLVUXSWLRQV
enabling shareholders to interact with the proceedings of the meeting and vote on resolutions on each
agenda item remotely via “eBallot”, a leading global online voting platform.


Reference
G INTERNET OF THINGS AND CYBER SECURITY
(97) G.1 PROCESS TO IDENTIFY HOW THE EXTERNAL IT DEVICES COULD CONNECT TO THE ORGANISATION’S
NETWORK
$XWKRULVHG2ɝFHUVSHUIRUPULVNDVVHVVPHQWVWRGHWHUPLQHZKHWKHULQIRUPDWLRQSURFHVVLQJV\VWHPV
UHTXLUHHTXLSPHQWLGHQWLȴFDWLRQ HJDWWDFKLQJLGHQWLȴHUVWKDWLQGLFDWHZKLFKQHWZRUNVWKHGHYLFHLV
allowed to access). Additional physical access controls are also implemented to maintain the security of the
LGHQWLȴHU
The use of non-authorised modems or any other remote access solutions are strictly prohibited unless
written approval has been obtained. All devices connected/attached to the Bank’s infrastructure are
authorised by Network Access Controller (NAC). Any device which is not authorised by NAC will not be able
to access the network. Only legitimate devices are authorised by network administrators.
5HPRWHDFFHVVLVJUDQWHGWRXVHUVZLWKDMXVWLȴDEOHEXVLQHVVUHTXLUHPHQWZKLOHDFFHVVSRLQWVLQWRWKH
Bank’s ecosystem are regularly assessed with any changes formally approved. In addition, the Bank has
DSSRLQWHGD'DWD3URWHFWLRQ2ɝFHU '32 WRFRPSO\ZLWK'DWD3URWHFWLRQ$FW '3$ 1RRIDQG
SURWHFWFRQȴGHQWLDOLW\DQGSULYDF\ZLWKUHJDUGVWRWKH3HUVRQDOO\ΖGHQWLȴDEOHΖQIRUPDWLRQ 3ΖΖ
$FURVVIXQFWLRQDOPDQDJHPHQWFRPPLWWHH 'DWD'LVVHPLQDWLRQ&RPPLWWHHȂ''& ZDVIRUPHGWRPDQDJH

and evaluate information shared by the Bank internally and externally.
(98) G.2 APPOINTMENT OF A CHIEF INFORMATION SECURITY OFFICER (CISO)

7KH%DQNKDVDSSRLQWHGD&KLHIΖQIRUPDWLRQ6HFXULW\2ɝFHU &Ζ62 ZKRUHSRUWVGLUHFWO\WRWKH0DQDJLQJ
Director. The CISO is tasked with determining the Bank’s sensitivity and risk appetite towards information
security threats at any given time.
(99) G.3 ALLOCATION OF ADEQUATE TIME ON THE BOARD MEETING AGENDA FOR DISCUSSION ON CYBER
RISK MANAGEMENT
The Board IT Committee has been established to provide oversight for all IT related matters, including to
review and recommend the IT strategic plan, policies, expenditure and budgets and IT security
requirements of the Bank.
Based on the requirement, adequate time is allocated during the Board Meetings to discuss “Cyber Risk” in
detail. During the year under review, the Board participated in Cyber Security Awareness sessions as given
on page 178.
The Information Security Committee (ISC), is a cross functional, management level committee that has been
formed to oversee both strategic and operational aspects of Information Security and report on such
matters to the Board Integrated Risk Management Committee (BIRMC) on a quarterly basis.
(100) G.4 INDEPENDENT PERIODIC REVIEW ON THE EFFECTIVENESS OF THE CYBER SECURITY RISK
MANAGEMENT AND THE SCOPE AND FREQUENCY OF THE REVIEW
7KH%DQNKDVREWDLQHGWKHUHFHUWLȴFDWLRQRIΖ62IRUWKHSHULRGIURP7KHDQQXDO
internal audit and a surveillance audit which are mandatory requirements to continue with the ISO 27001
&HUWLȴFDWLRQZHUHFDUULHGRXWGXULQJWKHFRXUVHRIΖQDGGLWLRQWKH%DQNFRQGXFWVSHULRGLF&\EHU
6HFXULW\'ULOOVWREXLOGΖQIRUPDWLRQ6HFXULW\$ZDUHQHVVDPRQJWKHVWD΍PHPEHUV
A Bank wide Information Security Risk Assessment Review was conducted in 2022 with the support of an
independent third-party.
(101) G.5 DISCLOSURE OF THE PROCESS TO IDENTIFY AND MANAGE CYBER SECURITY RISKS
The required disclosure is made on pages 204 to 217 in this Annual Report.

GRI 2-12,14,17,18

Reference
H ENVIRONMENT, SOCIETY AND GOVERNANCE (ESG)
H.1 ESG REPORTING
(102) H.1.1 3URYLVLRQRI,QIRUPDWLRQLQ5HODWLRQWR(6*)DFWRUV(ΊHFWVRI(6*,VVXHVWRWKH%XVLQHVVDQG+RZ

Risks and Opportunities Pertaining to ESG are Recognised, Managed, Measured and Reported
Underpinned by its Strategic Sustainability Framework (pages 48 to 55), Sampath Bank has implemented an
Environmental and Social Risk Management System (ESMS) with the aim of managing the environmental
risks associated with the Bank’s business and thereby reducing the Bank’s environmental footprint.
The Corporate Sustainability Department is tasked with conducting environmental impact assessments to
complement the ESMS. In addition, all employees are encouraged to adopt the Environmental Pledge, while
UHJXODUWUDLQLQJDQGDZDUHQHVVEXLOGLQJLQLWLDWLYHVWRHQVXUHVWD΍KDYHDGHTXDWHNQRZOHGJHWRXQGHUVWDQG
WKHSXUSRVHDSSOLFDWLRQDQGLQWHQGHGREMHFWLYHVRIWKH(606ΖQWKLVUHJDUGVWD΍FDSDFLW\EXLOGLQJRQ
environmental social due diligence is conducted by the Sampath Learning Academy on periodic basis in
collaboration with Corporate Sustainability Department.
The ESMS Implementation Committee was formed to further strengthen the ESMS by implementing a
suitable Environmental and Social Risk Management Framework to identify and measure environmental and
social risks at all levels of operation across the Bank.
The members of the Board, and Board Sub-Committees, with a view to identifying and managing the social,
economic, environmental topics and their impacts, may from time to time call for comprehensive analysis
reports from both external and internal resource personnel to be in line with the adequate due diligence.
(103) H.1.2 Environment Factors

Natural Capital report is given on pages 132 to 147.
(104) H.1.3 Social Factors

Social and Relationship Capital report is given on pages 114 to 131.
(105) H.1.4 Governance

Corporate Governance Report is given on pages 168 to 181 and 432 to 466.
(106) H.1.5 Board’s Role on ESG Factors

The Board reviews the ESG factors where necessary to enhance the ESG related areas.
HARSHA AMARASEKERA NANDA FERNANDO LASANTHA SENARATNE

Chairman Managing Director Company Secretary
17th February 2023

Colombo, Sri Lanka

GRI 2-16
Section 7.6 of the Listing Rules of the Colombo Stock Exchange
Listing Rule Disclosure Requirement Section/Reference Page Reference

Reference
7.6 (i) 1DPHVRISHUVRQVZKRGXULQJWKHȴQDQFLDO\HDUZHUH'LUHFWRUVRIWKH Corporate Governance Report 170 - 178

Entity. Board of Directors 182 - 185
7.6 (ii) Principal activities of the Entity and its Subsidiaries during the year and any Annual Report of the Board of 221 - 231
changes therein. 'LUHFWRUVRQWKH$΍DLUVRIWKH
Company
7.6 (iii) The names and the number of shares held by the 20 largest holders of Investor Information 419 - 429
voting shares and the percentage of such shares held.
7.6 (iv) 7KHȵRDWDGMXVWHGPDUNHWFDSLWDOLVDWLRQSXEOLFKROGLQJSHUFHQWDJH Investor Information 419 - 429
number of public shareholders and under which option the Listed Entity
complies with the Minimum Public Holding requirement.
7.6 (v) A statement of each Director’s holding in each class of shares of the Bank. Annual Report of the Board of 221 - 231
'LUHFWRUVRQWKH$΍DLUVRIWKH
Company
7.6 (vi) Information pertaining to material foreseeable risk factors of the Entity. Risk Management Report 204 - 217
7.6 (vii) Details of material issues pertaining to employees and industrial relations During the year under review,
of the Entity. there were no material issues
relating to employees and
industrial relations pertaining to
the Bank
7.6 (viii) Extents, locations, valuations and the number of buildings of the Entity’s Note 29 to the Financial 310 - 318
land holdings and investment properties. Statements
7.6 (ix) Number of shares representing the Entity's Stated Capital. Note 41 to the Financial 339
Statements
7.6 (x) A distribution schedule of the number of holders in each class of equity Investor Information 419 - 429
securities, and the percentage of their total holdings.
7.6 (xi) Ratios and market price information: Investor Information 419 - 429
Equity: Dividend per share, Dividend payout, Net asset value per share,
Market value per share (highest and lowest values recorded during the
ȴQDQFLDO\HDUDQGYDOXHDVDWWKHHQGRIȴQDQFLDO\HDU
Debt: Interest rate of comparable government security, Debt/equity ratio, Investor Information 419 - 429
Interest cover, Quick asset ratio, Market prices and yield during the year
(highest price, lowest price, last traded price), any changes in credit rating Annual Report of the Board of 221 - 231
(for the Entity or any other instrument issued by the Entity), if applicable. 'LUHFWRUVRQWKH$΍DLUVRIWKH
Company
7.6 (xii) 6LJQLȴFDQWFKDQJHVLQWKH%DQNȇVRULWV6XEVLGLDULHVȇȴ[HGDVVHWVDQGWKH Note 29 to the Financial 310 - 318
PDUNHWYDOXHRIODQGLIWKHYDOXHGL΍HUVVXEVWDQWLDOO\IURPWKHERRNYDOXH Statements
7.6 (xiii) ΖIGXULQJWKHȴQDQFLDO\HDUWKH(QWLW\KDVUDLVHGIXQGVWKURXJKDQΖQLWLDO There were no public issues
3XEOLF2΍HULQJDQGRUDIXUWKHULVVXHRI6HFXULWLHV during the year 2022
7.6 (xiv) (a) Information in respect of Employee Share Option Schemes (ESOS). Not applicable as the Bank does
not have Employee Share
Option Schemes at present.
Further details disclosed in
Investor Information on pages
419 to 429 contains the details
of the previous Employee Share
Option Schemes of the Bank

Listing Rule Disclosure Requirement Section/Reference Page Reference

Reference
(b) Information in respect of Employee Share Purchase Schemes (ESPS). Not applicable as the Bank does
not have Employee Share
Purchase Schemes
7.6 (xv) Disclosures pertaining to Corporate Governance practices in terms of Rules 7.10.3, 7.10.5.c and 7.10.6.c of
Section 7 of the Rules.
7.10.3 Disclosures Relating to Directors

a. The Annual determination as to the independence or non- Annual Report of the Board of 221 - 231
independence of each Non-Executive Director based on such 'LUHFWRUVRQWKH$΍DLUVRIWKH
declaration and other information available to the Board and Company
Disclosure in the annual report of the names of Directors
determined to be ‘Independent’.
b. The basis for determining Non-Independent Directors as

Independent Directors by the Board if applicable.
c. A brief resume of each Director of the Board including information Board of Directors 182 - 185
on the nature of their expertise in relevant functional areas.
d. Provision of public disclosure to the exchange on the brief resume A market Disclosure was made
of new directors upon appointment of such directors. to the Colombo Stock Exchange
upon the appointment of
Mr Hiran Cabraal as an
Independent Non-Executive
Director, during the year
7.10.5 Remuneration Committee

7.10.5.c Disclosure in the Annual Report
The names of Directors (or persons in the Parent Company’s Board Human Resources and 194 - 195
committee in the case of a group company) comprising the Remuneration Committee
Remuneration Committee, contain a statement of the Report
remuneration policy and set out the aggregate remuneration
paid to Executive and Non-Executive Directors. Note 47.3.1 to the Financial 347
Statements
7.10.6 Audit Committee

7.10.6.c Disclosure in the Annual Report
Ì The names of the Directors (or persons in the Parent Board Audit Committee Report 190 - 193
Company’s committee in the case of a group company)
comprising the Audit Committee. The determination of the The Committee through their
independence of the auditors and the basis for such annual evaluation assessed the
determination. level of independence of the
External Auditors
Ì A report by the Audit Committee, setting out the manner of
compliance by the Bank in relation to the above, during the
ensuring year.
7.6 (xvi) 5HODWHG3DUW\7UDQVDFWLRQVH[FHHGLQJRIWKH(TXLW\RURIWKH7RWDO None of the transactions carried
Assets of the Entity as per Audited Financial Statements, whichever is lower. out by the Bank with Related
parties have exceeded the
Details of investments in a Related Party and/or amounts due from a
aggregate monetary value of
Related Party to be set out separately.
RIWKH6KDUHKROGHUVȇ(TXLW\
RIWKH%DQNRURIWKH7RWDO
The details shall include, as a minimum: the date of the transaction, the Assets of the Bank as at 31st
name of the Related Party, the relationship between the Entity and the December 2022
Related Party, the amount of the transaction and terms of the transaction,
the rationale for entering into the transaction.
Investor Information 419 - 429

BASEL III DISCLOSURE REQUIREMENTS
TABLE - 1: KEY REGULATORY RATIOS - CAPITAL AND LIQUIDITY
Bank Group
As at 31st December 2022 2021 2022 2021
Regulatory Capital (Rs 000)

Common Equity Tier I Capital 95,533,144 104,104,589 102,822,613 111,221,788
Total Capital 114,351,589 126,986,732 122,096,525 134,586,456
Regulatory Capital Ratios (%)
&RPPRQ(TXLW\7LHUΖ&DSLWDO5DWLR PLQLPXPUHTXLUHPHQW 11.92 13.95 12.18 14.05
7RWDO7LHUΖ&DSLWDO5DWLR PLQLPXPUHTXLUHPHQW 11.92 13.95 12.18 14.05
7RWDO&DSLWDO5DWLR PLQLPXPUHTXLUHPHQW 14.27 17.02 14.46 17.00
/HYHUDJH5DWLR PLQLPXPUHTXLUHPHQW 7.00 7.80 7.29 8.08
Regulatory Liquidity
Statutory Liquid Assets (Rs 000) - Bank 326,607,580 347,721,178 n/a n/a
6WDWXWRU\/LTXLG$VVHWV5DWLR%DQN PLQLPXPUHTXLUHPHQW 27.85 32.62 n/a n/a
Total Stock of High-Quality Liquid Assets (Rs 000) 226,064,957 271,499,215 n/a n/a
/LTXLGLW\&RYHUDJH5DWLR Ȃ5XSHH
PLQLPXPUHTXLUHPHQW 200.78 254.89 n/a n/a
/LTXLGLW\&RYHUDJH5DWLR Ȃ$OOFXUUHQF\
1HW6WDEOH)XQGLQJ5DWLR

TABLE - 2: CAPITAL RATIOS
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Common Equity Tier I (CET I) Capital after adjustments 95,533,144 104,104,589 102,822,613 111,221,788
Common Equity Tier I (CET I) Capital 120,079,176 112,506,327 125,752,360 118,202,030
Stated capital 47,622,493 47,622,493 47,622,493 47,622,493
Statutory reserve fund 5,755,000 5,075,000 6,033,000 5,315,000
Published retained earnings/(Accumulated retained losses) 8,169,471 8,491,142 13,564,655 13,946,845
Published accumulated other comprehensive income (OCI) (457,135) (1,151,213) (457,135) (1,151,213)
General and other disclosed reserves 58,989,347 52,468,905 58,989,347 52,468,905
8QSXEOLVKHGFXUUHQW\HDU VSURȴWORVVDQGJDLQVUHȵHFWHGLQ2&Ζ - - - -
2UGLQDU\VKDUHVLVVXHGE\FRQVROLGDWHGEDQNLQJDQGȴQDQFLDOVXEVLGLDULHV
of the Bank and held by third parties - - - -
Total adjustments to CET I Capital 24,546,032 8,401,738 22,929,747 6,980,242
Goodwill (net) - - - -
Intangible assets (net) 578,031 544,916 600,341 567,681
Deferred tax assets (net) 21,734,244 6,157,958 21,992,147 6,242,982
'HȴQHGEHQHȴWSHQVLRQIXQGDVVHWV 337,259 - 337,259 -
2WKHUV ΖQYHVWPHQWVLQWKHFDSLWDORIEDQNLQJ ȴQDQFLDOLQVWLWXWLRQV 1,896,498 1,698,864 - 169,579
Additional Tier I (AT I) Capital after adjustments - - - -
Additional Tier I (AT I) Capital - - - -
Tier II Capital after adjustments 18,818,445 22,882,143 19,273,912 23,364,668
Tier II Capital 18,818,445 22,882,143 19,273,912 23,364,668
Qualifying Tier II capital instruments 8,617,903 13,278,665 8,617,903 13,278,665
Revaluation gains 901,539 978,813 901,539 978,813
6WDJH RIVWDJHLPSDLUPHQWSURYLVLRQ 9,299,003 8,624,665 9,754,470 9,107,190
ΖQVWUXPHQWVLVVXHGE\FRQVROLGDWHGEDQNLQJDQGȴQDQFLDOVXEVLGLDULHVRI
the Bank and held by third parties - - - -
Total adjustments to Tier II - - - -
CET I Capital 95,533,144 104,104,589 102,822,613 111,221,788
Total Capital 114,351,589 126,986,732 122,096,525 134,586,456
Total Risk Weighted Assets (RWA) 801,373,367 746,321,439 844,381,387 791,790,267

RWAs for Credit Risk (refer table No. 3) 743,920,231 689,973,167 780,357,635 728,575,228
RWAs for Operational Risk (refer table No. 5) 55,711,400 47,382,447 61,977,640 54,249,214
RWAs for Market Risk (refer table No. 6) 1,741,736 8,965,825 2,046,112 8,965,825
&(7,&DSLWDO5DWLR LQFOXGLQJ&DSLWDO&RQVHUYDWLRQ%XΊHU
&RXQWHUF\FOLFDO&DSLWDO%XΊHU +/$UHTXLUHPHQWRQ'6,%V 11.92 13.95 12.18 14.05
RIZKLFK&DSLWDO&RQVHUYDWLRQ%X΍HU 2.50 2.50 2.50 2.50
RIZKLFK&RXQWHUF\FOLFDO%X΍HU - - - -
RIZKLFK+/$UHTXLUHPHQWRQ'6Ζ%V - - - -
Total Tier I Capital Ratio (%) 11.92 13.95 12.18 14.05
7RWDO&DSLWDO5DWLR LQFOXGLQJ&DSLWDO&RQVHUYDWLRQ%XΊHU
&RXQWHUF\FOLFDO&DSLWDO%XΊHU +/$UHTXLUHPHQWRQ'6,%V 14.27 17.02 14.46 17.00
RIZKLFK&DSLWDO&RQVHUYDWLRQ%X΍HU 2.50 2.50 2.50 2.50
RIZKLFK&RXQWHUF\FOLFDO%X΍HU - - - -
RIZKLFK+/$UHTXLUHPHQWRQ'6Ζ%V - - - -

TABLE - 3 (A) BANK: CREDIT RISK AS AT 31ST DECEMBER 2022 UNDER STANDARDISED APPROACH – CREDIT RISK EXPOSURES AND
CREDIT RISK MITIGATION (CRM) EFFECTS
Exposures before Credit Exposures post CCF and RWA and RWA density
Conversion Factor (CCF) and CRM
CRM
Asset Class On-balance 2ΊEDODQFH On-balance 2ΊEDODQFH RWA RWA density
sheet amount sheet amount sheet amount sheet amount
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 %
Claims on central government and CBSL 353,835,062 - 353,835,062 - 12,267,688 3

Claims on public sector entities 15,060,931 3,460 1,400,791 1,730 1,933,423 138
Claims on banks exposures 78,218,066 9,494 78,218,066 9,494 20,485,521 26
&ODLPVRQȴQDQFLDOLQVWLWXWLRQV 47,638,602 173,350 47,638,602 170,387 27,468,476 57
Claims on corporates 432,244,616 303,249,599 405,746,565 36,079,530 417,456,743 94
Retail claims 281,238,182 11,765,711 264,490,224 9,326,030 164,660,010 60
Claims secured by residential property 50,079,498 - 50,079,498 - 24,574,298 49
Non-performing assets 46,552,073 - 46,552,073 - 49,890,928 107
Higher-risk categories 974,296 - 974,296 - 2,435,740 250
Cash items and other assets 44,611,598 - 44,611,598 - 22,747,404 51
1,350,452,924 315,201,614 1,293,546,775 45,587,171 743,920,231 56
TABLE - 3 (B) GROUP: CREDIT RISK AS AT 31ST DECEMBER 2022 UNDER STANDARDISED APPROACH – CREDIT RISK EXPOSURES AND
CREDIT RISK MITIGATION (CRM) EFFECTS
Exposures before Credit Exposures post CCF and RWA and RWA density
Conversion Factor (CCF) and CRM
CRM
Asset Class On-balance 2ΊEDODQFH On-balance 2ΊEDODQFH RWA RWA density
sheet amount sheet amount sheet amount sheet amount
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 %
Claims on central government and CBSL 359,523,929 - 359,523,929 - 12,267,688 3

Claims on public sector entities 15,060,931 3,460 1,400,791 1,730 1,933,423 138
Claims on banks exposures 78,248,733 9,494 78,248,733 9,494 20,491,655 26
&ODLPVRQȴQDQFLDOLQVWLWXWLRQV 42,462,505 173,350 42,462,505 170,387 24,880,427 58
Claims on corporates 430,561,883 302,372,477 403,468,999 36,085,230 415,184,877 94
Retail claims 309,857,081 11,765,711 293,276,639 9,326,030 185,655,333 61
Claims secured by residential property 50,079,498 - 50,079,498 - 24,574,298 49
Non-performing assets 54,091,126 - 54,091,126 - 61,001,117 113
Higher-risk categories - - - - - -
Cash items and other assets 56,384,426 - 56,384,426 - 34,368,817 61
1,396,270,112 314,324,492 1,338,936,646 45,592,871 780,357,635 56

TABLE - 4 (A) BANK: CREDIT RISK AS AT 31ST DECEMBER 2022 (POST CCF & CRM) UNDER STANDARDISED APPROACH: EXPOSURES BY ASSET CLASSES AND RISK WEIGHTS
470
0% 20% 35% 50% 60% 75% 100% 150% 250% Total credit
Risk Weight exposures
amount
Asset Class
Claims on central government and CBSL 292,496,621 61,338,441 - - - - - - - 353,835,062

Claims on public sector entities - 11,523 - - - - 310,757 1,080,241 - 1,402,521
Claims on banks exposures - 66,482,204 - 9,228,102 - - 2,401,703 115,551 - 78,227,560
&ODLPVRQȴQDQFLDOLQVWLWXWLRQV - 222,554 - 40,324,940 - - 7,261,495 - - 47,808,989
ABOUT

Claims on corporates - 13,528,481 - 27,336,841 - - 400,717,067 243,706 - 441,826,095
Retail claims 55,673,877 10,872,580 - - 34,436,195 124,039,299 48,794,303 - - 273,816,254
Claims secured by residential property - - 39,238,770 - - - 10,840,728 - - 50,079,498
Non-performing assets - - - 1,515,437 - - 36,843,490 8,193,146 - 46,552,073
Higher-risk categories - - - - - - - - 974,296 974,296
Cash items and other assets 21,767,723 120,589 - - - - 22,723,286 - - 44,611,598
369,938,221 152,576,372 39,238,770 78,405,320 34,436,195 124,039,299 529,892,829 9,632,644 974,296 1,339,133,946
TABLE - 4 (B) GROUP: CREDIT RISK AS AT 31ST DECEMBER 2022 (POST CCF & CRM) UNDER STANDARDISED APPROACH: EXPOSURES BY ASSET CLASSES AND RISK WEIGHTS
0% 20% 35% 50% 60% 75% 100% 150% 250% Total credit
Risk Weight exposures
amount
Asset Class
Claims on central government and CBSL 298,185,488 61,338,441 - - - - - - - 359,523,929

