 
Author: Ajantha de Vas Gunasekara, Executive Director/CFO, Sampath Bank
Technology has revolutionized business models and customer experience, with those organizations that integrate it strategically, unlocking greater value for their stakeholders. In the banking sector, increasing customer expectations for instant and seamless services and the widespread adoption of digital technologies have created a need for modernization of service delivery. The entry of fintechs and new forms of operation continues to push the boundaries of traditional banks while intensifying competition. In addition, the ability of digital banking services to transcend geographic boundaries has increased financial inclusion by improving access to marginalized communities and facilitating greater participation in the formal financial system.
Digital transformation
2025 was an important year for Sampath Bank, as we embarked on our digital transformation journey, embedding technology with purpose, across all strategic pillars and business operations, staying true to our vision of making banking easy and accessible at scale. Our strategy, centered on the enduring pillars of customer focus, efficiency, digital leadership and sustainable growth, is now supported by strategic investments in advanced data analytics, formally elevating it as a core strategic capability.
This analytics-driven approach has deepened customer focus by enabling greater automation and predictive services while driving operational efficiencies through automation and risk foresight. It also builds the foundation of our digital leadership, building smart platforms and products while supporting sustainable growth by enabling portfolio management and impact assessment.
Advances in technology have furthered our mission of financial inclusion and access
Implementing this strategy requires a deliberate and significant investment in the underlying IT infrastructure. This includes deploying enhancements to the banking core system, data pool and an enhanced API integration platform to create a unified customer data ecosystem. These initiatives are expected to enable deep automation, unparalleled speed and expansion in product development and service delivery, strengthening our competitiveness and market position in the Sri Lankan banking industry. We have also proactively embraced artificial intelligence and machine learning in areas such as credit checks and personal financial information to improve credit decisions.
We invested rapidly in developing the team's skills through focused training and development while supporting their transition to new ways of working with targeted change management programs. A newly formed team of data scientists and data analysts worked closely with business units to ensure data-driven insights translated into actionable decisions to support sustainable growth and a superior customer experience.
Reflecting its strategic importance, every aspect of the technology integration is under strict supervision through a strong management structure led by a Board of Directors. This ensured alignment of digital investments with key priorities, improved resource allocation and prioritized investments while ensuring compliance with regulatory requirements and industry standards. In addition, our strong IT governance framework, customer privacy and data security policies and business continuity plans have strengthened trust in our digital ecosystem while strengthening long-term resilience.
Delivery price
Our digital transformation program has fostered relevant innovation while accelerating capitalization, resulting in measurable value creation for our clients. We launched 'Sampath Select' in 2025, which represents the first step in digital lending. This AI-powered instant loan has provided our retail customers with a seamless and secure loan application experience, enabling completion in just five clicks through the 'Sampath Vishwa' mobile app.
Our retail customers have also benefited from complementary lending programs and financial advice, improving financial well-being. Data-driven insights have supported the introduction of home equity loans in partnership with select housing developers that support individuals to own their own homes. Meanwhile, high-net-worth customers have benefited from advanced social media features that elevate and personalize their banking experience.
For our corporate clients, our digitization strategy and data analytics have provided new capabilities, complete financial solutions designed to meet broad business needs, enhanced, improved and accelerated service delivery and complex treasury and commercial solutions that have improved their efficiency and financial management. The launch of our banking API platform enabled seamless integration of corporate and banking systems, simplifying transactions across supply chains.
Timely advice on cash flow management and market opportunities presented by small and medium enterprises, the backbone of Sri Lanka's economy, has enhanced our delivery of strategic solutions to facilitate their growth. The implementation of several programs and digital tools also enabled faster credit decisions and relationship-based pricing and increased support provided by an increased and trained team of relationship managers that positioned the bank as the preferred partner within this customer segment.
Most importantly, technological advances have furthered our mission of financial inclusion and access. By building sophisticated digital profiles, we are now able to proactively extend services to segments that were previously considered neglected, using additional data to assess creditworthiness beyond traditional metrics. This allowed us to reach many early stage entrepreneurs, rural businesses, and individuals, ensuring that growth is not only facilitated, but also equitable and far-reaching.
