LOLC posts strong profit growth in Q1, 2016/17

LOLC's dominant financial services sector companies, led the Group to record strong profits in the first three months of 2016/17, a PBT of Rs. 3.2 billion when compared to Rs. 2.7Bn recorded in the same period last year.

The current year's performance, strengthened by the outstanding performance of the Group in 2015/16 of Rs. 11.9 billion of PBT, is a 45% growth over the last year.

The financial services companies which account for 82% of the Group's PBT, showed a remarkable growth in terms of an increase in the lending portfolio consequent to the aggressive growth in their lending books.

As a result, the total Asset base of the Group reached Rs. 380 billion. The contribution to the high growth was achieved, resulting a portfolio growth of 52% to Rs. 213 billion from Rs. 140 billion. LOLC, one of the largest conglomerates in Sri Lanka, its core business being financial services, comprises of three finance companies and one leasing company falling under the purview of the Central Bank of Sri Lanka

The flagship finance company LOLC Finance PLC (LOLC Finance), Commercial Leasing and Finance PLC (CLC) and the newly acquired BRAC Lanka Finance PLC (BRAC) together with LOLC Micro Credit Limited (LOMC) recorded a strong financial performance in the year 2015/16 and continued the momentum during the first three months of the current year accounting for 89% of the Group's PBT.

The strong performance was enhanced by the high yielding overseas investments made in LOLC Cambodia, PRASAC Micro Finance Company in Cambodia and LOLC Myanmar.

On the strength of each of the companies, the financial services sector continues to experience a healthy level of portfolio growth in line with the aggressive execution strategy adopted by the Group.

The strong funding flow to the Group from foreign funding sources together with local borrowing enabled a consistent growth.

Further, improved collections by all these companies led to lower provisions for bad and doubtful debts reducing NPLs and strengthening the portfolio quality. The Group companies' NPLs are stronger than that of the industry.

LOLC Finance, operates in the SME to upper micro markets, having a portfolio of Rs. 84 bn lending, backed by one of the largest deposit bases amongst the finance companies in Sri Lanka amounting to Rs. 60 billion.

LOLC Finance's portfolio grew to Rs. 89 bn by June this year, while deposits now stand at Rs. 67 billion, a strong growth of Rs. 7 billion, which demonstrates the confidence placed in the company by its depositors. LOLC Finance is backed by the strong footprint of LOLC's branch network, reaching to all parts of Sri Lanka. LOLC Finance recorded a strong growth in its assets in the year 2015/16, almost double, at Rs. 110 billion compared with the previous year.

The asset base increased to Rs. 116 billion in the first three months of this year.