Claims on public sector entities - 11,523 - - - - 310,757 1,080,241 - 1,402,521
Claims on banks exposures - 66,512,871 - 9,228,102 - - 2,401,703 115,551 - 78,258,227
&ODLPVRQȴQDQFLDOLQVWLWXWLRQV - 222,554 - 35,148,843 - - 7,261,495 - - 42,632,892
Claims on corporates - 13,528,481 - 27,336,841 - - 398,445,201 243,706 - 439,554,229
Retail claims 63,079,903 11,353,913 - - 34,436,195 124,039,299 69,693,359 - - 302,602,669
Claims secured by residential property - - 39,238,770 - - - 10,840,728 - - 50,079,498
Non-performing assets - - - 1,515,437 - - 37,240,271 15,335,418 - 54,091,126
Higher-risk categories - - - - - - - - - -
Cash items and other assets 21,919,138 120,589 - - - - 34,344,699 - - 56,384,426
383,184,529 153,088,372 39,238,770 73,229,223 34,436,195 124,039,299 560,538,213 16,774,916 - 1,384,529,517
STRATEGY REPORT
TABLE - 5: OPERATIONAL RISK FOR THE PERIOD ENDED 31ST DECEMBER 2022 UNDER THE ALTERNATIVE STANDARDISED APPROACH
Bank Group
Capital charge Fixed factor Gross income/Average loans & advances Capital charge Fixed factor Gross income/Average loans & advances
Business lines factor 1st Year 2nd Year 3rd Year factor 1st Year 2nd Year 3rd Year
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
AND ANALYSIS
The Alternative Standardised Approach

&RUSRUDWHȴQDQFH 5,097,905 6,370,608 12,034,323 5,097,905 6,370,608 12,034,323
Trading and sales 5,250,359 10,196,242 12,506,896 9,109,264 16,106,683 16,302,856
Payment and settlement 5,764 8,235 42,125 5,764 8,235 42,125
Agency services 5,930 75 - 5,930 75 -
Asset management - - - - - -
Retail brokerage - - - - - -
Retail banking 376,485,594 405,226,362 445,917,998 376,485,594 405,226,362 445,917,998
Commercial banking 366,626,084 387,887,887 476,455,095 360,790,189 382,051,992 470,619,200
Capital charge (Rs 000) 6,963,925 7,747,205

GOVERNANCE AND
RISK MANAGEMENT
Risk Weighted Amount (Rs 000) 55,711,400 61,977,640
TABLE - 6: MARKET RISK AS AT 31ST DECEMBER 2022 UNDER STANDARDISED MEASUREMENT METHOD
Item Bank Group

Rs 000 Rs 000
(a) Capital Charge for Interest Rate Risk 25,713 25,713

General interest rate risk 25,713 25,713
6SHFLȴFLQWHUHVWUDWHULVN - -
(b) Capital Charge for Equity - 38,047

General equity risk - 22,640
6SHFLȴFHTXLW\ULVN - 15,407
(c) Capital Charge for Foreign Exchange & Gold 192,004 192,004
(d) Capital Charge (a) + (b) + (c) 217,717 255,764
Risk Weighted Amount (d) * 100/12.5 1,741,736 2,046,112
INFORMATION
SUPPLEMENTARY

471
SUMMARY DISCUSSION ON process involves evaluating the amount of In order to boost its capital levels, the Bank
ADEQUACY/MEETING CURRENT AND risk each business unit contributes to the successfully raised Rs 10 Bn worth of
FUTURE CAPITAL REQUIREMENTS total risk of the Bank and the consequent Tier II capital in February 2023 via issuance
Overview capital requirements. Further, it involves of Basel III compliant, listed, rated,
determining the capital charge to each unsecured, subordinated, redeemable
Having understood that proper “Capital
business unit whose activities contributes 5-year debentures with a non-viability
Management” is vital in ensuring the long-
to Bank’s overall risk, thereby inducing conversion.
term stability of the business, Sampath
the business units to generate returns
Bank has continued to maintain Capital
compensating the risk undertaken by Moving Forward
Adequacy Ratios over and above the
them. 7KH%DQNLVUHDG\WRH[HFXWHWKHLGHQWLȴHG
regulatory minimum requirements.
medium and long-term strategies to
Capital Management Process improve Capital Adequacy Ratios in
Capital Allocation
The overall Capital Management of the line with CBSL minimum regulatory
(΍HFWLYHULVNPDQDJHPHQWIUDPHZRUN
Bank comes under the purview of the requirements.
would ensure the stability of the Bank, by
“Board Capital Planning Committee” (BCPC).
protecting it against market, credit, liquidity,
The Committee consists of the most In addition, necessary actions would be
operational and reputational risk. The main
senior and experienced Directors. The LGHQWLȴHGWRRSWLPLVHWKH5LVN:HLJKWHG
protection provider is the Bank’s capital.
Capital Management Process is reviewed Assets for the purpose of improving the
Determining the optimum capital structure
periodically by the BCPC. capital allocation of the Bank.
would be one of the most important
risk management goals of the Bank. This
TABLE - 7: LIQUIDITY COVERAGE RATIO - ALL CURRENCY

Total Total Total Total
un-weighted weighted un-weighted weighted
value value value value
Rs 000 Rs 000 Rs 000 Rs 000
Total Stock of High-Quality Liquid Assets (HQLA) 227,907,340 226,064,957 271,568,230 271,499,215
Level 1 assets 215,624,790 215,624,790 271,108,130 271,108,130
Level 2A assets 12,282,550 10,440,167 460,100 391,085
Level 2B assets - - - -
7RWDO&DVK2XWΌRZV 1,279,949,345 218,717,855 1,182,402,491 210,391,845
Deposits 1,103,212,882 201,023,717 978,368,455 164,213,669
Unsecured wholesale funding 952,116 952,116 10,886,161 10,886,161
Secured funding transactions 678,133 - 3,225,782 -
Undrawn portion of committed (irrevocable) facilities and other
contingent funding obligations 165,683,276 7,319,084 164,636,928 10,006,850
Additional requirements 9,422,938 9,422,938 25,285,165 25,285,165
7RWDO&DVK,QΌRZV 145,738,258 64,436,052 92,692,468 83,182,811
Maturing secured lending transactions
backed by collateral 39,362,999 28,934,475 43,245,762 39,378,828
Committed facilities - - - -
2WKHULQȵRZVE\FRXQWHUSDUW\ZKLFKDUH
maturing within 30 days 43,764,238 28,290,501 21,713,007 18,501,721
Operational deposits 55,399,945 - 2,431,437 -
2WKHUFDVKLQȵRZV 7,211,076 7,211,076 25,302,262 25,302,262
7RWDO1HW&DVK2XWΌRZV 1,134,211,087 154,281,803 1,090,275,493 127,209,034
Liquidity Coverage Ratio (%) (Stock of High-Quality Liquid Assets/
7RWDO1HW&DVK2XWΌRZV 146.53 213.43

TABLE - 8: LEVERAGE RATIO
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000

Total Exposure 1,365,506,412 1,334,097,540 1,410,027,386 1,375,911,189
On-balance sheet exposure (excluding derivatives and securities
ȴQDQFLQJWUDQVDFWLRQVDQGDVVHWDPRXQWDGMXVWHGLQ%DVHOΖΖΖ
Tier I capital) 1,289,763,138 1,188,759,646 1,334,045,648 1,230,790,486
Derivative exposure 20,762,312 69,917,805 20,762,312 69,917,805
6HFXULWLHVȴQDQFLQJWUDQVDFWLRQH[SRVXUH 10,072,569 5,193,779 10,299,569 4,982,788
2WKHUR΍EDODQFHVKHHWH[SRVXUH 44,908,393 70,226,310 44,919,857 70,220,110
Basel III Leverage Ratio (%) (Total Tier I Capital/Total
Exposure)*100 7.00 7.80 7.29 8.08
TABLE - 9: NET STABLE FUNDING RATIO
Bank
Rs 000 Rs 000
Total Available Stable Funding 1,028,011,411 936,484,057

Total Required Stable Funding 654,365,067 624,656,710
5HTXLUHGVWDEOHIXQGLQJȂRQEDODQFHVKHHWDVVHWV 649,825,315 616,497,165
5HTXLUHGVWDEOHIXQGLQJȂR΍EDODQFHVKHHWLWHPV 4,539,752 8,159,545
Net Stable Funding Ratio (%) (Total Available Stable Funding /Total Required Stable Funding)*100 157.10 149.92

TABLE - 10: MAIN FEATURES OF REGULATORY CAPITAL INSTRUMENTS
474
Capital instruments issued by the Bank
Description of the capital instrument 2018-2023 2019-2024 2021-2028

Basel III Tier II compliant Listed Rated Basel III Tier II compliant Listed Rated Basel III Tier II compliant Listed Rated
Unsecured Subordinated Redeemable Unsecured Subordinated Redeemable Unsecured Subordinated Redeemable
Debentures Debentures Debentures
Issuer Sampath Bank PLC Sampath Bank PLC Sampath Bank PLC
8QLTXHLGHQWLȴHU D0427-LK0090D23901 D0452-LK0090D24156 D0510-LK0090D24743
Governing law(s) of the instrument Companies Act No. 07 of 2007/CSE listing rules/Banking Act No. 30 of 1988/Securities Exchange Commission Act
ABOUT
Original date of issuance 20th March 2018 28th February 2019 12th April 2021

Par value of instrument (per debenture) Rs 100/- Rs 100/- Rs 100/-
Perpetual or dated Dated Dated Dated
Original maturity date, if applicable 20th March 2023 28th February 2024 12th April 2028
Amount recognised in regulatory capital
(in Rs 000 as at the reporting date) 375,000 1,750,000 6,000,000
$FFRXQWLQJFODVVLȴFDWLRQ (TXLW\/LDELOLW\ Liability Liability Liability
Issuer call subject to prior supervisory approval
Optional call date, contingent call dates and redemption amount (Rs 000) n/a n/a n/a
Subsequent call dates, if applicable n/a n/a n/a
Coupon/Dividend
)L[HGRUȵRDWLQJGLYLGHQGFRXSRQ D0427-Fixed rate D0452-Fixed rate D0510-Fixed rate
Coupon rate and any related index 'SD 'SD 'SD

Non-cumulative or cumulative Cumulative Cumulative Cumulative
Convertible or Non-convertible Convertible Convertible Convertible
If convertible, conversion trigger (s) * * *
If convertible, fully or partially * * *
If convertible, mandatory or optional * * *
If convertible, conversion rate ** ** **
* In the event of an occurrence of a trigger event as determined at the sole discretion of the Central Bank of Sri Lanka, there would be a conversion of debentures to ordinary voting shares by the
company without any requirement of approval from the debenture holders, in compliance with Basel III requirements. Upon the occurrence of a trigger event, the outstanding balance of the
debentures including the total par value of the debentures and debenture interest accrued and unpaid as at that date will be permanently converted to ordinary voting shares at the conversion
price.
** The conversion rate will be based on the simple average of the daily Volume Weighted Average Price (VWAP) of an ordinary voting share as published by the Colombo Stock Exchange during the
three months (03) period, immediately preceding the date of the trigger event

STRATEGY REPORT
TABLE - 11 BANK: DIFFERENCES BETWEEN ACCOUNTING AND REGULATORY SCOPES AND MAPPING OF FINANCIAL STATEMENT
CATEGORIES WITH REGULATORY RISK CATEGORIES AS AT 31ST DECEMBER 2022
Item Carrying values Carrying values Subject to credit Subject to Not subject
as reported under scope risk framework market risk to capital
in published of regulatory framework requirements
΋QDQFLDO reporting or subject to
statements deduction from
capital
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Assets
Cash & cash equivalents 79,162,545 79,162,545 79,263,832 - -
Balances with Central Bank of Sri Lanka 31,579,185 31,579,185 31,579,185 - -
Placements with banks 10,927,216 10,927,216 10,929,771 - -
Reverse repurchase agreements 10,072,569 10,072,569 10,072,569 - -
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 44,598 44,598 44,598 - -
- measured at fair value 4,641,277 4,641,277 - 4,641,277 -
- loans & advances 811,157,649 811,157,649 869,412,053 - 45,370,306
- debt & other instruments 278,775,796 278,775,796 279,113,301 - -
comprehensive income 32,772,930 32,772,930 32,772,930 - -
Investment in subsidiaries 3,898,512 3,898,512 2,002,014 - 1,896,498
Property, plant & equipment 8,910,525 8,910,525 8,910,525 - -
Intangible assets 578,031 578,031 - - 578,031
Right-of-use assets 3,540,286 3,540,286 3,540,286 - -
Deferred tax assets 21,734,244 21,734,244 - - 21,734,244
Other assets 26,630,974 26,630,974 26,630,974 - -
Total Assets 1,324,426,337 1,324,426,337 1,354,272,038 4,641,277 69,579,079
Liabilities
Due to banks 11,297,181 11,297,181 - - -
'HULYDWLYHȴQDQFLDOLQVWUXPHQWV 1,449,393 1,449,393 - - -
Securities sold under repurchase agreements 2,283,291 2,283,291 - - -
- due to depositors 1,096,099,874 1,096,099,874 - - -
- due to other borrowers 9,173,923 9,173,923 - - -
- due to debt securities holders 25,259,536 25,259,536 - - -
5HWLUHPHQWEHQHȴWREOLJDWLRQ 1,845,228 1,845,228 - - -
Dividend payable 187,141 187,141 - - -
Current tax liabilities 18,754,155 18,754,155 - - -
Deferred tax liabilities - - - - -
Other liabilities 31,696,670 31,696,670 - - -
Total Liabilities 1,198,046,392 1,198,046,392 - - -
*URVVRΊEDODQFHVKHHWOLDELOLWLHV
Guarantees 43,824,217 43,824,217 43,824,217 - -
Documentary credit 20,991,504 20,991,504 20,991,504 - -
Acceptance 12,511,244 12,511,244 12,511,244 - -
Other contingent items 14,916,976 14,916,976 14,916,976 - -
Commitment for unutilised facilities 225,212,900 225,212,900 225,212,900 - -
Other commitments 1,025,390 1,025,390 1,025,390 - -
7RWDOJURVVRΊEDODQFHVKHHWOLDELOLWLHV 318,482,231 318,482,231 318,482,231 - -
Shareholders' equity
Stated capital 47,622,493 47,622,493 - - -
of which amount eligible for CET I 47,622,493 47,622,493 - - -
of which amount eligible for AT I - - - - -
Retained earnings 8,169,471 8,169,471 - - -
Accumulated other comprehensive income 2,248,650 2,248,650 - - -
Other reserves 68,339,331 68,339,331 - - -
Total Shareholders' equity 126,379,945 126,379,945 - - -

TABLE - 12 GROUP: ASSESSMENT OF DOMESTIC SYSTEMICALLY IMPORTANT BANKS (D-SIBs) AS AT 31ST DECEMBER 2022
Rs 000
Size Indicator
Section 1 - Total exposure
Total exposure measure 1,410,027,386
Interconnectedness Indicators
6HFWLRQ,QWUD΋QDQFLDOV\VWHPDVVHWV
a. Funds deposited with or lent to other ȴQDQFLDO institutions 110,514,745
(i) Funds deposited 78,756,116
(ii) Lending 31,758,629
E+ROGLQJVRIVHFXULWLHVLVVXHGE\RWKHUȴQDQFLDOLQVWLWXWLRQV 11,685,864
F1HWSRVLWLYHFXUUHQWH[SRVXUHRIVHFXULWLHVȴQDQFLQJWUDQVDFWLRQV 6)7V ZLWKRWKHUȴQDQFLDOLQVWLWXWLRQV 424,752
G2YHUWKHFRXQWHU 27& GHULYDWLYHVZLWKRWKHUȴQDQFLDOLQVWLWXWLRQVWKDWKDYHDQHWSRVLWLYHPDUNWRPDUNHWYDOXH 80,640
ΖQWUDȴQDQFLDOV\VWHPDVVHWV 122,706,001
6HFWLRQ,QWUD΋QDQFLDOV\VWHPOLDELOLWLHV
D)XQGVGHSRVLWHGE\RUERUURZHGIURPRWKHUȴQDQFLDOLQVWLWXWLRQV 37,103,215
(i) Funds deposited 16,501,096
(ii) Borrowings 20,602,119
E1HWQHJDWLYHFXUUHQWH[SRVXUHRIVHFXULWLHVȴQDQFLQJWUDQVDFWLRQVZLWKRWKHUȴQDQFLDOLQVWLWXWLRQV 1,723,800
F2YHUWKHFRXQWHUGHULYDWLYHVZLWKRWKHUȴQDQFLDOLQVWLWXWLRQVWKDWKDYHDQHWQHJDWLYHPDUNWRPDUNHWYDOXH 1,506,598
ΖQWUDȴQDQFLDOV\VWHPOLDELOLWLHV 40,333,613
Section 4 - Securities outstanding

Securities outstanding 29,586,241
Substitutability/Financial Institution Infrastructure Indicators

Section 5 - Payments made in the reporting year (excluding intra-group payments)
Payments activity 6,816,628,885
Section 6 - Assets under custody

Assets under custody 4,357,346
Section 7 - Underwritten transactions in debt and equity markets

Underwriting activity -
Section 8 - Trading volume

a. Number of shares or securities 758,864
b. Value of the transactions 26,281
Complexity Indicators
Section 9 - Notional amount of over the counter (OTC) derivatives
OTC derivatives 14,916,976
Section 10 - Level 2 assets

Level 2 assets 12,282,550
6HFWLRQ)LQDQFLDODVVHWVUHFRJQLVHGWKURXJKSUR΋WRUORVVPHDVXUHGDWIDLUYDOXH ΋QDQFLDODVVHWV
fair value through other comprehensive income
a. Debt instruments 32,682,220
b. Equity instruments 4,732,043
c. Derivatives 44,598
Section 12 - Cross jurisdictional liabilities

Cross jurisdictional liabilities (excluding derivatives and intra-group liabilities) 13,723,966
Section 13 - Cross jurisdictional claims

Cross jurisdictional claims (excluding derivatives and intra-group claims) 119,523,725

DETAILED MATERIAL TOPICS
GRI 201/203/207
3UR΋WDELOLW\DQG)LQDQFLDO6WDELOLW\
Context Impact Assessment
3URȴWDELOLW\DQGȴQDQFLDOVWDELOLW\DUHVHHQDVWKHNH\HQDEOHUVLQ *UHDWHUȴQDQFLDOVWDELOLW\FUHDWHVDSODWIRUPWKURXJKZKLFKWKH%DQNFDQ
creating value for our stakeholders and also for growing our business expand its market presence and thereby deliver on its promise to help
RYHUWKHVKRUWPHGLXPDQGORQJWHUP+LJKHUSURȴWVHQDEOHXVWR LQGLYLGXDOVWRDFKLHYHWKHLUȴQDQFLDOJRDOVVXSSRUWWKHJURZWKRI
increase the direct value distributed to stakeholders each year, in terms LQGXVWU\GHYHORSPHQWRIWKH60(VHFWRUDQGSURPRWHJUHDWHUȴQDQFLDO
RIGLYLGHQGSDLGWRVKDUHKROGHUVVDODULHVDQGEHQHȴWVWRHPSOR\HHV inclusion as well as direct resources towards environmental concepts, all
taxes paid to the government and higher annual spend on community of which will ultimately lead to nationwide progress.
investments.
Economic Environment People
high high high
Management Strategy Key Actions Evaluation and Reporting

and Commitments
We strive to combine a Our approach is three-fold and focuses on; The following indicators are used
robust business model, WRHYDOXDWHWKHH΍HFWLYHQHVVRI
Ì 3UR΋WPD[LPLVDWLRQ 7KHNH\GULYHUVRIWKH%DQNȇVSURȴWPD[LPLVDWLRQ
strong governance and our approach;
model, are the aggressive focus on operating income growth coupled with
an integrated risk
disciplined cost management strategies to improve the Cost-to-income
management and Ì Net Interest Margin
ratio.
compliance framework to
Ì Cost-to-Income Ratio
ensure long-term Ì )XO΋OOLQJDOOPDQGDWRU\WD[REOLJDWLRQVWe have a tax strategy in place,
Ì 3URȴWEHIRUH7D[
SURȴWDELOLW\DQG which is based on the prevailing tax laws of the country. As a licensed
FRQWLQXHGȴQDQFLDO commercial bank, Sampath Bank’s tax strategy is guided by the Inland Ì 3URȴWDIWHU7D[
stability in a highly Revenue Act No. 24 of 2017 and its amendments and the Value Added Tax Ì Total Impairment on Loans
competitive industry. Act No. 14 of 2002 and its amendments. The tax strategy is prepared for DVDRI*URVV/RDQVDQG
internal use only and is therefore not published. As a responsible Advances
corporate citizen, the purpose of our tax strategy is to ensure that the
Ì Cost of Risk
Bank’s tax obligations are met on time, every time and without the burden
of any additional liabilities. The Tax Unit of the Finance Department under Ì Stage 3 Impairment to Stage
WKHVXSHUYLVLRQRIWKH([HFXWLYH'LUHFWRU&KLHI)LQDQFLDO2ɝFHULV 3 Loans Ratio
responsible for preparing the tax strategy. As part of its duties, the Tax Unit Ì Impaired Loans (Stage 3)
is also required to proactively review new developments in the broader tax Ratio
framework and advise the Board of Directors on its interpretation and the Ì Return on Equity
risks to the Bank’s bottom line. In this regard, the Tax Unit also seeks an
Ì Return on Assets
independent opinion from an external tax consultant (Messrs Ernst &
Young) on a case by case basis, to help in the dissemination of tax related Ì Earnings per Share
information. We also seek the assurance of our external tax consultant Ì Dividend per Share
Messrs Ernst & Young to review and certify all of the Bank’s routine tax
Ì Net Assets Value per Share
payments prior to them being paid out. At the same time, the Bank’s Tax
Unit engages with the regulators, either directly or via Messrs Ernst & Ì Capital Adequacy Ratios
Young to resolve issues pertaining to the Bank. While there is no forum - Tier I and Total (Tier I + Tier
that allows banks to get involved in the process of formulating tax policies II) Capital
or legislature, Sampath Bank indirectly provides inputs via its external tax Ì Liquid Assets Ratios
consultant as well as through the Sri Lanka Banks’ Association, to support Ì Liquidity Coverage Ratios
WKHUHJXODWRUȇVRQJRLQJH΍RUWVWRUHIRUPWKHFRXQWU\ȇVWD[UHJLPH
Ì Net Stable Funding Ratio
Ì Safeguarding the Balance Sheet - To safeguard our Balance Sheet, we
focus on strictly complying with regulatory requirements with regard to
liquidity and CET I, Tier I and Total Capital Adequacy Ratios. This means
prioritising the allocation of capital resources to meet our strategic
objectives while managing asset quality and impairments through portfolio
GLYHUVLȴFDWLRQDQGSURDFWLYHULVNDVVHVVPHQWVYLV¢YLVWKH%DQNȇVULVN
appetite and tolerance limits.

