TFC a commercial bank soon

Chairman of The Finance Company (TFC) Preethi Jayawardena, hopes to transform the company into a full fledged commercial bank. TFC is also planning to convert their Agri Centres at Alawathugoda, Neluwa, Hingurakgoda,Badureliya, Tissamaharama, Haputale, Thambuttegama and Galewela into full fledged branches to cater to the growing needs of the people. He said the eight agro centers were earlier only giving agro loans. He is planning to increase the branch network to 80 shortly.

Jayawardena was confident that the company can be brought into breakeven point within the next 3-4 months. After making continuous losses for 30 months the company made a profit of Rs 26 m during the first quarter ending June 2011.

"Once we start making operational profits the sky will be the limit for the company", said Jayawardena. He said during the last month alone the new deposit intake was around Rs 750 m while plans are in place to increase it to Rs 1 bn for a month which is an achievable target.

All depositors who demanded their money after the Golden Key crisis have been paid off in full. Initially 2,522 customers demanded their money amounting to Rs 750 m but only Rs. 301 m was paid against this, as many depositors later decided to reinvest their deposits. "This proves that depositors have regained confidence in us as we explained the situation to them as well as the staff", he said.

He said that when the new Director Board was appointed in February this year the company was making an average operational loss of Rs 200 m per month.

Now we have reduced it to a great extent. We have brought in three consultants to restructure the company, clean up the Balance Sheet and also to attend to HR issues.

The company is on a restructuring drive and under this plan we are planning to dispose Rs 8 b worth of idle property either at cost or at profit.

This will help us to bring in much needed cash for future operations. He added that, however even today they will purchase any valuable property for development and disposal after careful examination.

The company operates with 60 branches and around 1,050 staff.

Most of the staff are in the back office and they should be sent to the frontline to build efficiency, and justify their large salary bill.

Jayawardena said that there was a Rights Issue of of Rs. 1.6 b on voting shares and a further Rs. 2 b in deposit conversion on non-voting shares in January 2011.

This helped the company to settle all bank borrowings and save on interest payments.

TFC engages in leasing, hire purchase, pawn broking, micro financing, fixed deposits and real estate business and is the oldest finance company in the country.

SG