Commercial Leasing and Finance maintains growth
Commercial Leasing and Finance Ltd. (CLC) posted growth in profits
before tax for the year completed, recording Rs. 3.2b and a
corresponding profit after tax of Rs. 2.9b. The growth in profits was a
direct result of the increase in interest income which grew by 51percent
to reach Rs. 4.4b from previous year's income of Rs. 2.9b.
The company achieved this level of performance through its strategy
of steady portfolio growth backed by effective collections leading to
lower non-performing loans ratio. The portfolio recorded steady growth
over the year increasing the book from Rs. 15b to Rs. 21b. This was a
growth of 38 percent.
The company's collection efficiency provided a strong backing to
achieve this growth with the non-performing loans being contained at a
ratio of 1.1 percent, which is one of the best NPL ratios in the
industry. The provisions made on account of bad and doubtful debts were
strengthened with additional provisions of Rs. 96m over and above the
Central Bank of Sri Lanka (CBSL) requirements.
The factoring business of CLC, Commercial Factors too, contributed to
the increase in interest income with 73 percent growth over the past
year to end at Rs. 795m. The company's profit after tax of Rs. 2.9b was
after providing for Rs. 263m as taxes, of which Rs. 205m was for income
taxes and the balance being deferred taxation.
These profits were achieved by strategic expansion of its core
business of lending and effective management of the borrowing costs and
The operating expenses of the Company increased fuelling the growth
in the business and expansion of the footprint throughout the island.
However, these increases in expenses did not negatively affect the
performance of the company, clearly demonstrating the low cost model of
CLC with a superior cost to income ratio of 20 percent.
CLC recorded this level of growth through its carefully planned
growth strategy which was fuelled by the expansion in the distribution
network of branches and service centres.
The Company added its fiftieth branch during the year and eight of
these branches are in the North and the East where CLC has had a strong
presence and acceptance among the public for several years. CLC has a
strong presence in the regions where access to funding is offered to the
Company's target market of the lower SME and the Micro sectors.
The name of the Company was changed to Commercial Leasing and Finance
Ltd after obtaining approval from the CBSL to function as a Finance
In line with CBSL requirements to list the company, an application
was made with the Colombo Stock Exchange for listing which was accepted
and the company shares were traded subsequently.