Macroeconomic Headwinds
The economic crisis that erupted in Sri Lanka in early 2022 together Macroeconomic instability has a negative impact on economic growth,
ZLWKWKHIXHODQGHQHUJ\VKRUWDJHVULVLQJLQȵDWLRQ5XSHHGHSUHFLDWLRQ OHDGLQJWRSRWHQWLDOO\LQȵDWLRQDU\FRQGLWLRQVDQGKLJKHUXQHPSOR\PHQW
and the foreign exchange liquidity shortfall, all leading to a never- and in turn causing a deterioration in average disposable income.
before-seen social unrest and political instability, left the country’s
economy in its worst ever position in the post-independence era.
high medium high

and Commitments
The Sampath Bank Board remained In light of the unprecedented macroeconomic conditions, Ì Financial Results
SURDFWLYHLQLWVH΍RUWVWRPDQDJHWKH a prudent approach was adopted to realign business
Ì Economic Value Added
challenges arising from the adverse units to face the challenges. All business and operational
macroeconomic conditions in 2022, with strategies were revisited and where necessary, changes Ì Issuer Rating
considerable time allocated at all Board were made to the risk management fundamentals while
meetings for the discussion of relevant JRYHUQDQFHDQGRYHUVLJKWZDVVWUHQJWKHQHGLQLGHQWLȴHG Ì Industry Ranking
matters and for formulating appropriate areas. Ì Brand Accolades
responses to minimise the impact on the
Bank and its stakeholders. Actions taken in this regard are described in detail across Ì Sampath Bank share price and
the Report, in particular in the Business Review section annual trading volumes at the
Under the guidance of the Board, all (pages 148 to 163), the Capital Management Reports CSE
Board Sub-Committees and all Executive (pages 79 to 147), Risk Management Report (pages 204 to Ì Stakeholder Surveys
level committees too were actively 217), Corporate Governance Report (pages 168 to 181 and
involved in monitoring and managing the 432 to 466 ) and Committee Reports (pages 190 to 202).
respective areas under their purview.
Physical Channels GRI 202-2
Physical channels are the foundation on which Sampath Bank’s Sampath Bank’s physical channels play a fundamental role in fueling
traditional brick-and-mortar banking model is built. To this day, physical HFRQRPLFDFWLYLW\DFURVV6UL/DQND7KHSURGXFWVDQGVHUYLFHVR΍HUHGYLD
channels such as our Branches, Cash Recycler Machines (CRM), physical channels empower individuals and businesses to achieve their
Automated Teller Machines (ATM), Automated Cheque Deposit Kiosks ȴQDQFLDODVSLUDWLRQVLQWXUQIXHOLQJHFRQRPLFDFWLYLW\DQGMREFUHDWLRQ
(QDK) and Cash Deposit Machines (CDM) are the main sources that all collectively leading to broader socio-economic progress across the
connect customers and the Bank. More recently, our Agent Banking country.
channel has emerged as an important touch point in reaching
customers in remote regions of the country.
high low high

Physical Channels Contd.

and Commitments
We follow a broad-based channel Our priority is to serve the banking needs of communities in We monitor customer complaints and
management approach to ensure each of a particular area and hence strategic location is the key conduct regular customer satisfaction
our physical channels provide the deciding factor in situating our branches. For this reason, surveys to determine if our physical
best-in-class customer experience. ZHȴUVWH[SORUHLIWKH%DQNȇVRZQIUHHKROGSURSHUWLHV channels continue to meet expectations
SRUWIROLRR΍HUVDQ\VXLWDEOHSURSHUWLHVDQGLIQRWZHVHHN of customers. In addition, the Bank’s
We make sure our channel architecture RXWSURSHUWLHVWKDWR΍HUWKHQHFHVVDU\ORFDWLRQDGYDQWDJHV leadership routinely reviews the
complies with all regulatory requirements and secure them through a long term lease. H΍HFWLYHQHVVRIDOOSK\VLFDOFKDQQHOV
for licensed commercial banks as with the aim of making necessary
stipulated by the Central Bank of Sri Our teams are continuously working to optimise the use of improvements to ensure each one has
Lanka. Additionally, we strive to our physical infrastructure in order to improve the the capacity and capability to meet their
benchmark our channels against H΍HFWLYHQHVVDQGHɝFLHQF\RIRXUFKDQQHORSHUDWLRQV7KH stated objectives.
international banking standards and annual budgeting process includes separate capital
globally accepted best practices to give expenditure (CAPEX) and maintenance budgets to facilitate
our customers the convenience of world necessary improvements to our branches on an ongoing
class banking systems through every one basis. The Bank undertakes CAPEX on freehold properties
of our physical channels. and for leasehold properties contracted over the long term.
Digitalisation Agenda
6DPSDWK%DQNȇV'LJLWDOLVDWLRQ$JHQGDVXSSRUWVWKH%DQNȇVH΍RUWVWR 6DPSDWK%DQNȇV'LJLWDO&KDQQHOVDUHDFRVWH΍HFWLYHDQGKLJKO\HɝFLHQW
WUDQVIRUPLQWRDZRUOGFODVVGLJLWDOȴQDQFLDOLQVWLWXWLRQYLV¢YLVWZRNH\ alternative to reach a wider target audience. Digital Banking solutions
pivots; are designed to make banking simple, easily accessible in order to
HQDEOHLQGLYLGXDOVDQGEXVLQHVVHVDURXQGWKHFRXQWU\WREHQHȴWIURP
Ì Digital Banking solutions enable Sampath Bank to go beyond the DFFHVVWRȴQDQFLDOVHUYLFHV
traditional brick and mortar banking model and expand its reach to
Meanwhile, strong, resilient IT infrastructure allows the Bank to provide
DYDULHW\RIGL΍HUHQWFXVWRPHUVHJPHQWV
uninterrupted banking services to customers and ensure the continuity
Ì Digital infrastructure that forms the basis of the Bank’s competitive of economic activity, even amidst external disruptions.
edge and leadership position in the market.
high medium high

and Commitments
Our approach to digital The Bank’s IT Department keeps close track to identify the Usage volumes and customer feedback are
adoption is based on our latest digital banking trends on the global front and continuously monitored to determine if our digital
intention to transform determine their relevance to suit the Sri Lankan banking banking solutions are having the desired impact of
into a world class digital context. This is coupled with continuous and ongoing enhancing the customers’ banking experience. In
bank through continuous research to create timely and relevant solutions that can recent years, we have begun leveraging the latest data
expansion of our end to enhance the customers’ banking experience. While many of science and predictive analytics tools to dynamically
end digital channel our digital banking solutions are developed in-house, we redesign our evaluation approaches to ensure we are
architecture coupled with remain open to tying up with Fin-techs and other specialists continuously increasing the coverage across a broader
ongoing investments to who present solutions that enhance the overall customer spectrum of bank-wide operations.
upgrade and update core experience, while also reducing the Bank’s cost-to-serve.
IT infrastructure systems As always, the Bank’s leadership also continues to
Investments in core infrastructure are reviewed and
on par with latest global URXWLQHO\UHYLHZWKHH΍HFWLYHQHVVRIDOOGLJLWDOEDQNLQJ
updated by the Board annually in line with the Bank’s solutions with the aim of making necessary
standards.
H΍RUWVWRDXWRPDWHDOOFULWLFDOEXVLQHVVSURFHVVHVLPSURYH improvements to ensure each one has the capacity
IT functionality and build system resilience. and capability to meet their stated objectives.

Business Continuity Planning

Business Continuity Planning (BCP) creates a foundation for ensuring A strong BCP increases reliability and thereby enhances our capability to
the continuity of business functions in the event of unforeseen consistently meet the expectations of stakeholders.
disruptions.
high low high

and Commitments
Our BCP is made up of While every emergency situation poses unique problems based on external $VSDUWRIRXUH΍RUWVWR
contingency plans for the entire factors, such as time of day and the severity of the disruption, it is our aim to GHWHUPLQHWKHH΍HFWLYHQHVVRI
gamut of business processes, restore operations and be able to resume business operations as per the BCP framework, we
assets, human resources and SUHGHȴQHGȊ5HFRYHU\7LPH2EMHFWLYHV 572 ȋ routinely review the
every other aspect of the responsiveness of critical
EXVLQHVVWKDWPLJKWEHD΍HFWHG To facilitate this, our BCP is structured to include; dedicated relocation centers processes. We also carry out
These plans typically contain (Disaster Recovery Sites) for mission critical functions. This ensures smooth annual risk assessment and
detailed checklists and also functioning of core banking activities and supports comprehensive data backup business impact analysis to
include the relevant roles and DQGUHFRYHU\RIDOOFULWLFDOȴQDQFLDODQGRSHUDWLRQDOV\VWHPVZLWKLQVWLSXODWHG consider both internal and
responsibilities along with RTOs in order to assure customers of uninterrupted access to their funds and external factors that have the
contact information for securities, in the event of a disruption. SRWHQWLDOWRD΍HFWRXUFXUUHQW
emergency responders, key BCP protocols.
personnel and relevant service As a Bank, major component of our BCP is the Disaster Recovery Plan that
providers. Strategies on how contains strategies for handling IT disruptions to networks, servers, personal
business operations can be computers and mobile devices. In this context, we apply Business Impact
maintained for both short-term Analysis (BIA) techniques, through which we quantify adverse impacts to the
and long-term outages are also business based on the criticality of the process and the relevant RTOs prioritise
incorporated in the BCP. the business process and the Disaster Recovery Procedure (DRP), to facilitate
the swift recovery of IT systems following an interruption to the business.
Other important aspects that determine the success of the BCP are; proper
communication, training and testing, which ensures employees remain aware
of the purpose of the BCP and understand the proper use of the BIA and DRP.
Corporate Brand Image/Goodwill Building
2XUFRUSRUDWHEUDQGLVDUHȵHFWLRQRIZKDWZHDVD%DQNVWDQGIRUΖWLV The numerous brand accolades received over the years testify to
also one of the most valuable indicators of Sampath Bank’s success, Sampath Bank’s contribution to the Sri Lankan economy, its people and
because it determines our status quo in the local banking sector based its environment.
on our ability to consistently honour our promises to our stakeholders.
high high high

Corporate Brand Image/Goodwill Building Contd.

and Commitments
Our strategic journey over the past 35+ We strive to project Sampath Bank as a truly authentic Sri Lankan The annual rating review by Fitch
years has focused on building a EDQNWKDWDGGVOLIHWLPHYDOXHWRLWVFXVWRPHUVE\R΍HULQJXQLTXH Ratings Lanka Limited provides
GLVWLQFWLYHEUDQGLPDJHWKDWUHȵHFWVRXU LQQRYDWLYHDQGWDLORUPDGHȴQDQFLDOVROXWLRQVWKDWDUH an indication regarding the
core values and lives up to our vision, to benchmarked against international standards. Premised on this, ȴQDQFLDOVWDELOLW\DQGUHVLOLHQFH
be “The growing force in Sri Lankan we have continued to invest in the latest and most sophisticated RIWKH%DQNWKXVFRQȴUPLQJWKH
ȴQDQFLDOVHUYLFHVȋ SDWKEUHDNLQJWHFKQRORJLHVWRFUHDWHZRUOGFODVVȴQDQFLDO credibility of the Sampath brand
solutions, while staying true to our roots as a Sri Lankan bank. within the local banking sector.
Meanwhile, to prevent any ambiguity Furthermore, we have adopted an agile business model to ensure Moreover, regular market
and maintain consistency regarding our RXUVWUDWHJLHVDUHȵXLGDQGFRQWLQXHWRHYROYHLQRUGHUWRPHHWNH\ research activities are
brand, strict brand guidelines are in stakeholder deliverables. In this regard, we expect every member conducted each year coupled
place to bind all those who work with of Team Sampath to conduct themselves with the utmost integrity with the comprehensive
the Sampath brand and enforce them and transparency in performing their assigned job roles. stakeholder surveys done, to
to adhere to standardised brand capture the perceptions of all
architecture that will ensure the Bank’s At the same time, we want to ensure that our brand is known for our stakeholders regarding the
stakeholders receive a consistent enriching the lives of all communities across Sri Lanka and for Sampath brand image.
singular experience at all times. making a positive contribution to the environment.
Information Security GRI 418
With the rapid advancement of digital technology in all aspects of our A solid information security framework allows the Bank to explore new
business, protecting our information and data assets is seen as a opportunities and partnerships for the purpose of business growth and
mission critical priority to safeguard our reputation and prevent possible stakeholder value creation.
ȴQDQFLDOORVVHV
medium low medium

and Commitments
Sampath Bank’s Information Security We have implemented a range of multi-layer The Information Security Department maintains
ecosystem has been benchmarked security safeguards, including a clear segregation continuous and ongoing monitoring to determine the
against internationally recognised RIDXWKRULW\WRDFFHVVGL΍HUHQWV\VWHPVDQG Bank’s sensitivity to Information Security Risk.
standards, including ISO 27001:2013 privilege user access management to prevent Internally, we have strict protocols to monitor
Information Security Standard, unauthorised security breaches. Moreover, we privileged user login activity on the PAM (Privileged
which has been in place since 2016. strive continuously to improve the robustness of Access Management) platform and across all critical
Information Security architecture by focusing on systems. We also conduct quarterly vulnerability
In addition, we are working to align three key elements; assessments as well as an annual information
our systems with relevant regulatory security risk assessment to determine both internal
requirements including the CBSL Ì Investing in the latest developments in the and external threats and evaluate associated
Direction No. 16 of 2021 on global Information Security related products Information Security Risk. The incident reports
“Regulatory Framework on and solutions. generated by the Incident Response Team also serve
Technology Risk Management and as an important tool to mitigate the impact of
Ì Raising awareness among employees, information security threats.
Resilience for Licensed Banks” and
customers and other stakeholders regarding
Personal Data Protection Act No. 9
cyber risks and in particular new social
of 2022. The Bank has undertaken 7KHVHH΍RUWVDUHIXUWKHUFRPSOHPHQWHGE\WKH
engineering and phishing techniques.
several parallel projects in order to annual surveillance audits conducted as part of the
comply with the respective target Ì Strengthening the governance framework to Ζ62UHFHUWLȴFDWLRQSURFHVVDQGWKH
dates set out under these directives. ensure risks are regularly reviewed and annual CBSL compliance requirements. These due
appropriate proactive and reactive diligence activities help to identify gaps that need to
measures are in place as and when needed. be addressed.

Talent Acquisition and Management GRI 401/405
To ensure Sampath Bank’s competitive edge over peers and realise the Our Talent Acquisition and Management framework is a key lever that
Bank’s strategy and long-term vision, we need to have the right people supports our ability to attract and retain a high calibre team to drive
ZKRDUHWKHULJKWȴWIRURXUEXVLQHVVSURSRVLWLRQDQGYDOXHFXOWXUH Sampath Bank, notwithstanding challenges.
medium low high
Management Strategy Key Actions Evaluation and

and Commitments Reporting
We strive to attract and retain the best 7KH%DQNLVFRPPLWWHGWRR΍HUFRPSHWLWLYHUHPXQHUDWLRQRQSDUZLWK We use the following
in-class talent with the right mix of PDUNHWVWDQGDUGV:HUHJXODUO\UHYLHZRXUVDODU\DQGEHQHȴWSDFNDJHVWR indicators to measure the
technical and behavioural competencies assess our position vis-à-vis industry benchmarks and ensure our team success of our talent
to meet our targeted business EHQHȴWVIURPPDUNHWFRPSHWLWLYHSD\DQGUHZDUGVDWDOOWLPHVΖQDGGLWLRQ acquisition and
requirements based on the following to the basic salary, all permanent employees of Sampath Bank are entitled management approach:
principles; WRWKHIROORZLQJEHQHȴWV
Ì Employee Retention
Ì Abiding by the Labour Law. Ì Reimbursement for professional education. Ratio.
Ì Encouraging female participation in Ì Loan schemes. Ì The number of

the workforce through the employees
Ì Various allowance schemes.
provision of non-discriminatory and promoted across
equal opportunity employment in Ì Educational loans. each employee
line with global best practices category.
outlined by the ILO (International Ì Personal Accident Insurance Scheme.
Ì 1:1 Employee
Labour Organisation) guidelines as Ì Medical facilities including Critical Illness and Cancer Funds, and Back-up ratio for Key
well as the UN Global Compact for Death Gratuity. Managerial Positions.
human rights and labour.
Accordingly, we uphold the right to Ì Travel expenses on a need basis. Ì Return to work ratio
equal pay and maintain a 1:1 equal after maternity leave.
Ì 84 days of maternity leave as well as regulated nursing hours for
pay ratio to ensure that men and
mothers of newborns.
women performing similar roles
are remunerated equally. Our Ì Early retirement scheme for employees completing a minimum of 45
non-discriminatory approach years of age.
extends across the employment
Ì Special leave entitlements including the new scheme introduced in
lifecycle where we do not at any
2021 to pursue overseas postgraduate education on a subject
point discriminate based on age,
relevant to the job or to be employed in a Bank/Financial Institution
gender, religion, marital status or
abroad.
any other condition protected by
law. Ì Holiday bungalow facilities.
Ì Demonstrating our commitment
WRZDUGVWKHH΍HFWLYHDEROLWLRQRI Beyond this, we strive to create a robust work environment that is both
Child Labour and the elimination of challenging and rewarding, in order to give employees the opportunity to
forced or compulsory labour. pursue both personal and professional growth. Our approach is based on
developing a strong performance-driven culture to facilitate employee
Ì Ensuring a safe working growth and career progression. We assign business objectives at every
environment free of harassment. level and to support this, we regularly engage with employees to ascertain
Our leadership principles dictate their performance and identify the root cause for any performance gaps,
the managers lead by example in if any. A formal performance appraisal mechanism is in place to facilitate
respectful treatment to colleagues. goal setting and to enable employees to align their goals with the Bank’s
short-term goals as well as long term strategic agenda, while Mid and End
Year Reviews serve as a transparent mechanism to assist employees to
evaluate their contribution in line with expectations of the Bank.

Talent Acquisition and Management Contd.

A framework of Board approved HR policies Our Performance Based Bonus Scheme and Recognition Schemes further
and procedures creates a foundation for demonstrates Sampath Bank’s commitment to drive a high performance
implementing compliance and best practices work culture. The new Performance Management System and Performance
IRUWKHEHQHȴWRIDOORXUHPSOR\HHV7KHVH Based Bonus Scheme is planned to be launched in 2023 for which the
policies and procedures are maintained groundwork was completed in the year under review.
under the stewardship of the Bank’s HR
Department. The HR Department under the
leadership of the Chief Human Resource
2ɝFHUUHJXODUO\UHYLHZVDQGXSGDWHV
SROLFLHVDQGSURFHGXUHVWRUHȵHFWQHZ
compliance requirements and latest best
practices that may become relevant from
time to time. The HR Department is further
required to monitor the implementation of
these policies without exception and the
responsibility lies upon the respective unit
heads.
Learning and Development GRI 404
Our competitive position, our success as a Bank and the continuity of our Learning and development paves the path for personal and professional
business, depend on our people having the required competencies. growth of employees, thus enabling them to become productive
members of society who contribute towards fueling economic activity.
high medium high

Our learning and development All business units are required to carry out a detailed training needs assessment for the The annual
strategy seeks to achieve two key forthcoming year, covering their annual training needs, based on their overall business performance
objectives; REMHFWLYHVDVZHOODVWKHLQGLYLGXDOWUDLQLQJUHTXLUHPHQWVLGHQWLȴHGWKURXJKGDWDFROOHFWHG appraisal
IRUWKHȴUVWDQGWKLUGTXDUWHUVRIHDFK\HDUWKURXJK%UDQFK&RPSHWHQF\/HYHO$VVHVVPHQW mechanism and
Ì Ensuring that all employees FRQGXFWHGLQWKHVHFRQGDQGIRXUWKTXDUWHUVUHVSHFWLYHO\7UDLQLQJQHHGVLGHQWLȴHGLQWKLV the post-
have access to learning and way are collated and form the basis for the annual training plan. The execution of the training
development opportunities annual training plan falls under the purview of the Sampath Learning Academy (SLA). feedback
which enable them to be process, both
suitably knowledgeable and The SLA team continuously taps into the Bank’s in-house expertise as well as external serve as key
skilled to carry out their sources including overseas training, to expose our employees to areas pertaining to their tools that help
designated roles. jobs as well as on industry best practices and regulatory matters. In recent years, we made to determine
important strides in advancing our learning and development approach by promoting whether
Ì To develop their talents in learning and
experiential learning to help employees ease into the Bank’s digital transformation agenda
ZD\VWKDWȴWZLWKWKH%DQNȇV development
and introducing e-learning tools to create a continuous learning environment. Our learning
long term growth trajectory. activities are
DQGGHYHORSPHQWDJHQGDDOVRLQFOXGHVVSHFLDOSURJUDPPHVWKDWVXSSRUWRXUH΍RUWVWR
build a stable talent pipeline, capable of taking ownership for the Bank’s future prospects. delivering the
desired results.

Learning and Development Contd.

As such, decisions about Individual training plans are drawn up for employees earmarked for development through
investment in learning and the annual performance appraisal process. This often includes highly specialised training
development are made bearing opportunities conducted by global leadership training institutes to enable our future
in mind the needs of the OHDGHUVWREHQHȴWIURPOHDUQLQJWKHODWHVWWRROVDQGWHFKQLTXHVΖQDGGLWLRQZHKDYH
business as well as the individual appointed our Senior Management team as knowledge leaders to ensure tacit knowledge
needs of each employee. is shared among these future leaders of the Bank. To help strengthen our internal training
resources in order to meet the future training needs of the Bank, we have also started a
special “train-the-trainer” series to create a specialist trainer pool for banking related topics.
6LQFHDOPRVWRIWUDLQLQJDFWLYLWLHVKDYHEHHQFRQGXFWHGYLDWKH%DQNȇVHOHDUQLQJ
platform and other online tools such as webinars. Following the relaunch of Vidvan in early
2022, we now maintain a classroom to online learning ratio of 15:85.
Employee Relations GRI 402
We believe that strong employee relations is the key to secure the Good relations with employees enhances team spirit and motivation,
commitment of our employees towards the Bank’s current and future XOWLPDWHO\OHDGLQJWRPRUHH΍HFWLYHDQGHɝFLHQWGHOLYHU\RIVWDNHKROGHU
prospects. aspirations.
medium low high

We operate on the premise that The following communication channels are in place to facilitate ongoing interactions The feedback we
constructive dialogue between the between employees and the Bank’s Management; receive from team
Bank’s Management, and employees members and
(or their representatives) is a Ì “MD’s Desk”, a platform used to provide vital information, share business plans SBEA is an
fundamental principle for building and Management expectations. important tool to
trust-based relationships. It is why determine if
we consider Sampath Bank Ì “MD’s Business Club”, an internal blog where employees can directly reach out employees are
Employees’ Association (SBEA) to be to the Sampath Bank Managing Director. VDWLVȴHGZLWKWKH
a vital stakeholder in our business. Ì “Sampath Sandeshaya”, the quarterly in-house magazine which carries news Bank’s employee
:LWKRYHURI7HDP6DPSDWK items, information regarding the Bank’s clubs/societies, articles and illustrations relations
being members of the SBEA, our of employees, while extending the opportunity for the children of employees framework. We
relationship with the SBEA is based also to contribute. also monitor the
on mutual respect and grievances
understanding. While the SBEA Ì “Yammer” social media platform to promote employee engagement in a more received through
engages in collective bargaining on informal setting. various channels
behalf of its members, the need for and seek out
Employees also have access to the following grievance reporting mechanisms;
a formal collective bargaining FRQȴUPDWLRQIURP
agreement has not arisen as both Ì Formal grievance procedure. respective
parties have continued to work employees to
Ì “HR Business Partner”, which creates a link between the Bank’s Management
closely to safeguard employee assess if they have
and branch teams and thereby acts as a key enabler to address concerns
interests as well as to achieve received a
raised by employees at a granular level.
corporate objectives. satisfactory
resolution.

Employee Relations Contd.

The Management works in Ì HR Hotline, a 24/7 call-in line which allows employees to directly connect with
collaboration with the SBEA to the HR Department.
exchange ideas for the Ì “Helping Hands - Counselling Cell”, an independent professional counselling
improvement of working conditions VHUYLFHWRR΍HUVXSSRUWWRHPSOR\HHVIDFLQJSHUVRQDOIDPLO\RUZRUNUHODWHG
and the health and safety of challenges.
employees.
The following initiatives have been implemented with the aim of further
strengthening the bond between the Bank and its employees;
Meanwhile, the HR Department also
continues to play a key role in Ì “Sampath Daru Daskam” event held once in every two years to recognise the
helping employees to manage aesthetic talents and achievements of our employees’ children.
changes arising from the Bank’s Ì “Rewards for Children of Team Sampath”, another programme held once in
digital transformation agenda. A every two years to reward employees’ children who have excelled in major
special communication team has public examinations, sports or have gained special recognition at the national
been established within the HR level during a given year.
Department for this purpose.
Ì “Sampath Rising STARS” programme to develop leadership skills of the children
Working closely with business units, of Team Sampath.
the HR communication team strives
to understand employee concerns. Ì “Sampath Nite” dinner dance for employees and their family.
Employee Engagement
In order to succeed in an increasingly competitive environment, it is vital Employees who are fully engaged and invested in the business are more
that our employees remain fully engaged in the Bank’s success. We committed and hence motivated to innovate and ideate for better results.
believe such employees are most likely to stay motivated; increasing our
overall productivity. Economic Environment People
high medium high

We have a planned We believe it is important to create a work environment where our team members feel that they are The feedback
approach focused on recognised for their talents and valued for their contribution to the Bank. We continue to invest received from
building strong considerable resources each year to provide our team members with an unparalleled range of team members
connections with our engagement opportunities, including; provides an
team members both indication with
individually and Ì “Sampath Service Awards” Long Service Awards, in appreciation of long serving employees. regard to the
collectively as Team Ì “Sampath STARS” (Special Thanks and Recognition Scheme) recognise employees for their H΍HFWLYHQHVVRI
Sampath, to ensure exemplary contribution and commitment to business, core values and various other spheres. our current
every member of our engagement
Ì Annual activity calendar of the Sampath Bank Sports Club to foster team spirit and camaraderie
team is deeply programmes
through various sports and recreation activities, including Sampath Nite - the entertainment
committed to the Bank’s evening of Sampath family, "Sampath Colours Nite" to nurture and support sports at all levels and areas which
core values and and recognise achievements of sports personnel of the Bank. require
purpose. improvements.
Ì Activities conducted through various other Clubs and Societies including the Buddhist
Association, the Photography Club, the Toastmasters Club and the Bank’s Welfare Society.
Ì Opportunity to volunteer for the Bank’s Corporate Social Responsibility initiatives.
Ì Women empowerment initiative to promote active discussion between Senior Corporate
0DQDJHPHQWPHPEHUVDQGIHPDOHHPSOR\HHVWRȴQGVROXWLRQVIRUSRVVLEOHFKDOOHQJHVIDFHGE\
them.
Ì Implementation of “Sampath Sashreeka” to encourage sustainable home gardening.

