TFGL to expand branch network and break even on operational costs

by Lalin FERNANDOPULLE

The Finance and Guarantee Ltd (TFGL) will expand its branch network and diversify business as the company is poised to break even on operational profits soon, said TFGL Chairman Preethy Jayawardena .

Preethy Jayawardena

He said the loss making venture has been completely restored into a profitable organisation which made a profit of Rs. 33 m during the first two quarters this year. The company incurred a loss of Rs. 3.5b during the financial year-ending March 31 this year.

TFGL is completely out of the woods with Rs. 750-800 m new deposits collected every month. The volume of business is between Rs.800m to Rs.1b a month from leasing the, hire purchase loans and pawnbroking sectors.

The company is back on track due to good governance and new internal controls which helped to boost business and regain reputation.

TFGL suffered liquidity constraints in the wake of the crisis in the Ceylinco Group. The Central Bank appointed Merchant Bank of Sri Lanka PLC as the Managing Agent of TFGL in March 2009 to strengthen and restore public confidence in the company.

"TFGL will diversify into other sectors and expand operations, once the company breakseven on operational profits," Jayawardena said.

Jayawardena said Rs. 8b worth land which had been idling has been reduced to Rs.4 b and added that with the sale of assets the company will break even on operational profits. "Appointment of consultants, independent auditors, risk management, investment and audit committees, cost saving measures and proper utilisation of staff helped re-build the organisation" Jayawardena said.

He said plans were afoot to increase the number of branches which is currently 60.The company is one of the oldest registered finance companies and was set up in 1940.