Building on a legacy
Our designation as a 'Key Domestic Bank' in 2025 confirmed the important role of Sampath Bank in securing the country's financial stability. It also emphasized the need to pursue strategies that contribute to broad economic growth within the framework of prudent risk management, sound corporate governance and sound financial management.
While direct value creation from new strategies will accrue to shareholders in the medium term, the value delivered to our investors in 2025 remains significant. Our EPS increased by 11 percent to Rs 25.76 in 2025 compared to Rs 23.30 in 2024 despite higher upfront costs.
The bank's PAT rose 11 per cent to Rs 30.2bn ($97.5m) in 2025, driven in part by an impressive 21 per cent rise in fee and commission income, which offset the impact of shrinking net interest margins in a lower interest rate environment. The bank's return on equity also improved to 17.93% in 2025 from 17.74% in 2024.
Sampath Bank's total assets grew 11 percent to Rs 1.98trn ($6.4bn) due to an increase in its overall loan portfolio. Macroeconomic conditions and improving business confidence supported a 27 percent rise in total loans and advances to Rs 1.22trn ($3.95bn), surpassing the Rs 1trn milestone in the second quarter of 2025. Asset growth was supported by healthy deposit growth and a deliberate rebalancing of its investment portfolio. Bank deposits increased by 12 percent to Rs 1.65trn ($5.3bn) with moderate growth in current and savings accounts (CASA), which rose to 34.7 percent at the end of December 2025 from 34.0 percent at the end of December 2024, easing pressure on natural interest income. The bank's capital position remained strong, with a Tier 1 capital adequacy ratio of 14.75 percent, which was above industry standards, while asset quality indicators also made significant improvements.
Strengthening long-term sustainability
Cyclone Ditwah's devastating impact on lives, homes, property and livelihoods has highlighted the importance of emergency preparedness and a sharper focus on environmental impact management and sustainability. The integration of SLFRS S1 and S2 facilitated the formal identification, control and monitoring of the bank's critical sustainability and climate-related risks, while the first climate plan clearly set out the key measures to be implemented. We are also introducing green deposits, which operate within the green deposit framework, allowing environmentally conscious consumers to participate in the country's transition to a low carbon economy. We developed our Environmental and Social Management System (ESMS) and expanded its scope to cover all lending services (except for regulated products), ensuring that environmental and social compliance is embedded in all of the bank's financial operations. In 2025, we also received ISO14001:2015 certification, which ensures compliance with the best global practice in environmental management.
We have also invested in strategic environmental and social projects for shared success. 'Wewata Jeewayak,' our flagship project, now in its 25th year, has restored 28 tanks as of December 31, 2025, with 2025 marking the highest number of tank restorations done in a single year. The project has supported the lives of more than 16,000 families and regenerated more than 4,000 hectares of paddylands, supporting the nation's food production while improving local communities.
The bank also supports these communities by improving financial literacy through systematic capacity building programs. The expansion of these programs in collaboration with other companies has made most of these communities successful as skill building and access to markets are supported by socio-economic progress. The 'Breath to the Ocean' project has enabled the restoration of over 11 hectares of mangroves and wetlands, protecting the flora and fauna that exist in these important natural areas. The bank has continued to invest in its coral restoration program, deepening our commitment to restoring coastal ecosystems. We also launched a program to help 200 women-led entrepreneurs, supporting them by equipping them with skills and access to finance.
Strong foundations for future growth
Sri Lanka's economic trajectory is expected to remain broad on the move, although the adverse impact of Cyclone Ditwah may slow recovery momentum in the near term as reconstruction of damaged infrastructure continues. The financial sector is expected to experience moderate growth supported by improving investor sentiment.
Against this, Sampath Bank will continue to implement its strategic agenda, increase digital solutions and advanced data analysis based on sustainability, drive sustainable growth, strengthen organizational resilience and bring long-term benefits to all stakeholders.