Employee Health and Safety GRI 403
Despite being a service organisation that poses minimal occupational Ensuring that our workforce is healthy both physically and mentally,
health and safety risks to its employees, Sampath Bank considers the improves the general wellbeing of the communities in which they live.
safety and wellbeing of its employees to be a top priority. The Bank
believes that a safe and secure work environment helps to earn the Economic Environment People
trust and loyalty of employees.
medium low high

We comply with all recommended 7RHQVXUHWKHKHDOWKDQGZHOOEHLQJRIRXUHPSOR\HHVDOOVWD΍DQGWKHLUIDPLOLHVDUH Injuries and

national safety regulations to ensure covered by a comprehensive medical scheme. Further, all employees are covered illnesses are
the safety of all persons (employees, by a personal accident insurance scheme. All employees also have access to annual monitored by
customers, suppliers and other medical screening facilities, while a Critical Illness Fund and Cancer Fund have been the HR
visitors) within the Bank premises. At established to provide assistance as needed. In addition, in the event of a death of Department.
the same time, the Bank’s an employee, his/her family is entitled to a Death Gratuity payment. At the same
Management works with a few time, the Bank continues to focus on raising awareness on the prevention of
cross-functional teams, including SBEA non-communicable diseases as well as undertaking various initiatives to promote
(Sampath Bank Employees’ healthy lifestyles and improve general wellness.
Association) to exchange ideas for the
improvement of working conditions Given the nature of our business, our employees are not exposed to occupational
and the health and safety of health risks. Hence, Sampath Bank does not have an occupational health and safety
employees. Fire Safety and Emergency management system or a dedicated committee for this purpose. However, following
Evacuation Drills are conducted the onset of the COVID-19 pandemic in 2020, the Bank established the COVID-19
annually, while safety trainings are Steering Committee to oversee the implementation of all recommended COVID
carried out on a planned basis as a safety protocols and encourage all employees to obtain necessary vaccinations. At
safety measure. present, COVID safety procedures continue to be reviewed periodically and
implemented as needed to safeguard the wellbeing of employees.
GRI 2-26/205
Anti-Corruption Practices
The legitimacy of our business as a Bank rests on our reputation for By conducting our business in line with the highest standard of ethics
acting with integrity at all times. Anti-corruption practices play a vital role and integrity, Sampath Bank contributes towards strengthening the
in achieving this objective. FUHGLELOLW\RI6UL/DQNDȇVȴQDQFLDOV\VWHPOHDGLQJWREHWWHUVRFLR
economic prospects for the country as a whole.
high low high

Anti-Corruption Practices Contd.

The Bank promotes a culture of honesty and fair dealing and The Board sets the tone from the top and leads by The planned
encourages employees to observe ethical business practices at example emulating the Code of Conduct and any policies schedule of
DOOWLPHVZLWKRXWDWWHPSWLQJWRLPSURSHUO\LQȵXHQFHRWKHUVRU and procedures contained therein including the Bank-wide
EHLQȵXHQFHGE\RWKHUV GLUHFWO\RULQGLUHFWO\ E\SD\LQJRU anti-bribery and corruption policies. Any employee whose compliance audits
accepting bribes or kickbacks in any form. Our Code of Conduct actions are found to be in violation of the Code of and the routine
for Employees outlines the Bank’s stance on fair dealing and Conduct or the ABC Policy/Gift Policy, are investigated internal audit
compliance, while the Code of Conduct for Corporate fully and dealt with summarily through appropriate procedures help
Management and the Code of Conduct and Governance disciplinary action. to determine if
Requirements for Directors create a foundation for the Bank’s code and policies
Management and Board of Directors to execute their duties In addition, the Bank’s Whistle Blowing Policy allows are being
ethically and in alignment with the Bank’s values. HPSOR\HHVWRUHSRUWSRWHQWLDOLUUHJXODULWLHVȴQDQFLDO enforced in
misappropriations and alleged incidents of bribery or practice.
The Code of Conduct makes special mention of our Anti- FRUUXSWLRQLQFRQȴGHQFHDQGZLWKRXWWKHULVNRIUHSULVDO Meanwhile, the
Bribery and Corruption (ABC) and the Policy on Accepting and As per the Whistle Blowing Policy, when a whistleblower Bank’s Whistle
Presenting of Gifts and Favours (Gift Policy) that prohibits any makes an allegation, an immediate investigation is Blowing Policy,
Bank employees from granting or accepting bribes/gifts/ launched into the alleged incident and the whistleblower also serves as an
facilitation payments to obtain any improper business or other is kept apprised of the progress at every stage of the important
DGYDQWDJH7KLVKLJKOLJKWVWKHVSHFLȴFFRPSOLDQFH investigation. mechanism to
requirements relating to these prohibitions and reinforces the determine any
Bank’s commitment to conducting business in line with the Raising awareness is a key part of enforcing Bank-wide loopholes that
highest level of honesty and integrity. Given that it is part of the adherence to these policies and procedures. In particular, exist in our overall
Code of Conduct, both the ABC and Gift Policies apply to all we have undertaken special measures to educate our policy framework
Bank employees without exception. In addition, it also applies employees including all Directors regarding money and in monitoring.
to non-controlled persons or entities who provide goods or ODXQGHULQJWHUURULVWȴQDQFLQJZKLFKZHIHHODUHVRPHRI
services under contracts such as suppliers, contractors and the areas that have the potential to give rise to bribery
service providers etc. DQGFRUUXSWLRQLQWKHEDQNLQJDQGȴQDQFLDOVHUYLFHV
industry.
Customer Convenience
*LYHQWKHVWL΍FRPSHWLWLRQLQWKHORFDOEDQNLQJLQGXVWU\GL΍HUHQWLDWLRQLV Creating new and more convenient ways for customers to do their
the key to gaining a competitive edge over peers. Customer convenience banking, drives economic activity and also helps to promote greater
LVRQHRIWKHPRVWLPSRUWDQWZD\VLQZKLFKGL΍HUHQWLDWLRQFDQEH ȴQDQFLDOLQFOXVLRQ0RUHRYHUGLJLWDOEDQNLQJVROXWLRQVDUHVLJQLȴFDQWO\
achieved in the banking business. more convenient while also being the more environmental friendly
option.
high high high

and Commitments
While striving to put the Our branch footprint too is structured to support our customer convenience We conduct regular customer
customer at the center LGHRORJ\&RQVLVWLQJRIIXOO\ȵHGJHGEUDQFKHVDFURVV6UL/DQNDRXUEUDQFK satisfaction surveys to determine their
of everything we do, we network is one of the most geographically dispersed branch network in the perceptions on how Sampath Bank is
aim to be known as the country. It is also the third largest network among local private banks. All our GL΍HUHQWLDWLQJLWVHOIWKURXJKLWV
benchmark for customer branches remain open during normal banking hours from 9.00 a.m. to products and services and compare
convenience in the local SPZKLOHVXSHUEUDQFKHVR΍HUEDQNLQJVHUYLFHVRQ6DWXUGD\VDVZHOO our overall customer value
banking industry. proposition in terms of the level of
convenience, accessibility and
D΍RUGDELOLW\HWF

Customer Convenience Contd.

As a multi-service bank, Our branch infrastructure includes; ATMs, Cash Deposit Machines, as well as a growing network of
RXUGLYHUVLȴHGOLQHRI Cheque Deposit Machines and Virtual Teller Machines. In addition, we maintain an island-wide
products and services QHWZRUNRIR΍VLWH$70V$WWKHVDPHWLPHZHLQYHVWLQWUDLQLQJRXUWHDPWRHQDEOHWKHPWR
are designed to serve provide our customers with a world-class banking experience.
GL΍HUHQWFDWHJRULHVRI
customers; individuals We are always looking for new and more innovative ways to give our customers a more convenient
or retail customers, banking experience. Accordingly, in recent years, we have been leveraging the rapid growth in
corporates, SMEs etc. In internet penetration levels across the country, to expand our suite of digital banking solutions.
each case, our aim is to Each year, we dedicate considerable resources to develop and deploy ever more convenient
GL΍HUHQWLDWHRXU digital solutions as well as to convert many of our traditional banking products into the digital
R΍HULQJVIURPSHHUVE\ IRUPDW$VSDUWRIWKLVH΍RUWZHKDYHEHJXQLQYHVWLQJLQFUHDWLQJGLJLWDOFHQWHUVDWRXUEUDQFKHVWR
helping our customers encourage more and more customers to migrate to digital banking solutions that are not only
PRUHHɝFLHQWDQGH΍HFWLYHEXWDOVRPRUHD΍RUGDEOHWRDOOFXVWRPHUVHJPHQWV2XUIXOO\ȵHGJHG
to make their banking
digital banking infrastructure, including the Sampath Vishwa online banking portal, the Vishwa
experience simple,
Corporate platform, the Sampath WePay virtual wallet and Sampath Cash Management Solutions
quick and convenient.
are all designed to present the ultimate in customer convenience.
$VSDUWRIRXURQJRLQJH΍RUWVWRLQWURGXFHEDQNLQJFRQYHQLHQFHWRPRUHDQGPRUH6UL/DQNDQV
we have also partnered with Dialog Axiata PLC to empower their island-wide network of
DJHQWVWRR΍HUEDVLFEDQNLQJVHUYLFHVWRUXUDOFRPPXQLWLHVDFURVVWKHFRXQWU\XQGHUWKHEUDQG
name of "eZ Banking".
Customer Health and Safety GRI 205-1/416
$VDVHUYLFHRUJDQLVDWLRQWKHȴQDQFLDOSURGXFWVDQGVHUYLFHVZHR΍HUGR :HEHOLHYHRXUSXUSRVHDVD%DQNLVWRHQVXUHWKDWWKHȴQDQFLDO
not cause any direct physical harm to customers who consume them. SURGXFWVDQGVHUYLFHVZHR΍HUDUHQRWXVHGLQWKHIXUWKHUDQFHRI
Nonetheless, we consider it our duty to ensure that our products and ȴQDQFLDOFULPHVXFKDVPRQH\ODXQGHULQJȴQDQFLQJRIWHUURULVPIUDXG
VHUYLFHVUHȵHFW6DPSDWK%DQNȇVFRPPLWPHQWWRHWKLFVDQGLQWHJULW\ and corruption activities that could potentially undermine the country’s
economic stability, or cause any damage to the environment or threaten
the wellbeing of communities.
high high high

and Commitments
Our approach is based on acting responsibly in As per the guidelines set out under the 7KH3URGXFW3ROLF\LPSRVHVVSHFLȴFUHVSRQVLELOLWLHV
HYHU\WKLQJZHGR:HUHPDLQȴUPO\FRPPLWWHGWR Product Policy, a comprehensive analysis on a given product owner and stipulates Annual and
ensuring that every one of our products and of each product is conducted prior to its Bi-annual product and service reviews which provide
services conform to the Board-approved Product release to the market, starting with assurance to the customer that they are receiving the
Policy, setting out clear guidelines for product design, where all products are vetted by EHQHȴWVSURPLVHGE\WKH%DQN
design, development and deployment in the Screening Committee, which takes
compliance with all applicable laws and regulations into consideration such matters as Moreover, the Compliance Department maintains a
for licensed commercial banks, including; the social, environmental implications as well comprehensive monitoring framework to monitor
guideline on Money Laundering & Terrorist as the legality of the product. adherence to internal anti-money laundering policies
Financing Risk Management for Financial DQGSURFHGXUHVZKLOHWKHPDQGDWRU\VLJQR΍RIWKH
Institutions No. 01 of 2018, the Financial pre-credit evaluation team and where appropriate,
Institutions (Customer Due Diligence) Rules No. 01 additional approval of the Risk Management Unit
of 2016 and the Financial Transaction Reporting (RMU) is sought prior to disbursement of lending
Act No. 06 of 2006. facilities.

Customer Health and Safety Contd.

and Commitments
In addition, the Bank’s Credit Policy sets out Furthermore, we apply rigorous pre-credit The Risk and Control Self-Assessment (RCSA)
clear guidelines to support sustainable lending evaluation to determine the viability of each process is carried out annually by the RMU to
activities. The Credit Policy, which has been individual loan application, including stringent highlight areas for improvement. The Bank’s
developed on par with global best practices, also due diligence protocols to validate customer Whistle Blowing Policy, which allows employees
references the IFC (International Finance credentials. We also invest in training to ensure to anonymously report potential irregularities or
Corporation) Exclusion list to specify the types of RXUVWD΍DUHZHOODZDUHRIWKHSROLFLHVDQG ȴQDQFLDOPLVDSSURSULDWLRQVLVDQRWKHULPSRUWDQW
projects/businesses that the Bank will refrain procedures as well as the latest developments channel to identify any loopholes that exist in our
from lending to. and industry best practices with regard to the overall policy framework.
SUHYHQWLRQRIȴQDQFLDOFULPH
Sales Promotions, Marketing Communications and Information Availability on the Bank’s Products and Services GRI 417,417-1
Our Sales Promotion and Marketing Communication activities are an Every one of our campaigns are unique and designed to improve
important part of how we connect with our customers. It also serves as visibility and raise awareness about our products and services to enable
DKLJKO\H΍HFWLYHPHGLXPWRVKRZFDVHRXUVWUHQJWKDQGWKHUHE\ individuals and corporations to make informed decisions regarding the
GL΍HUHQWLDWHRXUYDOXHSURSRVLWLRQIURPWKDWRISHHUV most appropriate banking solutions for their precise needs.
medium medium high

and Commitments
Our aim is to deliver a fair, To execute this commitment, we ensure that all our product The Customer Experience Surveys
honest and equitable service to promotions, sales and marketing communications are consistent with together with the Brand Health
our customers and in doing so, legal and regulatory frameworks and other best practices in the local Studies conducted at regular
ensure that their interests are banking industry. As such, we ensure that all our promotional material intervals provide an opportunity to
protected throughout their and customer communications comply with all applicable regulatory obtain direct feedback from
relationship with us. While the requirements including the guidelines for the protection of customer customers regarding the
design, layout and chosen rights as stipulated in the Customer Charter for Licensed Commercial H΍HFWLYHQHVVRIRXU6DOHV3URPRWLRQ
medium of our campaigns may Banks in Sri Lanka. Furthermore, we take into consideration the rules and Marketing Communication
vary depending on our tactical of institutions such as Visa and Mastercard with whom we have materials. The number of customer
marketing strategies, Sampath ongoing partnerships and respect generally accepted ethical rules, queries/complaints received
Bank’s commitment to provide industry norms practiced by the local banking industry. regarding the clarity and
all customers with adequate, transparency of our advertising
timely and relevant information In addition, we invest in regular product training initiatives to ensure all campaigns also serves as a good
to enable them to make front line employees are kept informed regarding new disclosure indicator of the success of our
informed decisions, remains requirements that may become relevant from time to time for certain campaigns.
unchanged. banking products or services.
Customer Privacy GRI 418
To carry out the business of lending and mobilising deposits, it is vital Violation of customer privacy can have serious negative consequences
that we gain the trust of our customers. Our ability to protect for the Bank. The breach of trust can potentially damage the Bank’s
FRQȴGHQWLDOFXVWRPHULQIRUPDWLRQDQGVDIHJXDUGFXVWRPHUSULYDF\LV UHSXWDWLRQLQWXUQD΍HFWLQJFXVWRPHUFRQȴGHQFHDQGWKUHDWHQLQJWKH
one of the most important ways in which this is achieved. long term growth prospects of the Bank.
high low medium

Customer Privacy Contd.

We consider the With large volumes of customer information collected within each business day, our Ì Number of
customers’ willingness to approach to customer privacy is based on creating a secure internal environment where customer
share personal information DOOFXVWRPHULQIRUPDWLRQLVWUHDWHGZLWKXWPRVWUHVSHFWDQGFRQȴGHQWLDOLW\$FFRUGLQJO\ complaints
as a sign of trust in the information obtained at the time of customer on-boarding, including through the KYC regarding breach of
Bank and as such, remain (Know-Your-Customer) as well as information about the customer’s internal transactions FRQȴGHQWLDO
fully committed to respect history, are all archived in the Bank’s digital information vaults which have several layers customer data,
the privacy rights of of inbuilt security and access controls. measured in terms
customers at all times. of number of ILEDR
Furthermore, any information deemed sensitive is transmitted via secure channels and
As per the guidelines for (Internal Loss Event
then stored in the Bank’s databases, with such information made accessible to only
the protection of customer Data Reporting)
authorised persons.
rights stipulated under the during the year.
Customer Charter for Numerous other safeguards are also in place. These include;
Ì Number of
Licensed Commercial
Ì 7KHFXVWRPHUYHULȴFDWLRQSURFHGXUHE\WKH&XVWRPHU&DUH&HQWUHZKLFKLVWDVNHG incidents of security
Banks in Sri Lanka,
ZLWKFRQGXFWLQJVHYHUDOOD\HUVRISRVLWLYHLGHQWLȴFDWLRQEHIRUHDVVLVWLQJFOLHQWVZLWK breaches reported
Sampath Bank does not
their needs. to the Incident
disclose customer
Response Team.
information to third Ì 0RQLWRULQJRI$70VWRLGHQWLI\DWWHPSWVRIȴ[LQJFDUGGDWD3Ζ1VNLPPLQJGHYLFHV
parties, unless otherwise Ì Number of
compelled by law. Annual security awareness programmes are conducted to raise awareness among all complaints received
VWD΍UHJDUGLQJWKHLPSRUWDQFHRISURWHFWLQJFRQȴGHQWLDOFXVWRPHULQIRUPDWLRQ by the Customer
Following the enactment of ΖQDGGLWLRQPXOWLOHYHOVHFXULW\YHULȴFDWLRQSURWRFROVKDYHEHHQLPSOHPHQWHGDFURVV Care Centre.
the Personal Data most of the online channels to ensure the security of account information and related
Protection Act No. 9 of details. As part of our ongoing online safety enhancement measures, the OTP (One-
2022 in March 2022, the Time-Password) has been introduced for Sampath Vishwa personal banking users.
Bank appointed a
dedicated Data Protection Meanwhile, the Bank’s corporate website contains an updated Privacy Policy that
2ɝFHUWRRYHUVHHWKH RXWOLQHVRXUDSSURDFKWRFROOHFWLRQDQGXVHRIWKHLU3HUVRQDOΖGHQWLȴFDWLRQΖQIRUPDWLRQ
implementation of the (PII) in compliance with the Personal Data Protection Act No. 9 of 2022.
provisions of the act in
We also conduct regular awareness campaigns through SMS, corporate website and
compliance with the
social media to remind our customers to be mindful about protecting their personal
stipulated timelines.
information, PIN, ATM and credit card details from being misused.
Complaint Management GRI 418
:HEHOLHYHWKDWH΍HFWLYHFRPSODLQWUHVROXWLRQLVDNH\PHDVXUHPHQWRI 3URYLGLQJTXLFNDQGH΍HFWLYHUHVROXWLRQWRFRPSODLQWVEXLOGVFXVWRPHU
customer satisfaction. Our endeavour to provide the best-in-class FRQȴGHQFHDQGLQFUHDVHVFXVWRPHUOR\DOW\WRZDUGVWKH%DQNWKHUHE\
customer experience, therefore includes the prompt resolution of creating a platform for more sustained growth over time. Customer
complaints raised by customers. complaints also serve as an important learning tool that helps to
FRQWLQXRXVO\UHȴQHDQGH[SDQGRXUSURGXFWVDQGVHUYLFHVWREHWWHU
serve the evolving needs of various customer segments and also
support the creation of more environmental-friendly solutions.
high high high

Complaint Management Contd.

and Commitments
At Sampath Bank, we consider Complaints received from all sources are captured The progress of complaint resolution is tracked
all complaints equally centrally through the Complaint Handling System (CHS) through the system with unresolved complaints
important and work towards maintained under the purview of the Customer Care exceeding the target response times being
R΍HULQJDVSHHG\\HWFUHGLEOH Center. All complaints recorded on the CHS are escalated escalated to the respective supervisory authorities
solution to ensure the automatically to the respective complaint owner who is for necessary action.
FXVWRPHULVVDWLVȴHGWKDWKLV typically the relevant authority in charge of the area.
her issue is resolved. We have Accordingly, for each and every complaint received, the Before a complaint loop is closed, the Customer
provided our customers a recipient of the complaint is required to activate a Care Centre will ensure that the customer matter
wide range of channels to complaint loop by raising a CCER (Customer Complaint is resolved through respective stakeholders.
voice their complaints. These Event Reporting) through the system. The relevant
include; mail, e-mail, FRPSODLQWRZQHULVLPPHGLDWHO\QRWLȴHGRIWKH&&(5YLD The CHS provides a range of complaint analysis
telephone, online through the the system. The complaint owner is required to take dashboards, with special focus on highlighting
chat facility on our corporate appropriate action to resolve the complaint within the recurring complaints. Data on recurring
website and through social stipulated response times. complaints are escalated to the respective line
media platforms. Alternatively, management for their recommendations for
customers are also welcome Complaints received via social media platforms are appropriate policy/procedural changes. This
to walk into any branch to compiled by our Social Media Agency and sent to the approach is aimed at generating a year-on-year
make a complaint. Customer Care Center for recording and resolution reduction in the number of recurring complaints
through the CHS. over time.
Research and Development
We are always looking for new and more innovative ways to serve our R&D is an important tool that allows the Bank to identify customer
customers by catering to their diverse needs in a more holistic manner. needs, understand market trends and keep abreast of the latest
Research and Development (R&D) is the key lever that helps us to developments in the global banking sphere. These insights have proven
achieve this objective. WREHLQYDOXDEOHLQVXSSRUWLQJWKH%DQNȇVH΍RUWVWRGHOLYHUHFRQRPLFDOO\
viable, environmental-friendly and socially relevant products and
services.
high medium high

At Sampath Bank, R&D Our research activities are three fold; The market
is a continuous and Ì Market Research to identify how customer needs are evolving in order to realign our product uptake for new
ongoing process and a portfolio accordingly. The decision to conduct market research lies with the Bank’s Marketing products and
VLJQLȴFDQWDOORFDWLRQ Department. If there is a need for market research, the Marketing Department will usually digital solutions
from the annual budget commission an independent third party to carry out the desired activities. provide a clear
is made to ensure indication of how
adequate resources are Ì Decide on the need for product rationalisation based on the performance, relevance successful our
available for all and life cycle of existing products. 5 'H΍RUWVDUH
Sampath Bank R&D
Ì Test the market prior to the launch of a new product or service.
requirements.
Ì Scope out the market for new products/services.
Ì Determine opportunities to tap into new customer segments.

Research and Development Contd.

Ì Product Research conducted by the Bank’s in-house IT Department focuses on

understanding how the latest digital banking trends can be adapted to develop new digital
VROXWLRQVWKDWFDQJLYH6DPSDWK%DQNȴUVWPRYHUDGYDQWDJHDFURVVDOONH\FXVWRPHU
segments. More recently, we have also begun using advanced data analytics to study and
PDSFXVWRPHUEHKDYLRXUΖQWXUQZHXVHWKHVHȴQGLQJVWRIHHGRXULQQRYDWLRQSURFHVVHV
and help create products and services that cater to the precise needs of our customers. Our
Market Research activities also provide valuable insights regarding the potential for new
products and markets etc.
Ì Product Lifecycle Management (PLM) involving routine research to determine the social
relevance of the Bank’s products and services. The PLM process is managed under the
stewardship of the Product Rationalisation Committee, a management level committee
FKDUJHGZLWKRYHUVHHLQJWKHFRQWLQXRXVLPSURYHPHQWRIWKH%DQNȇVSURGXFWEDVNHWWRUHȵHFW
the current demands of customers.
Financial Inclusion Agenda GRI 2-6
As a leading commercial bank in the country, Sampath Bank is ideally By encouraging underbanked and unbanked communities across Sri
positioned to pave the way for more and more Sri Lankans to move Lanka to adopt formal banking practices and use established channels
towards formal banking channels. Our Financial Inclusion Agenda is the and also by motivating more people and businesses around the country
key enabler in achieving this objective. to use a wider range of banking services, we hope to reduce poverty and
increase prosperity over time.
high low high

Our commitment to Our Agency Channel (eZ Banking agent network) is the main driver in Sampath Bank’s endeavour The success of our
SURPRWHȴQDQFLDO WRSURPRWHȴQDQFLDOLQFOXVLRQ$FFHVVWRWKHH=%DQNLQJQHWZRUNLVPDGHSRVVLEOHWKURXJKD approach can be
inclusion is based on a partnership between Sampath Bank and Dialog Axiata PLC. eZ Banking agents are appointed by measured by the
combined approach WKH%DQNDQGDXWKRULVHGWRR΍HUEDVLFEDQNLQJVHUYLFHVDQGLQWKLVZD\VHUYHDVDYLWDOOLQNWR number of Micro,
encompassing enable grass root level communities to access formal banking channels. Agents are typically small Small and Medium
tailor-made products, business owners in the community, often the proprietor of a local communication shop, grocery, Entrepreneurs
customised distribution minimart, hardware etc. (MSMEs) groomed
channels and special under the
The Bank’s digital banking channels, including the Sampath Vishwa and WePay mobile apps have
customer education. “Sampath Saviya”
DOVRSURYHQWREHDNH\SODWIRUPIRUSURPRWLQJJUHDWHUȴQDQFLDOLQFOXVLRQDPRQJSRWHQWLDO
programme as well
customers.
as the number of
ΖPSURYLQJȴQDQFLDOOLWHUDF\DPRQJJUDVVURRWOHYHOFRPPXQLWLHVLVDOVRDPDMRUSULRULW\XQGHURXU banking
)LQDQFLDOΖQFOXVLRQ$JHQGD2XUȴQDQFLDOOLWHUDF\SURJUDPPHVHULHVȊ6DPSDWK6DYL\DȋLVDQ transactions
RQJRLQJLQLWLDWLYHWKDWKDVEHHQLQSODFHIRUWKHSDVW\HDUVΖWLVDFDSDFLW\EXLOGLQJH΍RUWWKDW routed through
targets Micro, Small and Medium Scale Entrepreneurs (MSMEs). In addition to building their the eZ Banking
ȴQDQFLDOOLWHUDF\VNLOOVYLDWKHSURJUDPPHVHULHVZHDOVRZRUNWRGHYHORSWKHVHHQWUHSUHQHXUV channel.
and potential entrepreneurs and raise them to a standard where they have the credentials to
VHHNȴQDQFLDODVVLVWDQFHIURPIRUPDOEDQNLQJFKDQQHOV7KHQH[WVWHSLVWRR΍HUWKHPDSSURSULDWH
ȴQDQFLDOVROXWLRQVWRHQVXUHWKHVHWDUJHWJURXSVKDYHDFFHVVWRTXDOLW\ȴQDQFLDOSURGXFWVDQG
services at a fair price.

