MBSL records 22% growth in income

In the backdrop of a slowdown in economic growth resulting in reduced credit growth and volatile market conditions, Merchant Bank of Sri Lanka (MBSL) group reported an income growth of 22% to reach Rs. 3.8 billion.

Assets under management of the bank as at end of 2012 was Rs. 12 billion and the group assets were Rs. 22.5 billion representing an asset growth of 21.7% and 17.1%. This significant achievement was possible amidst difficulties and challenges brought on by the volatile domestic and international market.

As a result of the bank's comprehensive branch expansion drive in 2012, it led to an unprecedented opening of 16 new branches and extension offices in one day thus expanding the network to thirty. The negative performance of the stock market has also had a pessimistic impact not only the performance of the associate company, Lanka Securities Ltd., but also on the returns on investments in quoted shares. Rising interest rates further deteriorated the profitability of the bank for 2012.

MBSL Savings Bank which was acquired for revival also had a negative impact on the group profit due to inadequate capital.

Although, a considerable expenditure is to be incurred on the network expansion, this will bring in better results in the years to come despite the negative impact on the profitability of the bank for 2012.