CORPORATE

SLFL posts Rs 165.21m pre tax profit

Sampath Leasing and Factoring Limited, a fully owned subsidiary of Sampath Bank PLC, announced its financial results for 2010 which shows a turnaround, laying the platform for future growth and expansion.

The company made a pre tax profit of Rs 165.21 million and a post tax profit of Rs 137.65 million for the 12 months ended December 31.

The first step in expansion commenced in July 2009, when Sampath Bank added impetus to the capital structure of the company with a fresh infusion of Rs 300 million as equity capital.

The re-engineering of the company’s core processes laying greater emphasis on key performance indicators was a contributory factor for the growth in profitability.

The recovery of delinquent accounts with a view to reducing the value of non-performing advances (NPA’s) resulted in the value of NPA’s declining by Rs 124 million for the year 2010, resulting in a significant clean up of the advances portfolio and a vast improvement in the company’s NPA ratio.

The company has a strategic plan over a three -year time horizon that seeks to achieve an exponential growth phase in its activities through a process of branch/channel expansion, aggressive and segment defined marketing programs, diversity in product lines and improvement of credit delivery speed and processes.

Managing Director of Sampath Bank PLC and Executive Director of the company Harris Premaratne said, “The company would concentrate on two fund based product categories in the main - namely the distribution of Finance Leases and Factoring of book debts.

With regard to Finance leases the target segment would envelope the SME’s and corporate executives.

We also go for reach and extending of tailor - made structured facilities for a broad spectrum of the market and asset categories viz; cars, three wheelers, low valued commercial vehicles, agricultural equipment and other commercial vehicles. With regards to factoring we strive to offer a comprehensive service at flexible rates reaching out to a client segment that goes beyond the SME sector.

Factoring services would also include value additions such as professional sales ledger administration and debt collection.

In order that both products are at congruence with the bank’s overall plans a clear line of marketing platforms have been defined”.

The company recently opened branches in Peliyagoda, and Kalmunai and have set plans for further branch/channel expansion.

The aggressive growth of the loan book has commenced through product lines and channel expansion.

With regard to leasing the company has tailor made products for different segments/ assets.

These include ‘Life Style Leasing’ aimed at corporate executives, ‘TUK TUK’ leases aimed at the three wheeler market, ‘Agri Leases’ targeted at the agricultural sector and ‘Senin Cash’ an asset backed loan scheme.

Factoring facilities have been branded under ‘Support Cash’.

The principal aim of the company is to attain a market ranking that places itself within the top five players by 2014.

The company recently appointed two new non-executive directors with extensive experience in the finance leasing and factoring industry, Asoka Sirimanne (former Managing Director Mercantile Leasing), and Dr. Dilanjen Soysa (former Managing Director Commercial Leasing) and a Past President of the Leasing Association of Sri Lanka.

Fortis acquires 28.6% of Lanka Hospitals

Fortis Global Healthcare Holdings (Pte) Ltd, a company owned by Malvinder Mohan Singh and Shivinder Mohan Singh has acquired 28.6 percent of Lanka Hospitals Corporation Limited, the Colombo listed Sri Lankan hospital.

Lanka Hospitals is a tertiary healthcare provider and one of the largest hospital groups in Sri Lanka.

The hospital specialises in cardiology and cardiac surgery, neuro-sciences, orthopaedics and complex urology/nephology procedures.

The 350-bed hospital is majority owned by Sri Lanka Insurance Corporation Ltd, a Government of Sri Lanka company.

Fortis’ latest acquisition, the fourth in five months, is an important step in achieving the Singh family’s vision of creating a premier global healthcare group outside India.

In the last four months, Fortis has acquired the largest private primary care company in Hong Kong, invested in the largest dental care company in Australia and announced the acquisition of a cancer speciality hospital project in Singapore.

Fortis Global Healthcare intends to build aggregate healthcare businesses with assets across all healthcare segments including diagnostics, primary care and hospitals.

The objective is to create an integrated healthcare business, leveraging of synergies and scale, driven by quality medical professionals and infrastructure and providing patient-centric care and healing.

In addition to Fortis Global Healthcare, the Singh family also owns a majority stake in the Indian-listed Fortis Healthcare Limited, a leading hospital chain in India.

Executive Chairman of Fortis Global Healthcare Malvinder Mohan Singh said, “Lanka Hospitals is the first step for Fortis Global to build its healthcare business interest in one of the fastest growing economies in Asia. We believe there are tremendous opportunities for the hospital’s expansion and we will support the company’s management in realising such growth.”

The execution on the Colombo Stock Exchange was achieved and completed through Religare Capital Markets, a joint-venture with Bartleet Mallory Stockbrokers (Pvt) Ltd, the sole financial advisor to Fortis on the transaction.

Fitch affirms ETI at ‘BB-(lka)’; outlook stable

Fitch Ratings Lanka has affirmed Edirisinghe Trust Investment Ltd’s (ETI) National Long-Term rating at ‘BB-(lka)’with Stable Outlook.

ETI’s rating reflects its relatively weak core equity position and large exposure to real estate investments.

It also takes into account the company’s considerable exposure to, and solid franchise in, low-risk gold-backed lending (pawning), and its consequently sound asset quality.

Substantial improvement in ETI’s core capital base and profitability while maintaining asset quality could result in a rating upgrade. Conversely, increased exposure to debt-funded investments leading to lower profitability, and/or deterioration in capitalisation or asset quality could result in a downgrade.

ETI’s real estate investments accounted for 22 percent of assets for the nine months ended December 31 (9MFY11) and are debt-funded. Considerably lower disposals of these properties have weighed on profitability. Consequently, profitability as measured by returns on assets at 1.7 percent was low in relation to other registered finance companies (RFCs) rated by Fitch.

The company expects to sell off a considerable share of its property projects by end Q1FY12.

ETI has not undertaken further real estate investments since 2009 and has indicated that it will continue not to do so as it further sells down the portfolio.

Pawning increased to 74 percent of total advances at end-9MFY11 enhancing ETI’s asset quality and maturity schedules. Gross non-performing advances (NPAs) accounted for 5.1 percent of advances at 9MFY11 and compared well with other RFCs rated by Fitch.

However, Fitch notes that asset quality could weaken as ETI grows its vehicle financing portfolio where NPAs are considerably higher (24 percent of advances at end-9MFY11).

Due to ETI’s large exposure to pawning, which carries a low risk weight for regulatory capital adequacy computations, capital adequacy is within regulatory minimum requirements.

Kapila Ariyaratne appointed CEO Seylan Bank

Seylan Bank PLC has appointed Kapila Ariyaratne as its General Manager/Chief Executive Officer.

Ariyaratne made his entry into banking in 1984 as a management trainee at Grindlays Bank PLC and spent the next 27 years with several banks, including ABN Amro Bank NV, Mashreq Bank PSC, Arab National Bank (Riyadh), People’s Bank and Nations Trust Bank PLC.

While a substantial part of his experience is in Corporate Banking, he has hands-on experience in International Trade Finance Operations, Customer Service Operations, Credit Risk Management, Institutional and Correspondent Banking as well as SME and Microfinance.

Being a key member of the team that undertook the restructuring of a key state sector bank in 2001, Ariyaratne is also familiar with the mechanisms of bringing about key changes in large organisations in order to meet present day challenges and to optimise opportunities.

An old boy of Royal College, Colombo, he is a first class honours graduate of the University of Colombo. He holds Royal College colours in rugby football and university colours in rugby football and hockey. He has also represented CR & FC in A-division rugby.