Financial Inclusion Agenda Contd.

Management Key Actions Evaluation
Strategy and and Reporting
Commitments
Over the years, the “Sampath Saviya” programme has evolved with several of the recent programmes focused Similarly, the
RQHQFRXUDJLQJ\RXWKZRPHQDQGEXGGLQJHQWUHSUHQHXUVWRHPEUDFHȴQDQFLDOLQGHSHQGHQFHDQGEHFRPH number of
productive members of society. In this manner, the “Sampath Saviya” initiative demonstrates Sampath Bank’s accounts
H΍RUWVWRVXSSRUWWKHDFKLHYHPHQWRIWKH8QLWHG1DWLRQV6XVWDLQDEOH'HYHORSPHQW*RDO 1R3RYHUW\ *RDO opened to
(Decent Work and Economic Growth) and Goal 10 (Reduced Inequalities). suppliers
annually serves
$VSDUWRIRXURYHUDOODSSURDFKLQSURPRWLQJȴQDQFLDOLQFOXVLRQZHHQFRXUDJHRXUPLFURDQGVPDOOVFDOH
as a good
VXSSOLHUVWRDGRSWPDLQVWUHDPEDQNLQJFKDQQHOVΖQRXUH΍RUWVWRSURPRWHȴQDQFLDOLQFOXVLRQZHHQJDJHZLWK
indicator of the
RXUORFDOVXSSOLHUVDQGVHUYLFHSURYLGHUVWRKHOSWKHPGHULYHWKHEHQHȴWVRIIRUPDOEDQNLQJ
success of our
As such, we have included a clause in our Procurement Policy, making it mandatory for all new suppliers to H΍RUWVWR
open a Sampath Bank account. In the year 2022, the Bank leveraged its partnership with Paycorp International promote
3YW /LPLWHGWREHFRPHWKHȴUVWORFDOEDQNWRHQDEOHVPDOOEXVLQHVVHVWRUHFHLYHSD\PHQWVXVLQJDQ\/DQND45 ȴQDQFLDO
enabled apps and digital wallets. In parallel, the Bank tied up with UnionPay International ™ (UPI) to facilitate inclusion
e-commerce transactions by establishing direct connectivity to UPI’s secure payment gateway and payment among our
aggregator services. suppliers.
$OVRLQWKH\HDUWKH%DQNFRPPHQFHGLPSOHPHQWLQJDIXOO\ȵHGJHG3URFXUHWR3D\ 33 V\VWHPZKLFK

once completed would integrate purchasing and accounts payable systems to further reinforce the principles
RIȴQDQFLDOLQFOXVLYLW\DPRQJWKHVXSSOLHUEDVH
Number of Registered Suppliers and Service Providers
Department Number
Engineering 347
Logistics 149
IT 197
Marketing 52
Total 745
Our supply chain consists of over 700 such local suppliers who cater to the needs of the Bank in various areas
across the island. All suppliers are on-boarded through the Supplier Registry maintained by the Bank. The
Supplier Registry includes a minimum of two suppliers for each supplier category, while a minimum of three
suppliers are maintained to minimise the disruptions of critically important supplies and services. Under the
supervision of the procurement function, the Supplier Registry is updated every three years. This gives an
opportunity to all new suppliers to register with the Bank, while existing suppliers are also expected to
re-register at this point. Selecting suppliers from the Supplier Registry is done through a tender procedure that
creates a healthy level of competition and secrecy, where all applicants are considered on an equal basis. The
Bank’s Procurement Committee is responsible for the screening and selection of suitable suppliers/service
SURYLGHUVDSURFHVVWKDWDOORZVXVWRDVVHVVDQGPLQLPLVHWKHULVNVLQYROYHGLQSXUFKDVLQJIURPGL΍HUHQW
sources. The Procurement Committee adopts a broad-based approach to select suppliers with due
consideration to the supply chain risk and emerging trends. (Supplier Evaluation Model is shown on page 131
of this Report). In light of the COVID-19 pandemic environment in the year 2021, the Procurement Committee
further strengthened the supplier selection process with the inclusion of additional evaluation criteria
UHTXHVWLQJVXSSOLHUVWRSURYLGHQHFHVVDU\FHUWLȴFDWLRQVIURPUHVSHFWLYHJRYHUQLQJERGLHVFRQȴUPLQJWKHLU
SURGXFWVFRQIRUPWRDOOUHOHYDQWUHJXODWRU\VWDQGDUGV0RUHRYHULQDQH΍RUWWREHQFKPDUNWKH%DQNȇV
SURFXUHPHQWIUDPHZRUNDJDLQVWWKHJOREDOEHVWSUDFWLFHVD&KLHI3URFXUHPHQW2ɝFHU &32 ZDVDSSRLQWHG
ZLWKH΍HFWIURPVW$SULO7KH&32ZKRIXQFWLRQVDVDQLQGHSHQGHQWHYDOXDWRULVUHVSRQVLEOHIRU
reviewing all procurement proposals prior to submission to the Procurement Committee for necessary
approvals.

Community Development GRI 413
To demonstrate our commitment to the country and its people, we want Investing communities helps to uplift the lives of socially and
WRSOD\DUHVSRQVLEOHUROHLQVHUYLQJWKHFRPPXQLW\E\ȴQGLQJPHDQLQJIXO economically disadvantaged communities across Sri Lanka and
solutions to address the root cause of community issues. empowers them to raise their socio-economic status and move out of
poverty and become key catalysts in the nation’s economic development.
high medium high

We aim to tackle Sri Lanka’s emerging socio- To ensure we undertake the right projects that contribute towards As part of the
economic challenges by investing in solutions that achieving the aforementioned objectives, we rely on our Strategic PMEP, a social
can deliver meaningful long term change for Sustainability Framework to look through a 3600 lens. This is accomplished impact assessment
JUDVVURRWOHYHOFRPPXQLWLHVΖQDQH΍RUWWR through a comprehensive Project Management and Evaluation Process is carried out at the
empower these communities and give them the (PMEP) where each project is carefully scrutinised. [Refer pages 49 and 50
conclusion of each
tools they need to become architects of their own for more details on the Project Management and Evaluation Process
community
success, Sampath Bank has adopted a Socially (PMEP) operational framework.]
development
Responsive CSR Model to focus more deeply on The PMEP is managed by the Corporate Sustainability Department (CSD). project to
Corporate Sustainability, rather than mere CSR. The CSD is further responsible for providing oversight for implementation, determine its
Through our Socially Responsive CSR Model, we completion and continuity of these projects. Stakeholder engagement H΍HFWLYHQHVVLQ
are looking to achieve the following key activities and strategic partnerships also come under the purview of the
meeting project
objectives: CSD. Employee volunteerism is a key component of the overall project
execution. objectiveness. The
CSD carries out the
Ì Contribute towards resolving key national Investment decisions on CSR programmes are under the purview of the social impact
issues. Sustainability Committee led by the Managing Director. All projects assessment by
Support the socio-economic progress of undertaken are within the Board-approved annual CSR budget allocation
Ì engaging with direct
devoted to carrying out the Bank’s sustainability agenda. Project-wise
Sri Lanka. EHQHȴFLDULHVDQG
resources are determined based on the scope and scale of each project,
LWVLPSDFWVSHFLȴFREMHFWLYHVDQGWLPHIUDPH6SHFLDOHPSKDVLVLVSODFHG other interest
Ì 3URYLGHVLJQLȴFDQWVXVWDLQDEOHVROXWLRQVWKDW
on the allocation of non-monetary resources such as external expertise groups within the
address the root cause of socio economic
challenges faced by communities. and value adding partnerships to maximise the overall impact of each community to
initiative. obtain their
Ì Promote sustainable value creation. feedback regarding
The Bank also continues to encourage team members to embrace the
the concluded
Ì Promote stakeholder engagement among %DQNȇV&65YDOXHVE\YROXQWHHULQJWKHLUWLPHDQGH΍RUWWRZDUGVWKH
community groups. execution of the Bank’s CSR activities. Employee volunteerism of this project. The insights
nature is facilitated through the tripartite commitment between the Bank, gained through this
Ì Serve the United Nations 2030 Sustainable its employees and the community. It is hoped that this mechanism will process are used as
Development Goals, in particular Goal 1 (No create a platform for the Bank to leverage employee skills to contribute lessons learned to
Poverty), Goal 2 (Zero Hunger), Goal 3 (Good positively towards the community, while encouraging team members to improve future
Health and Wellbeing), Goal 4 (Quality forge stronger relationships with communities and act as community undertakings.
Education), Goal 5 (Gender Equality), Goal 6 ambassadors on behalf of the Bank.
(Clean Water and Sanitation), Goal 8 (Decent
7RIXUWKHUVXSSRUWWKHVHH΍RUWVWKH%DQNȇV6XVWDLQDELOLW\7HDPSURFHHGHG
Work and Economic Growth), Goal 10
to develop a set of clear policy guidelines and related procedures to raise
(Reduced Inequalities), Goal 13 (Climate
awareness among team members regarding the Bank’s CSR philosophy.
Action) and Goal 15 (Life on Land), Goal 17
(Partnerships for the Goals). In addition to our structured community interventions, we are always
proactive in our emergency response to any national crisis. In the event of
Refer page 48 of this report for the Socially an emergency, we do not hesitate to meet the need of the hour and are
Responsive CSR Model. DOZD\VUHDG\WRVXSSRUWD΍HFWHGFRPPXQLWLHVΖQVXFKFDVHVUDSLG
response teams are deployed to act quickly to bring relief to where it is
needed the most.

Environmental Protection and Conservation GRI 302/305
As a bank, our business has a very little direct impact on the Environmental friendly business practices contribute directly towards
environment. However, as our operating environment becomes more mitigating the impact of climate change and also facilitate sustainable
dynamic and competitive, the steps we as an organisation take towards value creation across economic and social spheres.
the protection and conservation of the natural environment, will provide
a clear competitive edge.
high high high
Management Key Actions Evaluation and

Strategy and Reporting
Commitments
We aim to be a 7DNLQJLQWRFRQVLGHUDWLRQWKHQDWXUHRIRXUEXVLQHVVDVDEDQNRXUH΍RUWVIRFXVRQWKH Percentage of

responsible following aspects; Transactions Performed
environmental Digitally is a good
1. 5HVRXUFHH΍FLHQF\ Sampath Bank is determined to responsibly manage the
steward and strive indicator to determine
environmental and social risks associated with its operations in order to minimise the
to minimise the the success of our
negative impacts on the environment and its stakeholders.
impact that our resource management
business may have Energy Management approach, while the
on the environment. annual GHG emissions
Ì (QHUJ\HɝFLHQF\WKURXJKHQHUJ\HɝFLHQWOLJKWLQJVROXWLRQVDQGDOWHUQDWLYHHQHUJ\
To support our inventory report also
VRXUFHV6LQFHȴUVWODXQFKLQJRXUVRODUPLJUDWLRQSURMHFWLQZHKDYHVLQFHLQYHVWHG
H΍RUWVZHKDYH serves as a valuable
in rooftop solar systems for several of our branches. At present, energy requirements of
developed a yardstick to measure the
these are met through rooftop solar energy systems installed at these branches. In
management RYHUDOOH΍HFWLYHQHVVRI
addition, over the years, we have progressively increased our investment in energy
approved resource utilisation
HɝFLHQWHTXLSPHQW
Environmental and practices.
Social Management GHG Management
System (ESMS) in Ì Measuring direct and indirect emissions (Carbon Footprint calculation) using the GHG In addition, we also
line with (Greenhouse Gas) Protocol to track the Bank’s environmental performance and conduct an annual
internationally benchmark our progress against our peers in the industry. We believe that it is important FRVWEHQHȴWDQDO\VLVWR
accepted best to measure the GHG emissions associated with the Bank’s operations on an annual basis, determine the savings
practices. The in order to be able to continuously improve our carbon management strategy by pursuing derived from the
overarching new opportunities for carbon reduction. To support this, Sampath Bank has been reduction of paper
objectives of the preparing an annual GHG emissions inventory report. waste owing to the
ESMS include; increased use of digital
understanding and Water Management platforms within the
addressing the Ì Though water is used primarily for the utility and sanitisation requirements of our Bank and also by our
environmental and employees and customers who visit our branches, the Bank considers water management customers.
social risks across DOVRDVDQLPSRUWDQWSDUWRIRXUH΍RUWVWRUHGXFH6DPSDWK%DQNȇVHQYLURQPHQWDO
every aspect of our footprint. Water used for these purposes are supplied from the municipal sources. With The number of loans
core business and no harmful substances contaminating the water used, all waste water is released to the disbursed under Green
integrating public drainage system. Despite the limited use of water, we continuously monitor water Lending Schemes during
environmental usage and measure consumption on a monthly basis. Wherever possible and practical, we the year is another
considerations into have also invested in appropriate technology to prevent wastage and also conduct regular important indicator that
our day-to-day awareness programmes to encourage employees to conserve water. demonstrates the
decision making and success of our
risk assessment Waste Management
Sustainable Financing
processes. Ì Practicing responsible waste management principles whenever possible and practical. As Strategies.
a bank, waste generated throughout operations comprises paper waste, e-waste and
food waste. We make sure all waste is segregated, and that segregated waste is collected
We also measure the
separately and disposed of responsibly. Biodegradable waste is handed over to municipal
impact of our external
sources for disposal, while the Bank has tied up with a registered recycling partner to
initiatives over time to
ensure paper and e-waste is recycled responsibly. Process automation and digitalisation
evaluate if our
DOVRIRUPVDQLPSRUWDQWSDUWRIRXURYHUDOOH΍RUWWRORZHUSDSHUFRQVXPSWLRQDQG
environmental CSR
thereby reduce the resulting volume of paper waste. Since embarking on this digitalisation
projects are achieving
journey, we have set an ambitious goal targeting an annual reduction in paper waste.
their intended objectives.

Environmental Protection and Conservation Contd.
Management Key Actions Evaluation and

Strategy and Reporting
Commitments
2. Responsible lending - 3ULRULWLVHWKHȴQDQFLQJRIUHQHZDEOHDQGFOHDQHQHUJ\WHFKQRORJ\

projects. Having long understood the importance of increasing clean energy generation to
replace the country’s need for non-renewable fossil fuels, we have made Non-
&RQYHQWLRQDO5HQHZDEOH(QHUJ\ 1&5( ȴQDQFLQJDSULRULW\DUHDLQRXUFRUHOHQGLQJ
EXVLQHVV%\SULRULWLVLQJ1&5(ȴQDQFLQJ6DPSDWK%DQNKDVEXLOWXSDUHSXWDWLRQDVD
OHDGLQJȴQDQFLHULQWKHFRXQWU\IRUUHQHZDEOHHQHUJ\ΖQ6DPSDWK%DQNEHFDPH
RQHRIWKHȴUVWVLJQDWRULHVRIWKH6UL/DQND%DQNVȇ$VVRFLDWLRQ 6/%$ OHG6XVWDLQDEOH
Banking Initiative. Since then, we have been working purposefully to become Sri Lanka’s
ȴUVWIXOO\VXVWDLQDEOHȊ*UHHQ%DQNȇȇDQGKDYHDGRSWHGDWZRSURQJHGDSSURDFKWRDFKLHYH
this goal;
Ì Promote large scale specialised NCRE projects that can make a sizable contribution to the
national electricity grid.
Ì Assist local industries and domestic households to invest in rooftop solar energy
generation in order to reduce their dependence on the national electricity grid.
:HDGKHUHWRLQWHUQDWLRQDOEHVWULVNPDQDJHPHQWSUDFWLFHVZKHQȴQDQFLQJWKHVHSULYDWH
sector projects and demand high environmental and social risk management standards
from our clients. In this regard, our credit policy dictates that loan approvals be granted on
condition that the project/activity is in compliance with the environmental and social
standards set by the Central Environmental Authority (CEA) of Sri Lanka.
3. Green products and services and paperless operations - In recent years, we have
undertaken to move as many of our products and services as possible to digital platforms
and have also been working to automate many of our internal work streams/processes.
Consequently, the need for paper usage in each internal process has been substantially
UHGXFHGLQWXUQFRQWULEXWLQJWRDVLJQLȴFDQWUHGXFWLRQLQRYHUDOOSDSHUXVDJHLQRXUGD\WR
day operations, thereby also lowering the energy requirements and emissions.
4. Special projects - Invest in impactful environmental protection, reforestation and

biodiversity conservation projects. In this regard, we often seek out partnerships that can
substantially add value to our direct environmental protection and conservation projects.
(Refer pages 132 to 147 of the Natural Capital report for some of the notable achievements
during the year 2022).

GRI CONTENT INDEX
Statement of use Sampath Bank PLC has reported in accordance with the GRI Standards for the period [From 01.01.2022 to 31.12.2022].
GRI 1 used GRI 1: Foundation 2021
GRI STANDARD/ DISCLOSURE LOCATION OMISSION
OTHER SOURCE REQUIREMENT(S) REASON EXPLANATION

OMITTED
General Disclosures
GRI 2: General 2-1 Organizational details 10-13,160,519 - - -

Disclosures 2021 2-2 Entities included in the 164-165 - - -
organization’s sustainability
reporting
2-3 Reporting period, frequency and 4,7 - - -
contact point
2-4 Restatements of information 4, Refer Note 01 - - -
2-5 External assurance 7 - - -
2-6 Activities, value chain and other 10-13,14,16-17,20-23,35-41, - - -
business relationships 56-57,90,492-493
2-7 Employees 113 - - -
2-8 Workers who are not employees 113 - - -
2-9 Governance structure and 48-49,175-178,180-185,451 - - -
composition
2-10 Nomination and selection of the 174,196-197,453 - - -
highest governance body
2-11 Chair of the highest governance body 31-33,182-185,451 - - -
2-12 Role of the highest governance body 48-49,171-174,432,442,447-448, - - -
in overseeing the management of 464
impacts
2-13 Delegation of responsibility for 48-49,180-181 - - -
managing impacts
2-14 Role of the highest governance body 48-49,448-449,460,464 - - -
in sustainability reporting
&RQȵLFWVRILQWHUHVW 174,201-202,427, 433-434, - - -
443,445,448,460-461
2-16 Communication of critical concerns 48-50,441,456-457,465, - - -
Refer Note 02
2-17 Collective knowledge of the highest 48-49,178,450,453,464 - - -
governance body
2-18 Evaluation of the performance of the 48-49,177,453-455,464 - - -
highest governance body
2-19 Remuneration policies 194-195,441,445-446,455-456 - - -
2-20 Process to determine remuneration 194-195,441-442,455 - - -
2-21 Annual total compensation ratio * - - -
2-22 Statement on sustainable 31-33 - - -
development strategy
2-23 Policy commitments 432,461 - - -
2-24 Embedding policy commitments 180-181,190-202,203,204-217 - - -
ΖQIRUPDWLRQFDQQRWEHGLVFORVHGGXHWRFRQȴGHQWLDOLW\UHDVRQV

GRI CONTENT INDEX

OMITTED
General Disclosures
2-25 Processes to remediate negative 7,50 - - -
impacts
2-26 Mechanisms for seeking advice and 173,486-487 - - -
raising concerns
2-27 Compliance with laws and regulations 203 - - -
2-28 Membership associations 63 - - -
2-29 Approach to stakeholder engagement 62-69 - - -
2-30 Collective bargaining agreements Refer Note 03 - - -
Material Topics
GRI 3: Material Topics 3-1 Process to determine material topics 5,58 - - -
2021 3-2 List of material topics 59-61, Refer Note 04 - - -
Economic Performance
GRI 3: Material Topics 3-3 Management of material topics 3URȴWDELOLW\DQGȴQDQFLDO - - -
2021 stability)
GRI 201: Economic 201-1 Direct economic value generated and 430 - - -
Performance 2016 distributed
201-2 Financial implications and other risks Refer Note 05 - - -
and opportunities due to climate
change
'HȴQHGEHQHȴWSODQREOLJDWLRQVDQG 256,277-279 - - -
other retirement plans
201-4 Financial assistance received from Refer Note 06 - - -
government
Market Presence
GRI 3: Material Topics 3-3 Management of material topics 58,478-479 (Physical channels) - - -
2021
GRI 202: Market 202-1 Ratios of standard entry level wage by Refer Note 07 - - -
Presence 2016 gender compared to local minimum
wage
202-2 Proportion of senior management Refer Note 08 - - -
hired from the local community
Indirect Economic Impacts
2021 stability)
GRI 203: Indirect 203-1 Infrastructure investments and 120-129 - - -
Economic Impacts services supported
2016 6LJQLȴFDQWLQGLUHFWHFRQRPLFLPSDFWV 120-129 - - -


OMITTED
Anti-corruption
GRI 3: Material Topics 3-3 Management of material topics 58,486-487 (Anti-corruption - - -
2021 practices)
205-1 Operations assessed for risks related 488-489, Refer Note 09 - - -
to corruption
205-2 Communication and training about Refer Note 10 - - -
GRI 205: Anti-
anti-corruption policies and
corruption 2016
procedures
&RQȴUPHGLQFLGHQWVRIFRUUXSWLRQDQG Refer Note 11 - - -
actions taken
Tax
2021 stability)
207-1 Approach to tax - - -
207-2 Tax governance, control and risk - - -
management
GRI 207: Tax 2019 207-3 Stakeholder engagement and - - -
management of concerns related to
tax
207-4 Country-by-country reporting 244-253 - - -
Energy
GRI 3: Material Topics 3-3 Management of material topics 58,495-496 (Environment - - -
2021 protection and conservation)
302-1 Energy consumption within the 136 - - -
organization
302-2 Energy consumption outside of the 136 - - -
organization
GRI 302: Energy 2016
302-3 Energy intensity 133 - - -
302-4 Reduction of energy consumption 136 - - -
302-5 Reductions in energy requirements of Refer Note 12 - - -
products and services
Emissions
GRI 3: Material Topics 3-3 Management of material topics 58,495-496 (Environment - - -
2021 protection and conservation)
305-1 Direct (Scope 1) GHG emissions 138 - - -
305-2 Energy indirect (Scope 2) GHG 138 - - -
emissions
305-3 Other indirect (Scope 3) GHG 138 - - -
emissions
GRI 305: Emissions 305-4 GHG emissions intensity 138 - - -
2016 305-5 Reduction of GHG emissions 138 - - -
305-6 Emissions of ozone-depleting Refer Note 13 - - -
substances (ODS)
305-7 Nitrogen oxides (NOx), sulfur oxides 138 - - -
62[ DQGRWKHUVLJQLȴFDQWDLU
emissions

