MBSL turns around in 2Q, 2015

The Merchant Bank of Sri Lanka and Finance PLC (MBSL) demonstrated a remarkable turnaround in performance during the quarter ending June 30, 2015 to record a net profit of Rs. 92.44 million, compared to a loss of Rs. 30.26 million in the corresponding quarter of last year.

Meanwhile, the MBSL Group (comprising of MBSL and its subsidiaries) also posted strong recovery to achieve a net profit of Rs. 95.07 million, compared to a loss of Rs. 46.01 million the previous year.

The robust growth in performance is an attestation to the inherent soundness of the Group's growth strategy.

Organisation-wide efforts to develop a unified operational model, priming the organisational objectives to meet the ever changing market needs synergized the whole process to create win-win options. Clear directions given by a professional board paved the way for the achievement.

During the quarter, MBSL focused on consolidating and optimising the branch network to generate positives arising from multiple business lines. Accordingly, three branches were relocated during the quarter while two city branches were merged.

The Group further widened the product portfolio, with the launch of a special leasing scheme for hybrid vehicles.

The Group generated a total income of Rs. 1.32 billion during the quarter, enabling an expansion in net interest income, which grew 7.6% during the period to Rs.503.01 million. Meanwhile, Group net operating income also recorded robust growth of 24.8% during the quarter to Rs. 520.66 million.

Concerted efforts were made to strengthen recovery and improve credit risk management measures, resulting in the Group's impairment losses dropping substantially to Rs. 88.62 million, from Rs. 208.41 million the previous year corresponding period.

Increased efficiencies and emphasis on cost rationalisation enabled MBSL to reduce its total overhead costs by 7.0% during the quarter, adding a further boost to profitability.