MBSL records highest profit in 25 years

The Merchant Bank of Sri Lanka Ltd (MBSL) has recorded the highest profit in the 25-year history of the bank.

The Bank's third quarter ending results have been outstanding with a 32% growth in revenue and profit over the corresponding period over the last year. Cumulative revenue and profit after tax for the nine months ending September 30, 2006 recorded Rs. 517 million and Rs. 157 million.

The high profit growth was largely due to steady growth in business volumes, efficient management of lending together with excellent recovery practices which have all contributed to this success.

A growth in the Balance Sheet too was recorded during the nine months. Lending portfolio increased by 18% while borrowings decreased by 6%. Shareholder funds too increased by 7% after the payment of a dividend of 7.5%.

The bank's assets amounting to Rs. 3.3 billion comprises the bank's gross loans and advances contributed by leasing, hire purchase and trade financing. The bank's largest portfolio, leasing (Rs. 1,757 million) has been expanding steadily, but slowed down with the introduction of Hire Purchase (Rs. 775 million). Hire purchase has been growing faster than any other product in its portfolio due to the exemption of VAT on rental, which has been an industry-wide phenomenon.

The bank's trade finance unit has been consolidating its position during the year and has been focusing on recovery of bad debts.

The unit recorded a turnover of Rs. 93 million with a contribution of Rs. 58 million reflecting a growth of 82% and 150%.