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| Sunday, 28 July 2002 |
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LB Finance to utilise IT for marketing by CHAMIKARA WEERASINGHE Leasing continues to remain the core business of LB Finance. A total of Rs 429 million was disbursed in respect of 814 contracts during the financial year ending December 31, 2001, Managing Director Mano Alles states in the company's annual report. The total value of the lease and hire purchases of LB Finance amounts to Rs. 1.29 billion which represents 51 per cent of the total assets. The projected income from the portfolio is Rs. 209 million. The total deposits from non-bank customers grew to Rs 1.35 billion from Rs 1.16 billion. Interest rates rose during the year, increasing the pressure on the performance of the financial services sector. Consequently, LB Finance's average deposit interest rate rose from 16.2 per cent to 18.2 per cent during the period under review. Due to strict management of bank borrowings, the company achieved a reduction of Rs. 24.2 million. The company had recorded a cash inflow of Rs. 23.5 million during the year. The collection ratio was 94 per cent compared to the previous year's ratio of 93 per cent. "It is very creditable, given the larger context of a contracting economy," says Ms Alles. Despite unfavourable economic conditions, LB Finance has sustained its profitability at a level, which is marginally higher than that recorded during 2000. The company has maintained its profit at Rs. 5.2 million although there was a drop in gross income from Rs. 419 million to Rs. 363 million, which is the result of global recession as well as the recession in the national economy during the last few years, she states. "We have successfully increased our income from pawn broking by expanding the network and opening new pawning centres. The total value of disbursement now stands at Rs. 92 million against collateral gold to the value of Rs. 164 million as at the balance sheet date," she says. Due to the prevailing conditions in the real estate market, only two new projects - Giriulla and Thalawathugoda - started during the year. Despite the decline in turnover, the prospects for the future remain positive as the lack of professional realty services in Sri Lanka has created an ideal climate for LB Finance to market its products and services in the real estate sector. The company plans to expand its marketing activities in this sector by using information technology. "Our customers will be afforded the facility of availing themselves of a range of data relating to real estate over the Internet," she says. |
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