GRI CONTENT INDEX

OMITTED
Employment
GRI 3: Material Topics 3-3 Management of material topics 58,482-483 (Talent acquisition and - - -
2021 management)
401-1 New employee hires and employee 105,106 - - -
turnover
GRI 401: Employment %HQHȴWVSURYLGHGWRIXOOWLPH 104 - - -
2016 employees that are not provided to
temporary or part-time employees
401-3 Parental leave 112 - - -
Labour/Management Relations - - -
GRI 3: Material Topics 3-3 Management of material topics 58,484-485 (Employee relations) - - -
2021
GRI 402: Labour/ 402-1 Minimum notice periods regarding Refer Note 14 - - -
Management Relations operational changes
2016
Occupational Health and Safety
GRI 3: Material Topics 3-3 Management of material topics 58,486 (Employee health and - - -
2021 safety)
403-1 Occupational health and safety - - -
management system
+D]DUGLGHQWLȴFDWLRQULVNDVVHVVPHQW - - -
and incident investigation
403-3 Occupational health services - - -
403-4 Worker participation, consultation and - - -
communication on occupational
health and safety
403-5 Worker training on occupational - - -
GRI 403: Occupational
health and safety
Health and Safety
403-6 Promotion of worker health - - -
2018
403-7 Prevention and mitigation of - - -
occupational health and safety
impacts directly linked by business
relationships
403-8 Workers covered by an occupational - - -
health and safety management
system
403-9 Work-related injuries - - -
Refer Note 15
403-10 Work-related ill health - - -
Training and Education
GRI 3: Material Topics 3-3 Management of material topics 58,483-484 (Learning and - - -
2021 development)
404-1 Average hours of training per year per 107 - - -
employee
404-2 Programs for upgrading employee 109 - - -
GRI 404: Training and skills and transition assistance
Education 2016 programs
404-3 Percentage of employees receiving 109 - - -
regular performance and career
development reviews


OMITTED
Diversity and Equal Opportunity

GRI 3: Material Topics 3-3 Management of material topics 58,482-483 (Talent acquisition and - - -
2021 management)
405-1 Diversity of governance bodies and 112 - - -
GRI 405: Diversity and
employees
Equal Opportunity
405-2 Ratio of basic salary and 105 - - -
2016
remuneration of women to men
Local Communities
GRI 3: Material Topics 3-3 Management of material topics 58,494 (Community development) - - -
2021
413-1 Operations with local community 52-55,120-129,142-147 - - -
engagement, impact assessments and
GRI 413: Local development programs
Communities 2016 2SHUDWLRQVZLWKVLJQLȴFDQWDFWXDODQG Refer Note 16 - - -
potential negative impacts on local
communities
Customer Health and Safety
GRI 3: Material Topics 3-3 Management of material topics 58,488-489 (Customer health and - - -
2021 safety)
416-1 Assessment of the health and safety Refer Note 17 - - -
impacts of product and service
GRI 416: Customer
categories
Health and Safety
416-2 Incidents of non-compliance Refer Note 18 - - -
2016
concerning the health and safety
impacts of products and services
Marketing and Labeling
3-3 Management of material topics 58,489 (Sales promotions, - - -
GRI 3: Material Topics marketing communication and
2021 information availability on Bank’s
products and services)
417-1 Requirements for product and service 489, Refer Note 19 - - -
information and labeling
GRI 417: Marketing concerning product and service
and Labeling 2016 information and labeling
concerning marketing
communications
Customer Privacy
3-3 Management of material topics 58,481,489-490,490-491 - - -
GRI 3: Material Topics
(Information security, Customer
2021
privacy, Complaint management)
418-1 Substantiated complaints concerning Refer Note 22 - - -
GRI 418: Customer
breaches of customer privacy and
Privacy 2016
losses of customer data

GRI CONTENT INDEX
GRI NOTES
Note Number Remarks
01 There are no restatements with regard to sustainability reporting criteria.
02 During the year 2022, four (04) concerns were reported through Whistle Blowing. The reported cases were addressed in accordance with
the Whistle Blowing Policy and Audit Investigations were initiated. Findings and recommendations were reported to the Board Audit
Committee and to the Board of Directors as appropriate. Reports were sent to the disciplinary committee to take appropriate actions.
7KHUHFRPPHQGDWLRQVUHODWLQJWRSURFHVVLPSURYHPHQWDQGUHFWLȴFDWLRQRILQWHUQDOFRQWUROJDSVGHYLDWLRQVZHUHVKDUHGZLWKWKH
management.
03 There is no collective bargaining agreement between the Bank & SBEA. However, the relationship between two parties remains cordial.
04 Out of the 22 Material Topics for 2022, 21 remained unchanged from the previous year. The only new topic that became relevant in 2022
was "Macroeconomic Headwinds".
05 %HLQJLQWKHEXVLQHVVRI%DQNLQJFOLPDWHFKDQJHGRHVQRWKDYHDVLJQLȴFDQWLPSDFWRQRXUEXVLQHVV$FFRUGLQJO\GXULQJWKHUHSRUWLQJ
SHULRGQRUHFRUGVZHUHPDLQWDLQHGWRFDWDORJXHWKHH΍HFWRIFOLPDWHFKDQJHRQWKHEXVLQHVV
06 $VZHDUHDSULYDWHVHFWRURUJDQLVDWLRQWKHUHLVQRGLUHFWRULQGLUHFWȴQDQFLDODVVLVWDQFH JUDQWV UHFHLYHGIURPWKHJRYHUQPHQW
07 (QWU\/HYHO:DJHUHIHUVWRUHPXQHUDWLRQSDLGWRQHZHQWUDQWVMRLQLQJWKH%DQNDVD7UDLQHH6WD΍$VVLVWDQW-XQLRU([HFXWLYHΖ7KH%DQNGRHV
not distinguish based on gender and both males and females in these positions are entitled to a same entry level wage. There is no entry
level wage rate imposed on banking sector. However, Sampath Bank’s entry level wage is higher than the national minimum wage rate.
08 At Sampath Bank, Senior Management refers to a designated authority in charge of a key business unit/function. All senior managers of
the Bank are locally hired.
09 1RȴQHVZHUHLPSRVHGE\WKHUHJXODWRUVRQWKH%DQNSHUWDLQLQJWRLQFLGHQWVRIFRUUXSWLRQLQ
10 RIHPSOR\HHVDQGRI6HQLRU0DQDJHPHQWKDYHUHFHLYHGWUDLQLQJRQDQWLFRUUXSWLRQ
11 1RȴQHVZHUHLPSRVHGE\WKHUHJXODWRUVRQWKH%DQNSHUWDLQLQJWRLQFLGHQWVRIFRUUXSWLRQLQ
12 (QHUJ\UHGXFWLRQFDQQRWEHDFFXUDWHO\FDOFXODWHGRUPHDVXUHGLQUHODWLRQWRVSHFLȴFSURGXFWVRUVHUYLFHVRIWKH%DQN+RZHYHUWKH
Bank's solar migration project has seen rooftop solar installations at thirteen branches which has resulted in an overall reduction in the
volume of grid electricity consumed by the respective branch in providing banking services to customers.
13 (PLVVLRQVRI2]RQH'HSOHWLQJ6XEVWDQFHV 2'6 DUHLQVLJQLȴFDQWFRQVLGHULQJWKHQDWXUHRIRXUEXVLQHVV
14 No collective agreement is in force, operational changes are informed in advance depending on the requirement.
15 Due to the nature of business there have been no work related injuries and work related illnesses.
16 No incidents were reported during the reporting period.
17 As a service organisation, health and safety impacts of our products and service categories cannot be assessed.
18 None.
19 Products and service information published on the Bank's corporate website (www.sampath.lk) and in marketing communication materials
(in all three languages (S/T/E).
20 ZERO incidents were reported during the reporting period.
21 ZERO incidents were reported during the reporting period.
22 A total of 28 complaints were received in 2022, of these 24 were successfully resolved during the course of the year, while the other 04
remain under audit investigation and HR proceedings as at 31st December 2022.

INDEPENDENT ASSURANCE REPORT TO THE

BOARD OF DIRECTORS OF SAMPATH BANK PLC
IN THE INTEGRATED ANNUAL REPORT 2022
Independent Assurance Report to the Sampath Bank PLC’s responsibilities order for it to be in accordance with the
Board of Directors of Sampath Bank PLC criteria, and to issue a report. The nature,
Sampath Bank PLC’s management is
in the Integrated Annual Report- 2022 timing, and extent of the procedures
responsible for selecting the criteria, and
selected depend on our judgment,
for presenting the Integrated Report in
Scope including an assessment of the risk of
accordance with the said criteria, in all
We have been engaged by the material misstatement, whether due to
material respects. This responsibility
management of Sampath Bank PLC fraud or error.
includes establishing and maintaining
(“the Bank”) to perform an independent internal controls, maintaining adequate
assurance engagement, as defined by the We believe that the evidence obtained is
records and making estimates that are
Sri Lankan Standard on Assurance sufficient and appropriate to provide a
relevant to the preparation of the
Engagements, on the following elements basis for our independent assurance
Integrated Report, such that it is free from
of its Integrated Annual Report for the conclusion.
material misstatement, whether due to
year ended 31 December 2022 (the fraud or error.
“Integrated Report”). Our Independence and Quality
Control
Ernst & Young’s responsibilities
• Reasonable assurance engagement We have maintained our independence
Our responsibility is to express a
on the information on financial and confirm that we have met the
conclusion on the presentation of the
capital management as specified on requirements of the Code of Ethics for
Integrated Report in accordance with the
pages 79 - 84 of the Integrated Professional Accountants issued by the
Guiding Principles and Content Elements
Report. Institute of Chartered Accountants of Sri
of the International Integrated Reporting
Lanka and have the required
Council (IIRC)’s Integrated Reporting
• Limited assurance engagement on competencies and experience to conduct
Framework (<IR> Framework) based on
other information on management of this assurance engagement.
the evidence we have obtained.
the capitals (other than financial
capital), stakeholder engagement, EY also applies Sri Lanka Standard on
We conducted our engagement in
business model, strategy, Quality Control (SLSQC 1), Quality Control
accordance with the Sri Lanka Standard
organizational overview & external for Firms that Perform Audits and Reviews
on Assurance Engagements SLSAE 3000:
environment and outlook presented of Historical Financial Information, and
Assurance Engagements other than
in the Integrated Report. Other Assurance and Related Services
Audits or Reviews of Historical Financial
Engagements, and accordingly maintains
Information (SLSAE 3000) issued by the
Criteria applied by Sampath Bank a comprehensive system of quality control
Institute of Chartered Accountants of Sri
PLC including documented policies and
Lanka and the terms of reference for this
The Integrated Report is prepared based procedures regarding compliance with
engagement as agreed with Sampath
on the Guiding Principles and Content ethical requirements, professional
Bank PLC in the engagement letter dated
Elements of the International Integrated standards and applicable legal and
13th December 2022.
Reporting Council (IIRC)’s Integrated regulatory requirements.
Reporting Framework (<IR> Framework) The standards require that we plan and
(the “criteria”) publicly available at IIRC’s Description of procedures
perform our engagement to express a
website at “www.integratedreporting.org” performed
conclusion on whether we are aware of
any material modifications that need to We performed our procedures to provide
be made to the Integrated Report in reasonable and limited assurance
engagement in accordance with SLSAE
3000.


IN THE INTEGRATED ANNUAL REPORT 2022
Procedures performed in the reasonable was not designed to provide assurance environment, strategy, approaches to
assurance engagement depend on our on internal controls. Our procedures did putting members first, governance
judgement, including the assessment of not include testing controls or performing and reporting.
the risks of material misstatement procedures relating to checking
whether due to fraud or error. In making aggregation or calculation of data within • Obtaining an understanding of the
those risk assessments, we have IT systems. description of the Bank’s strategy and
considered internal control relevant to how the Bank creates value, what
the preparation and presentation of the We also performed the below procedures matters most to the stakeholders
reasonable assurance indicators in order as we considered necessary in the and enquiring the management as to
to design the assurance procedures that circumstances: whether the description in the
are appropriate in the circumstances. Our Integrated Report accurately reflects
procedures also included assessing the • Perform a comparison of the content their understanding.
appropriateness of the reasonable of the Integrated Annual Report
assurance indicators, the suitability of the against the Guiding Principles and • Perusing the Board of Directors
criteria in preparing and presenting the Content Elements given in the meeting minutes during the financial
reasonable assurance indicators within International Integrated Reporting year to ensure consistency with the
the Integrated Report and obtaining an Council (IIRC)’s Integrated Reporting content of the Integrated Report.
understanding of the compilation of the Framework (<IR> Framework).
financial information to the sources from • Perusing the relevant supporting
which it was obtained. • Perusing the Integrated Annual evidence related to qualitative &
Report – Financial Capital element quantitative disclosures within the
Procedures performed in the limited information to understand whether Integrated Report against identified
assurance engagement consisted of the information contained are material aspects.
making inquiries, primarily of persons properly derived from the audited
responsible for preparing the Integrated financial statements. • Perusing the Integrated Report in its
Report and related information and entirety to ensure it is consistent with
applying analytical and other appropriate • Interviewing the selected key our overall knowledge obtained
procedures. These procedures vary in management personnel and relevant during the assurance engagement.
nature and timing from and are less in staff to understand the internal
extent than for a reasonable assurance controls, governance structure and Emphasis of matter
engagement. Consequently, the level of reporting process relevant to the Social, natural and intellectual capital
assurance obtained in a limited assurance Integrated Report. management data/information are
engagement is substantially lower than subjected to inherent limitations given
the assurance that would have been • Obtaining an understanding of the their nature and the methods used for
obtained had a reasonable assurance relevant internal policies and determining, calculating and estimating
engagement been performed. procedures developed by the Bank, such data.
including those relevant to
Although we considered the effectiveness determining what matters most to
of management’s internal controls when the stakeholders, how the Bank
determining the nature and extent of our creates value, the external
procedures, our assurance engagement

We also do not provide any assurance on • Nothing has come to our attention
the assumptions and achievability of that causes us to believe that other
prospective information presented in the information presented in the
Integrated Report. Integrated Report are not fairly
presented, in all material respects, in
Restricted use accordance with the Guiding
This report is intended solely for the Principles and Content Elements of
information and use of Sampath Bank the International Integrated
PLC and is not intended to be and should Reporting Council (IIRC)’s Integrated
not be used by anyone other than the Reporting Framework (<IR>
specified party. Framework).
Conclusion
Based on our procedures and the
evidence obtained, we conclude that: 17 February 2023
Colombo
• The information on financial capital
management as specified on pages
79 - 84 of the Integrated Report are
properly derived from the audited
financial statements of the Bank for
the year ended 31 December 2022.


ON THE SUSTAINABILITY REPORTING CRITERIA
PRESENTED IN THE INTEGRATED ANNUAL REPORT 2022
Independent Assurance Report to the Sampath Bank PLC’s responsibilities extent of the procedures selected depend
Board of Directors of Sampath Bank PLC on our judgment, including an
Sampath Bank PLC’s management is
on the Sustainability Reporting Criteria assessment of the risk of material
responsible for selecting the criteria, and
Presented in the Integrated Annual misstatement, whether due to fraud or
for presenting the Report in accordance
Report - 2022 error.
with the said criteria, in all material
respects. This responsibility includes
Scope We believe that the evidence obtained is
establishing and maintaining internal
We have been engaged by the sufficient and appropriate to provide a
controls, maintaining adequate records
management of Sampath Bank PLC (“the basis for our independent assurance
and making estimates that are relevant to
Bank”) to perform an independent conclusion.
support the sustainability reporting
assurance engagement, as defined by the process of the Report, such that it is free
Sri Lankan Standard on Assurance Our Independence and Quality
from material misstatement, whether due
Engagements, on the sustainability Control
to fraud or error.
reporting criteria presented in the We have maintained our independence
Integrated Annual Report for the year Ernst & Young’s responsibilities and confirm that we have met the
ended 31 December 2022 (the “Report”). requirements of the Code of Ethics for
Our responsibility is to express a
Professional Accountants issued by the
conclusion on the presentation of the
• Reasonable assurance on the Institute of Chartered Accountants of Sri
Report in accordance with the GRI
information on financial performance Lanka and have the required
Standards based on the evidence we have
as specified on page 430 of the competencies and experience to conduct
obtained.
Report. this assurance engagement.
We conducted our engagement in

• Limited assurance on other EY also applies Sri Lanka Standard on
accordance with the Sri Lanka Standard
information presented in the Report, Quality Control (SLSQC 1), Quality Control
on Assurance Engagements SLSAE 3000:
prepared in accordance with the GRI for Firms that Perform Audits and Reviews
Assurance Engagements other than
Standards. of Historical Financial Information, and
Audits or Reviews of Historical Financial
Other Assurance and Related Services
Information (SLSAE 3000) issued by the
Criteria applied by Sampath Bank Engagements, and accordingly maintains
Institute of Chartered Accountants of Sri
PLC a comprehensive system of quality control
Lanka and the terms of reference for this
The sustainability reporting criteria including documented policies and
engagement as agreed with Sampath
presented in the Report has been procedures regarding compliance with
Bank PLC in the engagement letter dated
prepared in accordance with The Global ethical requirements, professional
13th December 2022.
Reporting Initiative's (GRI) Sustainability standards and applicable legal and
Reporting Guidelines, publicly available at regulatory requirements.
The standards require that we plan and
GRI’s global website www.globalreporting. perform our engagement to express a
org. Description of procedures
conclusion on whether we are aware of
performed
any material modifications that need to
This Report has been prepared in We performed our procedures to provide
be made to the Report in order for it to
accordance with the GRI Standards. an independent assurance engagement
be in accordance with the criteria, and to
issue a report. The nature, timing, and in accordance with SLSAE 3000.

Procedures performed in the reasonable procedures relating to checking We also do not provide any assurance on
assurance engagement depend on our aggregation or calculation of data within the assumptions and achievability of
judgement, including the assessment of IT systems. prospective information presented in the
the risks of material misstatement Report.
whether due to fraud or error. In making We also performed the below procedures
those risk assessments, we have as we considered necessary in the Restricted use
considered internal control relevant to circumstances: This report is intended solely for the
the preparation and presentation of the information and use of Sampath Bank
reasonable assurance Indicators in order • Perform a comparison of the content PLC and is not intended to be and should
to design the assurance procedures that of the Report against the Global not be used by anyone other than the
are appropriate in the circumstances. Our Reporting Initiative (GRI) - GRI specified party.
procedures also included assessing the Standards guideline.
appropriateness of the reasonable Conclusion
• Interviewing relevant organization’s
assurance indicators, the suitability of the
personnel to understand the process Based on our procedures and the
criteria in preparing and presenting the
for collection, analysis, aggregation evidence obtained, we conclude that:
reasonable assurance indicators within
and presentation of data.
the Report and obtaining an • The information on financial
understanding of the compilation of the • Review and validation of the
performance as specified on page
financial information to the sources from information contained in the Report.
430 of the Report is properly derived
which it was obtained. • Check the calculations performed by from the audited financial statements
the organization on a sample basis of the Bank for the year ended 31
Procedures performed in the limited
through recalculation. December 2022.
assurance engagement consisted of
making inquiries, primarily of persons • Advice, make recommendations and
• Nothing has come to our attention
responsible for preparing the Report and suggestions on the Sustainability
that causes us to believe that other
related information and applying Reporting indicators to improve the
information presented in the Report
analytical and other appropriate presentation standard.
are not fairly presented, in all
procedures. These procedures vary in • Independently review the content of material respects, in accordance with
nature and timing from and are less in the Report and request changes if the Bank’s sustainability practices and
extent than for a reasonable assurance required. policies some of which are derived
engagement. Consequently, the level of from the GRI Standards.
assurance obtained in a limited assurance • Express an independent assurance
engagement is substantially lower than conclusion on the performance
the assurance that would have been indicators presented in the
obtained had a reasonable assurance Sustainability Reporting criteria.
engagement been performed.
Emphasis of matter
17 February 2023
Although we considered the effectiveness Social, natural, and intellectual capital Colombo
of management’s internal controls when management data/information are
determining the nature and extent of our subjected to inherent limitations given
procedures, our assurance engagement their nature and the methods used for
was not designed to provide assurance determining, calculating, and estimating
on internal controls. Our procedures did such data.
not include testing controls or performing

GLOSSARY OF FINANCIAL AND

BANKING TERMS
A Average Weighted Deposit Rate (AWDR) FRQVLGHUHGLQGLYLGXDOO\VLJQLȴFDQWDQGWRFRYHUORVVHV
that has been incurred but has not yet been
Acceptances AWDR is calculated by the Central Bank monthly
LGHQWLȴHGDWWKHUHSRUWLQJGDWH7\SLFDOO\DVVHWVZLWKLQ
based on the weighted average of all outstanding
The signature on a Bill of Exchange indicates that the the consumer banking business (housing, personal,
interest bearing deposits of commercial banks and
person on whom it is drawn accepts the conditions vehicle loans, credit cards etc) are assessed on a
the corresponding interest rates.
of the Bill. In other words a Bill of Exchange that has portfolio basis.
been accepted. Average Weighted Prime Lending Rate (AWPLR)
Commercial Paper (CP)
Accounting Policies AWPLR is calculated by the Central Bank weekly
An unsecured, short-term debt instrument issued by
EDVHGRQFRPPHUFLDOEDQNVȇOHQGLQJUDWHVR΍HUHGWR
7KHVSHFLȴFSULQFLSOHVEDVHVFRQYHQWLRQVUXOHVDQG DFRUSRUDWLRQW\SLFDOO\IRUWKHȴQDQFLQJRIDFFRXQWV
their prime customers during the week.
practices adopted by an entity in preparing and receivable, inventories and meeting short-term
presenting Financial Statements. liabilities. The debt is usually issued at a discount,
B UHȵHFWLQJSUHYDLOLQJPDUNHWLQWHUHVWUDWHV
Accrual Basis
Basel II
5HFRJQLWLRQRIWKHH΍HFWVRIWUDQVDFWLRQVDQGRWKHU Common Equity Tier I (CET I) Capital
The capital adequacy framework issued by the Basel
events when they occur without waiting for receipt or Consists of stated capital, other capital and revenue
Committee on Banking Supervision (BCBS) in the
payment of cash or its equivalents. reserves. CET I is the element of capital which has the
form of the ‘International Convergence of Capital
KLJKHVWTXDOLW\DQGWKHPRVWH΍HFWLYHLQDEVRUELQJ
Actuarial Assumptions Measurement and Capital Standards’.
losses.
An entity’s unbiased and mutually compatible best Basel III
HVWLPDWHVRIWKHGHPRJUDSKLFDQGȴQDQFLDOYDULDEOH Commitments
The BCBS issued the Basel III rules, which presents
that will determine the ultimate cost of providing Credit facilities approved but not yet utilised by the
the details of strengthened global regulatory
SRVWHPSOR\PHQWEHQHȴWV clients as at the reporting date.
standards on bank capital adequacy and liquidity.
Additional Tier I (AT I) Capital Consolidated Financial Statements
Bills sent for Collection
It is a supplementary form of Tier I capital. &RQVROLGDWHGȴQDQFLDOVWDWHPHQWVDUHWKHȴQDQFLDO
A bill of exchange drawn by an exporter usually at a
AT I includes capital instruments other than the statements of a group in which the assets, liabilities,
term, on an importer overseas and brought by the
instruments included in CET I capital. HTXLW\LQFRPHH[SHQVHVDQGFDVKȵRZVRIWKH
exporter to his bank with a request to collect the
parent and its subsidiaries are presented as those of
Amortisation proceeds.
a single economic entity.
The systematic allocation of the depreciable amount Branch Bench Strength (BBS)
of an intangible asset over its useful life. Contingencies
The competence and number of employees ready to
A condition or situation, the ultimate outcome of
Amortised Cost ȴOOYDFDQWOHDGHUVKLSDQGRWKHUSRVLWLRQV
ZKLFK JDLQRUORVV ZLOOEHFRQȴUPHGRQO\RQWKH
7KHDPRUWLVHGFRVWRIDȴQDQFLDODVVHWRUȴQDQFLDO C occurrence or non-occurrence of one or more
OLDELOLW\LVWKHDPRXQWDWZKLFKWKHȴQDQFLDODVVHWRU uncertain future events.
ȴQDQFLDOOLDELOLW\LVPHDVXUHGDWLQLWLDOUHFRJQLWLRQ Capital Adequacy Ratio
minus principal repayments, plus or minus the Contract
The percentage of risk-weighted assets supported by
FXPXODWLYHDPRUWLVDWLRQXVLQJWKHH΍HFWLYHLQWHUHVW FDSLWDODVGHȴQHGXQGHUWKHIUDPHZRUNRIULVNEDVHG An agreement between two or more parties that
PHWKRGRIDQ\GL΍HUHQFHEHWZHHQWKDWLQLWLDODPRXQW capital standards developed by the Bank for creates enforceable rights and obligations.
and the maturity amount, and minus any reduction ΖQWHUQDWLRQDO6HWWOHPHQW %Ζ6 DQGDVPRGLȴHGWRVXLW
Control
(directly or through the use of an allowance account) local requirements by the Central Bank of Sri Lanka.
for impairment or uncollectability. An investor controls an investee when the investor is
&DSLWDO&RQVHUYDWLRQ%XΊHU &&% exposed, or has rights, to variable returns from its
Asset and Liability Management Committee involvement with the investee and has the ability to
It is designed to ensure that banks build up capital
(ALCO) D΍HFWWKRVHUHWXUQVWKURXJKLWVSRZHURYHUWKH
EX΍HUVRXWVLGHSHULRGVRIVWUHVVZKLFKFDQEHGUDZQ
A risk-management committee in a bank that down as losses are incurred. investee.
generally comprises the senior-management levels of
Cash Equivalents Corporate Governance
the institution. The ALCO’s primary goal is to evaluate,
monitor and approve practices relating to risk due to Cash equivalents are short-term, highly liquid The process by which corporate entities are
imbalances in the capital structure. Among the investments that are readily convertible to known governed. It is concerned with the way in which
factors considered are liquidity risk, interest rate risk, amounts of cash and which are subject to an power is exercised over the management and
RSHUDWLRQDOULVNDQGH[WHUQDOHYHQWVWKDWPD\D΍HFW LQVLJQLȴFDQWULVNRIFKDQJHVLQYDOXH direction of entity, the supervision of executive
the bank’s forecast and strategic balance sheet actions and accountability to owners and others.
Cash Flows
allocations.
Correspondent Bank
&DVKȵRZVDUHLQȵRZVDQGRXWȵRZVRIFDVKDQGFDVK
Associate Company equivalents. $EDQNLQDIRUHLJQFRXQWU\WKDWR΍HUVEDQNLQJ
An associate is an entity, including an unincorporated facilities to the customers of a bank in another
entity such as a partnership, over which the investor Collectively Assessed Loan Impairment country.
KDVVLJQLȴFDQWLQȵXHQFHDQGWKDWLVQHLWKHUD Provisions Cost Method
subsidiary nor an interest in a joint venture.
Also known as portfolio impairment provisions. A method of accounting whereby the investment is
Impairment assessment on a collective basis for UHFRUGHGDWFRVW7KHΖQFRPH6WDWHPHQWUHȵHFWV
homogeneous groups of loans that are not income from the investment only to the extent that

the investor receives distributions from accumulated Depreciation Equity Instrument

QHWSURȴWVRIWKHLQYHVWHHDULVLQJVXEVHTXHQWWRWKH
The systematic allocation of the depreciable amount An equity instrument is any contract that evidences a
date of acquisition.
of an asset over its useful life. residual interest in the assets of an entity after
Cost to Income Ratio deducting all of its liabilities.
Derecognition
Operating expenses excluding impairment charge for Equity Method
Derecognition is the removal of a previously
loans and other losses as a percentage of total The equity method is a method of accounting
UHFRJQLVHGȴQDQFLDODVVHWRUȴQDQFLDOOLDELOLW\IURPDQ
operating income. whereby the investment is initially recognised at cost
HQWLW\ȇVVWDWHPHQWRIȴQDQFLDOSRVLWLRQ
and adjusted thereafter for the post-acquisition
Country Risk
Derivatives change in the investor’s share of net assets of the
7KHULVNWKDWDIRUHLJQJRYHUQPHQWZLOOQRWIXOȴOLWV LQYHVWHH7KHSURȴWRUORVVRIWKHLQYHVWRULQFOXGHV
$GHULYDWLYHLVDȴQDQFLDOLQVWUXPHQWRURWKHU
obligations or obstructs the remittance of funds by WKHLQYHVWRUȇVVKDUHRIWKHSURȴWRUORVVRIWKH
contract, the value of which changes in response to
GHEWRUVHLWKHUIRUȴQDQFLDOUHDVRQV WUDQVIHUULVN RU investee.
some underlying variable (e.g. an interest rate), that
for other reasons (political risk).
has an initial net investment smaller than would be ESOP (Employee Share Ownership Plan)
Credit Rating required for other instruments that have a similar A method of giving employees shares in the business
response to the variable, and that will be settled at a for which they work.
An evaluation of a corporate’s ability to repay its
future date.
obligations or likelihood of not defaulting, carried out
Events after the Reporting Period
by an independent rating agency. Discount Rate
Events after the reporting period are those events,
Credit Risk A rate used to place a current value on future cash favourable and unfavourable, that occur between the
&UHGLWULVNLVWKHULVNRIȴQDQFLDOORVVWRWKH%DQNLID
ȵRZVΖWLVQHHGHGWRUHȵHFWWKHIDFWWKDWPRQH\KDVD end of the reporting period and the date when the
time value. ȴQDQFLDOVWDWHPHQWVDUHDXWKRULVHGIRULVVXH
FXVWRPHURUFRXQWHUSDUW\WRDȴQDQFLDOLQVWUXPHQW
fails to meet its contractual obligations, and arises Dividend Cover Expected Credit Losses (ECLs)
principally from the loans and advances to customers
3URȴWDIWHUWD[GLYLGHGE\JURVVGLYLGHQG7KLVUDWLR ECLs are probability-weighted estimate of the
and other banks and investment debt securities.
measures the number of times dividend is covered present value of cash shortfalls (i.e. the weighted
Credit Risk Mitigation E\WKHFXUUHQW\HDUȇVGLVWULEXWDEOHSURȴWV average credit losses, with respective risks of defaults
occurring in a given time period used as the weights).
A technique to reduce the credit risk associated with Dividend Yield ECL measurements are unbiased (i.e. neutral, not
an exposure by application of credit risk mitigants conservative and not biased towards optimism or
Dividend earned per share as a percentage of its
such as collateral, guarantee and credit protection. pessimism) and are determined by evaluating a
market value.
Currency Risk range of possible outcomes.
Documentary Letters of Credit (LCs)
7KHULVNWKDWWKHIDLUYDOXHRUIXWXUHFDVKȵRZVRID Exposure at Default (EAD)
Written undertakings by a bank on behalf of its
ȴQDQFLDOLQVWUXPHQWZLOOȵXFWXDWHEHFDXVHRIFKDQJHV This is an estimate of the exposure at a future default
customers, authorising a third party to draw on the
in foreign exchange rates. date, taking into account expected changes in the
%DQNXSWRDVWLSXODWHGDPRXQWXQGHUVSHFLȴFWHUPV
exposure after the reporting date, including
Currency SWAPs and conditions. Such undertakings are established
repayments of principal & interest and expected
for the purpose of facilitating international trade.
The simultaneous purchase of an amount of a drawdowns of committed facilities.
currency for spot settlement and the sale of the Domestic Systemically Important Banks (D-SIBs)
Exposure
same amount of the same currency for forward '6Ζ%VDUHGHȴQHGE\&%6/DQQXDOO\DFFRUGLQJWRWKH
settlement. A claim, contingent claim or position which carries a
Banking Act direction No. 10 of 2019.
ULVNRIȴQDQFLDOORVV
Customer Deposits E
F
Money deposited by account holders. Such funds are
Earnings per Share (EPS)
recorded as liabilities. Fair Value
7KHSURȴWDWWULEXWDEOHWRHDFKRUGLQDU\VKDUHLQWKH
Fair Value is the price that would be received to sell
D %DQNEDVHGRQWKHSURȴWIRUWKHSHULRGDIWHUWD[DQG
an asset or paid to transfer a liability in an orderly
after deducting minority interest and preference transaction between market participants at the
Deferred Tax
share Dividend. measurement date.
6XPVHWDVLGHLQWKHȴQDQFLDOVWDWHPHQWVIRUWD[DWLRQ
WKDWPD\EHFRPHSD\DEOHUHFHLYDEOHLQDȴQDQFLDO Economic Value Added (EVA) Finance Lease
\HDURWKHUWKDQWKHFXUUHQWȴQDQFLDO\HDUΖWDULVHV A measure of productivity which takes into $ȴQDQFHOHDVHLVDOHDVHWKDWWUDQVIHUVVXEVWDQWLDOO\
EHFDXVHRIWHPSRUDU\GL΍HUHQFHVEHWZHHQWD[UXOHV consideration cost of total invested equity. all the risks and rewards incidental to ownership of
and accounting conventions. an asset. Title may or may not eventually be
(ΊHFWLYH,QWHUHVW5DWH (,5
Delinquency transferred.
Rate that exactly discounts estimated future cash
$GHEWRURWKHUȴQDQFLDOREOLJDWLRQLVFRQVLGHUHGWR payments or receipts through the expected life of the Financial Guarantee Contract
be in a state of delinquency when payments are ȴQDQFLDOLQVWUXPHQWVRUZKHQDSSURSULDWHDVKRUWHU $ȴQDQFLDOJXDUDQWHHFRQWUDFWLVDFRQWUDFWWKDW
overdue. Loans and advances are considered to be SHULRGWRWKHQHWFDUU\LQJDPRXQWRIWKHȴQDQFLDO UHTXLUHVWKHLVVXHUWRPDNHVSHFLȴHGSD\PHQWVWR
delinquent when consecutive payments are missed. DVVHWRUȴQDQFLDOOLDELOLW\ reimburse the holder for a loss it incurs because a
Also known as ‘Arrears’. VSHFLȴHGGHEWRUIDLOVWRPDNHSD\PHQWZKHQGXHLQ
(ΊHFWLYH7D[5DWH (75 DFFRUGDQFHZLWKWKHRULJLQDORUPRGLȴHGWHUPVRID
Provision for taxation excluding deferred tax divided debt instrument.
E\WKHSURȴWEHIRUHWD[DWLRQ

GLOSSARY OF FINANCIAL AND

BANKING TERMS
Financial Instrument High Quality Liquid Assets (HQLA) K

Financial instrument is any contract that gives rise to HQLA are assets that can be easily and immediately Key Management Personnel
DȴQDQFLDODVVHWRIRQHHQWLW\DQGDȴQDQFLDOOLDELOLW\ converted into cash at little or no loss of value, that
Key management personnel are those persons
or equity instrument of another entity. can be readily sold or used as collateral to obtain
having authority and responsibility for planning,
funds in a range of stress scenarios and are
Firm Commitment directing and controlling the activities of the entity.
unencumbered, i.e., without legal, regulatory or
$ȴUPFRPPLWPHQWLVDELQGLQJDJUHHPHQWIRUWKH operational impediments. L
H[FKDQJHRIDVSHFLȴHGTXDQWLW\RIUHVRXUFHVDWD
VSHFLȴHGSULFHRQDVSHFLȴHGIXWXUHGDWHRUGDWHV I Leverage Ratio
Impaired Loans The Leverage Ratio is a transparent, simple,

Foreign Exchange Income
non-risk-based ratio and is calculated by dividing
The realised gain recorded when assets or liabilities Impaired loans are loans where the Group does not
Total Tier I capital from the Bank’s total exposures of
denominated in foreign currencies are translated H[SHFWWRFROOHFWDOOWKHFRQWUDFWXDOFDVKȵRZVRU
DOODVVHWVDQGR΍EDODQFHVKHHWLWHPV
into Sri Lankan Rupees on the reporting date at expects to collect them later than they are
SUHYDLOLQJUDWHVZKLFKGL΍HUIURPWKRVHUDWHVLQIRUFH contractually due. Lifetime Expected Credit Losses
at inception or on the previous reporting date. Impairment The expected credit losses that result from all
Foreign exchange income also arises from trading in possible default events over the expected life of a
This occurs when recoverable amount of an asset is
foreign currencies. ȴQDQFLDOLQVWUXPHQW
less than its carrying amount.
Forward Exchange Contract Liquidity Coverage Ratio (LCR)
Impairment Provisions
Agreement between two parties to exchange one Banks are required to maintain an adequate level of
Impairment provisions are provisions held on the
currency for another at a future date at a rate agreed unencumbered High Quality Liquid Assets (HQLA)
Statement of Financial Position as a result of the
upon today. that can be converted into cash to meet their liquidity
UDLVLQJRIDFKDUJHDJDLQVWSURȴWIRUWKHLQFXUUHGORVV
needs for a 30 calendar day time horizon under a
G
,QGLYLGXDOO\6LJQL΋FDQW/RDQ,PSDLUPHQW VLJQLȴFDQWO\VHYHUHOLTXLGLW\VWUHVVVFHQDULR/&5LV
Global Reporting Initiative (GRI) 3URYLVLRQ 6SHFL΋F,PSDLUPHQW3URYLVLRQ computed by dividing the stock of HQLA by the total
*5ΖLVDOHDGLQJRUJDQLVDWLRQLQWKHVXVWDLQDELOLW\ȴHOG Impairment is measured individually for assets that QHWFDVKRXWȵRZVRYHUWKHQH[WFDOHQGDUGD\V
GRI promotes the use of sustainability reporting as a DUHLQGLYLGXDOO\VLJQLȴFDQWWRWKH*URXS Liquid Assets
way for organisations to become more sustainable
Intangible Asset Assets that are held in cash or in a form that can be
and contribute to sustainable development.
$QLQWDQJLEOHDVVHWLVDQLGHQWLȴDEOHQRQPRQHWDU\ converted to cash readily, such as deposits with other
Going Concern asset without physical substance. banks, bills of exchange and treasury bills and bonds.
7KHȴQDQFLDOVWDWHPHQWVDUHQRUPDOO\SUHSDUHGRQ Liquidity Risk
Interest Cover
the assumption that an entity is a going concern and
A ratio showing the number of times interest charges 7KHULVNWKDWDQHQWLW\ZLOOHQFRXQWHUGLɝFXOW\LQ
will continue in operation for the foreseeable future.
is covered by earnings before interest and tax. PHHWLQJREOLJDWLRQVDVVRFLDWHGZLWKȴQDQFLDO
Hence, it is assumed that the entity has neither the
liabilities.
intention nor the need to liquidate or curtail
Interest Margin
materially the scale of its operations. Loss Given Default (LGD)
Net interest income expressed as a percentage of
Gross Dividend average interest earning assets. LGD is the percentage of an exposure that a lender
expects to lose in the event of obligor defaults. It is
7KHSRUWLRQRISURȴWVGLVWULEXWHGWRWKHVKDUHKROGHUV
Interest Rate Risk EDVHGRQWKHGL΍HUHQFHEHWZHHQWKHFRQWUDFWXDO
including the tax withheld.
7KHULVNWKDWWKHIDLUYDOXHRUIXWXUHFDVKȵRZVRID FDVKȵRZVGXHDQGWKRVHWKDWWKHOHQGHUZRXOG
Group ȴQDQFLDOLQVWUXPHQWZLOOȵXFWXDWHEHFDXVHRIFKDQJHV receive including any collateral.
A group is a parent and its subsidiaries. in market interest rates.
M
Guarantees Interest Rate SWAP
Market Capitalisation
A promise made by a third party (guarantor), who is An agreement between two parties where one
The value of a company obtained by multiplying the
not a party to a contract between two others, that stream of future interest payments is exchanged for
number of ordinary shares in issue by its market
the guarantor will be liable if the guarantee fails to another stream of future interest payments based on
value as at a date.
IXOȴOWKHFRQWUDFWXDOREOLJDWLRQV DVSHFLȴHGSULQFLSDODPRXQW
Market Risk
H Interest Spread
Market risk is the risk that changes in market prices,
7KLVUHSUHVHQWVWKHGL΍HUHQFHEHWZHHQWKHDYHUDJH
Hedging such as interest rates, equity prices, foreign exchange
interest rate earned and the average interest rate
$VWUDWHJ\XQGHUZKLFKWUDQVDFWLRQVDUHH΍HFWHGZLWK rates and credit spreads (not relating to changes in
paid on funds.
the aim of providing cover against the risk of WKHREOLJRUȇVLVVXHUȇVFUHGLWVWDQGLQJ ZLOOD΍HFWWKH
unfavourable price movements (interest rate, foreign Investment Properties %DQNȇVLQFRPHRUWKHYDOXHRILWVKROGLQJVRIȴQDQFLDO
exchange rate, commodity prices, etc) instruments.
Investment property is property (land or a building
or part of a building or both) held (by the owner or by Materiality
High Loss Absorbency (HLA) Requirement
WKHOHVVHHXQGHUDȴQDQFHOHDVH WRHDUQUHQWDOVRU
7KHDGGLWLRQDOFDSLWDOEX΍HUUHTXLUHPHQWIRU'6Ζ%V 7KHUHODWLYHVLJQLȴFDQFHRIDWUDQVDFWLRQRUDQHYHQW
for capital appreciation or both, rather than for use in
the omission or misstatement of which could
the production or supply of goods or services or for
LQȵXHQFHWKHGHFLVLRQVRIXVHUVRIȴQDQFLDO
administrative services; or sale in the ordinary course
statements.
of business.

N R Statutory Reserve Fund
Net Asset Value Per Share Repurchase Agreement A capital reserve created as per the provisions of the
Banking Act No. 30 of 1988.
Shareholders’ funds divided by the number of This is a contract to sell and subsequently repurchase
ordinary shares in issue. JRYHUQPHQWVHFXULWLHVDWDJLYHQSULFHRQDVSHFLȴHG Subsidiary
future date. A Subsidiary is an entity that is controlled by another
Net-Interest Income (NII)
Return on Average Assets (ROA) entity.
7KHGL΍HUHQFHEHWZHHQZKDWDEDQNHDUQVRQDVVHWV
such as loans and securities and what it pays on 3URȴWDIWHUWD[H[SUHVVHGDVDSHUFHQWDJHRIDYHUDJH Substance over Form
OLDELOLWLHVVXFKDVGHSRVLWVUHȴQDQFHIXQGVDQG total assets, used along with ROE, as a measure of The consideration that the accounting treatment and
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performance comparison. transactions and events should be governed by their
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Stable Funding (RSF). expressed as a percentage of average ordinary T
shareholders’ equity.
Nostro Account Total Tier I Capital
A bank account held in foreign country by a domestic Revenue Reserves Total Tier I Capital consists of Common Equity
bank, denominated in the currency of that country. Reserves set aside for future distribution and Tier I Capital (CET I) and Additional Tier I Capital (AT I).
Nostro accounts are used to facilitate the settlement investment.
of foreign exchange trade transactions. Total Capital (Capital Base)
Reverse Repurchase Agreement
Non-Controlling Interest Capital base is summation of the core capital
Transaction involving the purchase of government
(Tier I) and the supplementary capital (Tier II).
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not attributable, directly or indirectly to a parent. VHOOHUDWDJLYHQSULFHRQDVSHFLȴFIXWXUHGDWH Twelve Month Expected Credit Losses
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agreed price, generally lower than market price.
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fraud, negligence, oversight, human error, process Right-of-use Asset (ROU) date.
errors, system failures, external events, etc. ROU asset is a lessee’s right to use an asset over the U
P life of a lease. The asset is calculated as the initial
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entities. lease incentives received.
Useful Life
Power Risk-weighted Assets
Useful life is the period over which an asset is
The Power is the existing rights that give the current Used in the calculation of risk-based capital ratios. expected to be available for use by an entity or the
ability to direct the relevant activities. The face amount of lower risk assets is discounted number of production or similar units expected to be
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Price Earnings Ratio (P/E Ratio) comparable risk per rupee among all types of assets.
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factors.
time horizon. value added is allocated among the employees, the
S providers of capital, to government by way of taxes
Projected Unit Credit Method (PUC) and retained for expansion and growth.
Segmental Analysis
An actuarial valuation method that sees each period
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entitlement and measures each unit separately to HQWHUSULVHVSHFLȴFDOO\WKHGL΍HUHQWLQGXVWULHVDQG A local currency account maintained by a local bank
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WKHDFFUXHGEHQHȴWPHWKRGSURUDWHGRQVHUYLFHRU bank, it is a Nostro account. The domestic bank acts
Shareholders’ Funds
DVWKHEHQHȴW\HDUVRIVHUYLFHPHWKRG as custodian or manages the account of a foreign
Total of issued and fully paid share capital and capital counterpart.
Prudence and revenue reserves.
Y
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judgment needed in making the estimates required Yield to Maturity
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under conditions of uncertainty, such that assets or Discount rate at which the present value of future
income are not overstated and liabilities or expenses payments would equal the security’s current price.
are not understated.

ACRONYMS AND ABBREVIATIONS
& And CAD Canadian Dollar

12mECL 12 Months Expected Credit Loss CAGR Compound Annual Growth Rate
24/7-365 At any time, all year round CAPEX Capital Expenditure
2H Second Half CAR Capital Adequacy Ratio
ABC Anti-Bribery and Corruption CASA Current Accounts and Savings Accounts
ACBE Annual Conference on Business Economics CBSL Central Bank of Sri Lanka
ADB Asian Development Bank CCB &DSLWDO&RQVHUYDWLRQ%X΍HU
AED United Arab Emirates Dirham CCC Customer Care Centre
AGM Annual General Meeting CCD Central Cash Department
ALCO Asset and Liability Management Committee CCDU Central Credit Documentation Unit
AML Anti-Money Laundering CCER Customer Complaint Event Reporting
AOT Art of Transformation CCPI Colombo Consumer Price Index
APEC $VLD3DFLȴF(FRQRPLF&RRSHUDWLRQ CCPU Central Credit Processing Unit
API Application Programming Interface CCTV Closed-Circuit Television
ASA Alternative Standardised Approach CDM Cash Deposit Machine
ASPI All Share Price Index CEA Central Environmental Authority
AT After Tax CEC Ceylon Entrepreneurs’ Club
AT 1 Additional Tier I CEFTS Common Electronic Fund Transfer Switch
ATL Above the Line CEO &KLHI([HFXWLYH2ɝFHU
ATM Automated Teller Machine CET I Common Equity Tier I
AUD Australian Dollar CFM Close Family Members
AWPLR Average Weighted Prime Lending Rate CFO &KLHI)LQDQFLDO2ɝFHU
BAC Board Audit Committee CFT Combating the Financing of Terrorism
BBS Branch Bench Strength CHF Swiss Franc
BCBS Basel Committee on Banking Supervision CHS Complaint Handling System
BCP Business Continuity Plan/Planning (as CIO &KLHIΖQIRUPDWLRQ2ɝFHU
appropriate) CIRR Customer's Internal Risk Rating
BCPC Board Capital Planning Committee CISO &KLHIΖQIRUPDWLRQ6HFXULW\2ɝFHU
BHRRC Board Human Resources and Remuneration CMS Cash Management Solutions
Committee CNU Credit Nursing Unit
BIA Bandaranaike International Airport/Business CO2e Carbon Dioxide Equivalent, is a standard unit for
Impact Analysis/Basic Indicator Approach (as measuring carbon footprints
appropriate) CPO &KLHI3URFXUHPHQW2ɝFHU
BIRMC Board Integrated Risk Management Committee CRM Cash Recycler Machine
BIS Bank for International Settlement CSD Corporate Sustainability Department
BITC Board Information Technology Committee CSE Colombo Stock Exchange
Bn Billion CSP Customer Security Programme
BNC Board Nomination Committee CSR Corporate Social Responsibility
BNO Bank Notes Operation DBU Domestic Banking Unit
BOCU Branch Operations Centralisation Unit DC Documentary Credit
BPO %XVLQHVV3URPRWLRQ2ɝFHU DLP Data Leakage Prevention
bps Basis Points DMS Delinquent Management System
BRPTRC Board Related Party Transactions Review DPD Days Past Due
Committee DR Disaster Recovery
BSS Baseline Security Standards DRP Disaster Recovery Procedure
BT Before Tax D-SIB Domestic Systemically Important Bank
BTC Board Treasury Committee EAD Exposure at Default
BTL Below the Line ECL Expected Credit Loss
CA Sri Lanka/ Institute of Chartered Accountants of Sri Lanka ED Executive Director
ICASL EDB Export Development Board
CAAT Computer Aided Audit Techniques/Tools EDR Endpoint Detection and Response

EFF Extended Fund Facility IND Independent Director

EIR (΍HFWLYHΖQWHUHVW5DWH IPG Internet Payment Gateway
EMDE Emerging Market and Developing Economies IR Integrated Reporting
EPF Employees' Provident Fund IRR Interest Rate Risk
EPS Earnings per Share ISC Information Security Committee
ESG Environmental, Social and Governance ISL ΖQGLYLGXDOO\6LJQLȴFDQW/RDQ
ESMS Environmental and Social Management System ISMS Information Security Management System
ESOP Employee Share Ownership/Option Plan ISO International Organisation for Standardisation
ESOS Employee Share Option Scheme IT Information Technology
ESPS Employee Share Purchase Scheme JFPR Japan Fund for Poverty Reduction
ETF Employees' Trust Fund JPY Japanese Yen
EU European Union KDU Kotelawala Defense University
EUR Euro Kg Kilograms
EVP Employee Value Proposition Km Kilometers
EWS Early Warning Signal KMP Key Management Personnel
FCBU Foreign Currency Banking Unit KPI Key Performance Indicators
FCY Foreign Currency KRI Key Risk Indicators
FD Fixed Deposit kWh Kilowatt-hour
FinCSIRT Financial Sector Computer Security Incident KYC Know-Your-Customer
Response Team L&D Learning and Development
FINDAS Finance Document Approval System LC Letter of Credit
FIU Financial Intelligence Unit of Sri Lanka LCR Liquidity Coverage Ratio
FMCG Fast-Moving Consumer Goods LDU Loan Disbursement Unit
FSVAT Value Added Tax on Financial Services LED Light-Emitting Diode
FVOCI Fair Value through Other Comprehensive Income LGD Loss Given Default
FVPL )DLU9DOXHWKURXJK3URȴWRU/RVV LKR Sri Lankan Rupee
FX/FOREX Foreign Exchange LMS Learning Management System
FY Financial Year LP Gas /LTXHȴHG3HWUROHXP*DV
GBP British Pound Sterling LRS Loan Review Summary
GDP Gross Domestic Product LTECL Life Time Expected Credit Loss
GHG Greenhouse Gas MD Managing Director
GRI Global Reporting Initiative MIS Management Information System
HKD Hong Kong Dollar Mn Million
HLA Higher Loss Absorbency MOU Memorandum of Understanding
HQLA High Quality Liquid Assets MRMU Market Risk Management Unit
HR Human Resources MSME Micro, Small and Medium Scale Entrepreneurs
HRIS Human Resource Information System MTM Mark to Market
HVAC Heating, Ventilation and Air Conditioning MW Megawatt
i.e. That is NBFI Non-Banking Financial Institutions
ICAAP Internal Capital Adequacy Assessment Process NBQSA National Best Quality Software Awards
ICOFR Internal Control Over Financial Reporting NBRO National Building Research Organisation
ICT Information and Communication Technologies NBV Net Book Value
IDB Industrial Development Board NCE National Chamber of Exporters
IDP Individual Development Plan NCPI National Consumer Price Index
IFC International Finance Corporation NCRCS New Comprehensive Rural Credit Scheme
IIRC International Integrated Reporting Council NCRE Non-Conventional Renewable Energy
ILEDR Internal Loss Event Data Reporting NED Non-Executive Director
ILO International Labour Organisation NFCI Net Fee and Commission Income
IMF International Monetary Fund NID Non-Independent Director
IMF-EFF International Monetary Fund-Extended Fund NII Net Interest Income
Facility NIM Net Interest Margin

ACRONYMS AND ABBREVIATIONS
NOP Net Open Position SID Senior Independent Director

NPA Non-Performing Advances SIEM Security Information and Event Management
NSBM National School of Business Management SITS Sampath Information Technology Solutions
NSC Network Services Centre Limited
NSFR Net Stable Funding Ratio SLA Service Level Agreement/Sampath Learning
OBU 2΍VKRUH%DQNLQJ8QLW Academy (as appropriate)
OCI Other Comprehensive Income SLAR Statutory Liquid Assets Ratio
OD Overdraft SLBA Sri Lanka Banks’ Association
OTP One-Time-Password SLDB Sri Lanka Development Bond
p.a. Per Annum SLFRS/LKAS Sri Lanka Accounting Standards
p.m. Per Month SLIM Sri Lanka Institute of Marketing
P2P Procure-to-Pay SLISB Sri Lanka International Sovereign Bond
PAM Privileged Access Management SLSAE Sri Lanka Standard on Assurance Engagements
PAT 3URȴW$IWHU7D[ SME Small and Medium-sized Enterprises
PBT 3URȴW%HIRUH7D[ SMILE Small and Micro Industries Leader and
PD Probability of Default Entrepreneur Promotion Project
PEP Project Evaluation Process SMS Short Message/Messaging Service
PESTEL Political, Economic, Social, Technological, SoAT Statement of Alternative Treatment
Environmental and Legal SOC Security Operation Centre
PII 3HUVRQDOΖGHQWLȴFDWLRQΖQIRUPDWLRQ SPPI Solely Payments of Principal and Interest
PIN 3HUVRQDOΖGHQWLȴFDWLRQ1XPEHU sq. ft. Square Feet
PLC Public Limited Company Sri Lanka NCPC National Cleaner Production Centre of Sri Lanka
PLM Product Lifecycle Management SRM Security Register Maintenance
PMEP Project Management and Evaluation Process SRR Statutory Reserve Ratio
PPE Property, Plant and Equipment STARS Special Thanks and Recognition Scheme
PUC Projected Unit Credit SWIFT Society for Worldwide Interbank Financial
PVBP Present Value Basis Points Telecommunications
Q1/Q2/Q3/Q4 Quarter 1/Quarter 2/Quarter 3/Quarter 4 SWOT Strengths, Weaknesses, Opportunities and
QDK Cheque Deposit Machine Threats
QR Code Quick Response Code TAP Trade Assistance Programme
R&D Research and Development T-Bill Treasury Bill
RBA Risk Based Approach T-Bond Treasury Bond
RBP Risk Based Pricing tCO2e Tones of Carbon Dioxide Equivalent
RCP Recovery Policy/Plan/Planning (as appropriate) Tn Trillion
RCSA Risk and Control Self-Assessment TOR Terms of Reference
RHS Right Hand Side TT Telegraphic Transfer
RMU Risk Management Unit TTDAS Telegraphic Transfer Document Approval System
ROA Return on Assets UK United Kingdom
ROE Return on Equity UN United Nations
RPA Robotic Process Automation UOP University of Peradeniya
RPT Related Party Transactions UPI UnionPay International
RSA Rate Sensitive Assets UPS Uninterruptible Power Supply
RSL Rate Sensitive Liabilities US United States
RTO Recovery Time Objectives USD/US$ United States Dollar
RWA Risk Weighted Assets USJ University of Sri Jayewardenepura
RWN Rating Watch Negative VaR Value at Risk
SBEA Sampath Bank Employees’ Association VAT Value Added Tax
SDAS Sampath Document Approval System Vis-à-vis In relation to, counterpart
SDG Sustainable Development Goals w.e.f. :LWK(΍HFW)URP
SENS 6DPSDWK(PSOR\HH1RWLȴFDWLRQ6\VWHP WIM Women in Management
SGD Singapore Dollar YoY Year-on-Year

NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 37th Annual General Meeting of Sampath Bank PLC (the Company) will be held at "Balmoral", The Kingsbury,
No. 48, Janadhipathi Mawatha, Colombo 01, on 30th March 2023 at 9.30 a.m. for the following purposes:
7RUHFHLYHDQGFRQVLGHUWKH$QQXDO5HSRUWRIWKH%RDUGRI'LUHFWRUVRQWKH$΍DLUVRIWKH&RPSDQ\
2. To receive and consider the Statement of Audited Accounts for the year ended 31st December 2022 with the Report of the Auditors
thereon.
ΖWLVKHUHE\UHVROYHGWKDWWKH&RPSDQ\GHFODUHVDWRWDOGLYLGHQGRI5VSHUVKDUHIRUWKHȴQDQFLDO\HDUVXEMHFWWRDGLYLGHQG
WD[RIDVUHFRPPHQGHGE\WKH%RDUGRI'LUHFWRUV6XFKGLYLGHQGVKDOOEHSD\DEOHDVIROORZV
D ɄɄFDVKGLYLGHQGRI5VSHUVKDUHDQG
E ɄɄVFULSGLYLGHQGRI5VSHUVKDUH
Rs 3.45 be distributed in the form of cash amounting to a total payment of a sum of Rs 3,948,090,144.75 and subject to a dividend tax
RI
5VEHGLVWULEXWHGLQWKHIRUPRIVFULSDPRXQWLQJWRDWRWDOVXPRI5VDQGVXEMHFWWRDGLYLGHQGWD[RI7KH
shares issued in the scrip dividend shall be valued at Rs 39.49 per share which result in One (01) share being issued for each existing
40.3989773996 shares held by the shareholders at the end of trading on the Colombo Stock Exchange on the date of the AGM.
Consequently, the total number of shares to be issued under the scrip dividend shall be 28,326,805 ordinary shares.
4. It is further resolved that the Board of Directors be authorized to dispose of the shares arising from the aggregation of the residual
fractions consequent to the scrip dividend in the market and to distribute the proceeds therefrom for CSR initiatives of the Bank as
PD\EHGHHPHGȴWE\WKH%RDUGRI'LUHFWRUV
7RHOHFW0U+LUDQ&DEUDDOZKRZDVDSSRLQWHGWRWKH%RDUGWRȴOOXSDFDVXDOYDFDQF\LQWKH%RDUGLQWHUPVRI$UWLFOH1RRIWKH
Articles of Association of the Company.
6. To re-elect Mr Harsha Amarasekera who retires by rotation at the Annual General Meeting as a Director in terms of Article No. 87 of
the Articles of Association of the Company.
7. To re-elect Mrs Keshini Jayawardena who retires by rotation at the Annual General Meeting as a Director in terms of Article No. 87 of
the Articles of Association of the Company.
8. To re-elect Mr Vinod Hirdaramani who retires by rotation at the Annual General Meeting as a Director in terms of Article No. 87 of the
Articles of Association of the Company.
9. To grant approval to the Board of Directors to make any donations, contributions or subscriptions as it may consider appropriate
GXULQJWKHȴQDQFLDO\HDU
10. To re-appoint Messrs Ernst & Young, Chartered Accountants as Auditors of the Company for the ensuing year and to authorise the
Directors to determine their remuneration.
By order of the Board,
LASANTHA SENARATNE
Company Secretary
17th February 2023

Colombo, Sri Lanka
Note:
A member is entitled to appoint a Proxy to participate and vote on his/her/its behalf and a Proxy need not be a member of the Company.
$)RUPRI3UR[\LVHQFORVHGIRUWKLVSXUSRVH7KHFRPSOHWHG)RUPRI3UR[\VKRXOGEHGHSRVLWHGDWWKH5HJLVWHUHG2ɝFH 6HFUHWDULDW
Department) of the Company at No. 110, Sir James Peiris Mawatha, Colombo 02, Sri Lanka, or scanned and emailed to “company_
secretary@sampath.lk” not less than 48 hours before, the appointed time for holding the Annual General Meeting and no registration of
Proxies will be accommodated at the venue on the date of the Annual General Meeting.

516
NOTES

517
STAKEHOLDER FEEDBACK FORM
Sampath Bank greatly values your feedback about this Annual Report as it will help us to further improve the quality of our future
publications. As such, we encourage you to complete and return this feedback form to;
COMPANY SECRETARY
Sampath Bank PLC
Colombo 02, Sri Lanka
E-mail: company_secretary@sampath.lk
Tel : +94 11 4730652/420/548
Fax : +94 11 2300924
WHICH STAKEHOLDER GROUP/S DO YOU BELONG TO? (YOU MAY TICK MORE THAN ONE)
Shareholder Investor Customer
Employee Supplier Service Provider
Community Public Authority Regulatory Body
Student Journalist Analyst
Special Interest Group NGO Other
RATE YOUR OVERALL IMPRESSION OF THIS REPORT IN TERMS OF:
Indicator Excellent Good Fair Poor
Content and Scope
Informative
Transparent
Trustworthy
Comprehensive
User Friendly
Design and Layout

518
STAKEHOLDER FEEDBACK FORM
COMMENTS/QUERIES/SUGGESTIONS
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Yes No
Would you like to receive Details/News of our Products/Services via e-mail mentioned below
YOUR DETAILS
Name : .........................................................................................................................................
Address : .........................................................................................................................................
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Telephone (Residence) : .........................................................................................................................................
7HOHSKRQH 2ɝFH
Mobile : .........................................................................................................................................
Fax : .........................................................................................................................................
E-mail : .........................................................................................................................................

519
CORPORATE INFORMATION
GENERAL BOARD OF DIRECTORS

Mr Harsha Amarasekera Mrs Keshini Jayawardena
NAME OF COMPANY CREDIT RATING Chairman/Non-Independent, Independent, Non-Executive
Sampath Bank PLC Fitch Ratings Lanka Limited has Non-Executive Director Director
assigned National Long Term 0U5XVKDQND6LOYD
LEGAL FORM Mr Vinod Hirdaramani
Rating of ‘A(lka)/RWN’ Deputy Chairman/Non-
A Public Limited Liability Independent, Non-Executive
[31st December 2022: AA-(lka)/ Independent, Non-Executive
Company incorporated in Sri Director
RWN] to Sampath Bank PLC. Director
Lanka on 10th March 1986 Mr Hiran Cabraal
AUDITORS Mr Dilip de S Wijeyeratne
under the Companies Act No. Independent, Non-Executive
Senior Independent Director,
17 of 1982 and listed on the Messrs Ernst & Young Director
Non-Executive Director
Colombo Stock Exchange, Chartered Accountants
Mr Nanda Fernando
re-registered on 28th April 2008 Ms Aroshi Nanayakkara
LAWYERS Managing Director
under the Companies Act No. 07 Independent, Non-Executive
Messrs Nithya Partners Director Mr Ajantha de Vas Gunasekara
of 2007. A Licensed Commercial
Attorneys-at-Law Executive Director/
Bank under the Banking Act No. 'U6DQMLYD:HHUDZDUDQD
Messrs Heritage Partners &KLHI)LQDQFLDO2ɝFHU
30 of 1988. Independent, Non-Executive
Attorneys-at-Law Director
COMPANY REGISTRATION
NUMBER COMPANY SECRETARY Mr Vajira Kulatilaka
PQ 144 Mr Lasantha Senaratne Independent, Non-Executive
Attorney-at-Law Director
ACCOUNTING YEAR END
31st December 2022 ASSISTANT COMPANY
SUBSIDIARIES
SECRETARY
VAT REGISTRATION NUMBER
Mr Muditha Walpola Name of the Company Holding % Nature of
134001194-7000
Attorney-at-Law Business
HEAD OFFICE AND
FOR INVESTOR RELATIONS, Sampath Centre Ltd 100 Renting of Commercial
REGISTERED OFFICE
PLEASE CONTACT Property
No. 110, Sir James Peiris
Chief Manager - Investor SC Securities (Pvt) Ltd 100 Stock Broking
Mawatha, Colombo 02,
Relations, Sampath Bank PLC Siyapatha Finance PLC 100 Financial Services
Sri Lanka
No. 110, Sir James Peiris
Sampath Information 100 IT Services
TELEPHONE Mawatha, Colombo 02,
Technology Solutions Ltd
+94 11 2300260 Sri Lanka
+94 11 2358358 aloka@credit.sampath.lk
+94 11 4730630 +94 11 5406100 STOCK EXCHANGE LISTINGS
+94 11 5331441 +94 77 8179276
+94 11 5600600
FOR CLARIFICATIONS ON THE 1,144,373,955 Ordinary Shares
REPORT, PLEASE CONTACT
FAX 75,000,000 Basel III Compliant - Tier II Listed Rated Unsecured
Company Secretary
+94 11 2303085 Sampath Bank PLC Subordinated Redeemable Debentures with a Non-Viability
SWIFT CODE No. 110, Sir James Peiris Conversion of Rs 100/- each - 2018/2023
BSAMLKLX Mawatha, Colombo 02, 70,000,000 Basel III Compliant - Tier II Listed Rated Unsecured
Sri Lanka
E-MAIL Subordinated Redeemable Debentures with a Non-Viability
company_secretary@sampath.lk
mgr@oper.sampath.lk Conversion of Rs 100/- each - 2019/2024
+94 11 4730652
info@sampath.lk +94 11 4730420 60,000,000 Basel III Compliant - Tier II Listed Rated Unsecured
+94 11 4730548 Subordinated Redeemable Debentures with a Non-Viability
Conversion of Rs 100/- each - 2021/2028
www.sampath.lk
100,000,000 Basel III Compliant - Tier II Listed Rated Unsecured
https://www.facebook.com/Sampathbankplc Subordinated Redeemable Debentures with a Non-Viability
https://www.instagram.com/sampathbankplc/ Conversion of Rs 100/- each - 2023/2028
https://twitter.com/SampathBankPLC
https://www.youtube.com/channel/UCxNY_milDsSKGkrL5sFU9vg

Annual Report 2022 Sampath Bank PLC
FORM OF PROXY
THIRTY SEVENTH ANNUAL GENERAL MEETING
Sampath Bank PLC
Colombo 02, Sri Lanka.
I/We,.....................................................................................................................................................................................................................................................
bearing NIC No./Passport No./Company Reg. No. ...............................................................of..........................................................................................
............................................................................................................................................................................................................................................................
being a member/members of Sampath Bank PLC (the Company) hereby appoint Mr/Mrs/Miss/Ven/Rev.....................................................
....................................................................................................................................................................................................................................................….....
bearing NIC No./Passport No. .......................................................... of......................................................................................................................................
.................................................................................................................................................................................................................................. whom failing:
1 Mr Harsha Amarasekera failing him 7 Mrs Keshini Jayawardena failing her

2 Mr Rushanka Silva failing him 8 Mr Vinod Hirdaramani failing him
3 Mr Dilip de S Wijeyeratne failing him 9 Mr Hiran Cabraal failing him
4 Ms Aroshi Nanayakkara failing her 10 Mr Nanda Fernando failing him
5 Dr Sanjiva Weerawarana failing him 11 Mr Ajantha de Vas Gunasekara
6 Mr Vajira Kulatilaka failing him
as my/our proxy to participate and vote for me/us on my/our behalf at the Thirty Seventh Annual General Meeting of the Company
to be held at "Balmoral", The Kingsbury, No. 48, Janadhipathi Mawatha, Colombo 01 on 30th March 2023 at 9.30 a.m. and at any
adjournment thereof.
Please mark your preference with “X”
FOR AGAINST
1. To receive and consider the Annual Report of the Board of Directors on the Affairs of the Company.
2. To receive and consider the Statement of Audited Accounts for the year ended 31st December 2022
with the Report of the Auditors thereon.
3. To approve the recommended Cash dividend of Rs 3.45 per share and the Scrip dividend of Rs 1.15
per share for the financial year 2022 as set out in the Notice convening the Annual General Meeting.
4. To authorize the Board of Directors to dispose of the shares arising from the aggregation of the
residual fractions consequent to the scrip dividend in the market and to distribute the proceeds
therefrom for CSR initiatives of the Bank as may be deemed fit by the Board of Directors as set out in
the Notice convening the Annual General Meeting.
5. To elect Mr Hiran Cabraal who was appointed to the Board to fill up a casual vacancy in the Board in
terms of Article No. 93 of the Articles of Association of the Company.
6. To re-elect Mr Harsha Amarasekera who retires by rotation at the Annual General Meeting as a
Director in terms of Article No. 87 of the Articles of Association of the Company.
7. To re-elect Mrs Keshini Jayawardena who retires by rotation at the Annual General Meeting as a
Director in terms of Article No. 87 of the Articles of Association of the Company.
8. To re-elect Mr Vinod Hirdaramani who retires by rotation at the Annual General Meeting as a Director
in terms of Article No. 87 of the Articles of Association of the Company.
9. To grant approval to the Board of Directors to make any donations, contributions or subscriptions as
it may consider appropriate during the financial year 2023.
10. To re-appoint Messrs Ernst & Young, Chartered Accountants as Auditors of the Company for the
ensuing year and to authorize the Directors to determine their remuneration.
Signed on this .............................................. day of ................................................. 2023
Signature/s .......................................................................................................................
NIC/Passport/Company Reg. No. of Shareholder/s ..........................................................
Note: 1. Proxy need not be a member of the Company

2. Instructions as to completion of the Form of Proxy are given in the next page
Annual Report 2022 Sampath Bank PLC
INSTRUCTIONS AS TO COMPLETION
1. Kindly perfect the Form of Proxy, after filling in legibly your full name and address and by signing in the space
provided.
2. The completed Form of Proxy should be deposited at the Registered Office (Secretariat Department) of the
Company at No. 110, Sir James Peiris Mawatha, Colombo 02, Sri Lanka, or scanned and emailed to “company_
secretary@sampath.lk” not less than 48 hours before, the appointed time for holding the Annual General Meeting
and no registration of Proxies will be accommodated at the venue on the date of the Annual General Meeting.
3. If you wish to appoint a person other than Chairman, Deputy Chairman or a Director of the Company as your Proxy,
please insert the relevant details in the space provided before the names of the Board of Directors on the Form of
Proxy.
4. Article No. 73 of the Articles of Association of the Company provides that: “Any corporation which is a member of
the Company may by resolution of its directors or other governing body, authorize such person as it thinks fit to act
as its representative at any meeting of the Company or of any class of members of the Company, and the person
so authorized shall be entitled to exercise the same powers on behalf of such corporation as the corporation could
exercise if it were an individual member of the Company”.
5. Please mark your preference with an "X" in the space provided as to how your proxy may vote on each resolution. If
no indication is given, the proxy, at his/her discretion, will vote as he/she thinks fit.
6. Article No. 63 of the Articles of Association of the Company provides that: “In the case of joint-holders of a share, the
senior who tenders a vote, whether in person or by proxy or by attorney or by representative shall be accepted to
the exclusion of the votes of the other joint-holders, and for this purpose seniority shall be determined by the order
in which the names stand in the Register of Members in respect of the joint holding”.
7. In the case of a Company/Corporation, the Proxy must be under its Common Seal, which should be affixed and/or
attested in the manner prescribed by its Articles of Association.
8. When a proxy is signed by an attorney, the legally executed power of attorney in accordance with the relevant
regulatory provisions must be deposited at the company's registered office for registration.
Name of Shareholder : ..................................................................................................................................
NIC/Passport/Company Reg. No. of Shareholder : ..................................................................................................................................
Membership No./Share Certificate No. : ..................................................................................................................................
CDS Account No. [if applicable] : ..................................................................................................................................
No. of Shares : ..................................................................................................................................
Name of Proxyholder : ..................................................................................................................................
NIC No./Passport No. of Proxyholder : ..................................................................................................................................

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True strength is derived through decades of experience, dedication, skill, and

The strong partnerships we have built over time empower us to advance

Together, we represent strength in motion.

Page Nostro Accounts, Correspondent Banks and Exchange

Page Sampath Centre Limited.....................................................................164

Financial Capital Manufactured Capital Intellectual Capital

Page 79 Page 85 Page 94

SAMPATH BANK PLC - Annual Report 2022

View this Annual Report Online View Highlights of this Annual

GOVERNANCE AND RISK MANAGEMENT SUPPLEMENTARY INFORMATION

Human Capital Social and Relationship Capital Natural Capital

Annual Report 2022 - SAMPATH BANK PLC

ABOUT THE REPORT

Our Reporting Frameworks and Suite

Integrated � The International Integrated Reporting Framework of the International Integrated

� Sri Lanka Accounting Standards issued by the Institute of Chartered Accountants of

SAMPATH BANK PLC - Annual Report 2022

Our Integrated Reporting Boundary

Our Strategy and Material Opportunities

Our Financial Reporting Boundary

Sampath Bank’s Business Activities Subsidiaries’ Business Activities

Our Stakeholder Engagement

Shareholders Suppliers and

Annual Report 2022 - SAMPATH BANK PLC

ABOUT THE REPORT

Governance and Risk Management

Sustainability and ESG Reporting

2011 2012 2013

SAMPATH BANK PLC - Annual Report 2022

Value Creation Forward-Looking Statements Disclaimer - Sampath Bank PLC considers

GRI 2-5 Board Responsibility Statement

Feedback GRI 2-3,25

Annual Report 2022 - SAMPATH BANK PLC

About the Bank.......................................................................................

ABOUT THE BANK

229 363 360 98 1,338

19 25+ 37 609 121 3,948

3.4 Mn+ 3.3 Mn+ 11,000+ 60,000+ Millions of

SAMPATH BANK PLC - Annual Report 2022

Origin Story Industry Transformation

Annual Report 2022 - SAMPATH BANK PLC

ABOUT THE BANK

8.12% Sampath Bank PLC

Market Share - Key Facts 2022

1.16% 14.27% 27.85% 4.35%

Rs 34.20 Rs 39.1 Bn 13.45% Fitch Rating:

Annual Report 2022 - SAMPATH BANK PLC

2022 2021 Change % 2022 2021 Change %

Profitability (Rs Mn)

SAMPATH BANK PLC - Annual Report 2022

Composition of Total Operating

Impairment Charge Operating Expenses ROE (after income tax)

Rs 13.1 Bn Rs 73.5 Bn Rs 110.44

Annual Report 2022 - SAMPATH BANK PLC

Key Indicator Measurement 2022 2021 2020

Key Indicator Measurement 2022 2021 2020

Key Indicator Measurement 2022 2021 2020

SAMPATH BANK PLC - Annual Report 2022

Key Indicator Measurement 2022 2021 2020

Total employees Number 3,948 4,013 4,048