Corporate news

LOLC Group income doubles in three months

The LOLC Group reported strong growth for the second quarter with income for the three months almost doubling when compared with the corresponding period of the previous year.

The Group’s income for the three months increased by 96% to Rs. 2,706 mn from Rs. 1,381 mn. The income for the six months increased by 76% as against the previous year to Rs. 4,666 mn.

The financial product portfolio offered by the LOLC Group includes finance and operating leases, hire purchases, loans, Islamic financing, debt factoring, invoice discounting, working capital loans and micro finance loans as well as insurance brokerage services, savings and fixed deposits, resident and non resident foreign currency accounts (RFC and NRFC). The fleet management services offered by LOLC includes vehicles for short term as well as long term hire.

The Group’s operating profit before net interest cost for the quarter more than doubled to Rs. 1,954 mn from Rs. 896 mn last year, an increase of 118%. The operating profit for the quarter increased to Rs. 314 mn, an increase of 174% from the previous year. The profit after tax for the quarter increased to Rs. 279 mn after providing Rs. 78 Million as corporate tax.

The Group’s operating profit before net interest cost for the six months to September increased to Rs. 3,267 Mn from Rs. 1,749 Mn last year, an increase of 87%, while the profit after tax increased by 55% to Rs. 425 Mn.

The LOLC Group’s provisioning for doubtful debt for the quarter was at the same level as last year, at Rs. 77 Mn and the provisioning for the six months was Rs. 150 Mn with greater emphasis placed on collections and containing non performing loans.

The Group’s net interest cost for the six months increased by 97% to Rs. 2,818 Mn due to the increase in interest rates as well as increase in borrowings supporting the growth. However, the LOLC Group was able to contain its interest expense through borrowing from foreign financial institutions at a lower cost than borrowing locally. LOLC is one of the few institutions in Sri Lanka with direct access to such funding opportunities due to its financial stability and strength.

LOLC’s fully owned subsidiary, Lanka ORIX Finance Company received approval from the Central Bank of Sri Lanka to mobilise foreign currency deposits, in addition to mobilising local currency deposits, a first for the nonbanking financial sector.

Deposits mobilised from customers nearly doubled when compared with the previous year to Rs. 4,583 Mn, displaying the sustained confidence of the public in the Company as a reliable and stable institution even in times of turbulence. The ATM card for savings deposit holders was launched in September, and depositors can withdraw cash from over 343 Commercial Bank ATM, or from the company’s own ATM at the LOLC head office in Rajagiriya.

Seylan Bank’s new board assumes duties

Eastman Narangoda, the newly appointed Chairman of Seylan Bank PLC along with the new members of Seylan’s Board comprising Nihal Jayamanne PC, Lalith Withana and Naomal Gunawardena assumed duties in the new year by lighting the oil lamp at the Ceylinco Seylan Towers.

The Chairman told the staff that the other members of the Board of Directors and he would provide guidance and directions to make Seylan a stronger bank and a leading player in the financial services industry and expressed confidence that this new partnership will drive the bank to greater heights.

Nihal Jayamanne PC also spoke. Thereafter, the Board of Directors and the senior management of Seylan Bank led by Ajita Pasqual, Chief Executive Officer partook of traditional new year milk rice and other sweetmeats.

The Board of Directors also met the Corporate Management and outlined the steps for the future.

DFCC Vardhana Bank expands board

DFCC Vardhana Bank (DVB), the everyday banking unit of DFCC Bank, appointed L.H.A. Lakshman Silva and Lalit N. de Silva Wijeyeratne to its Board of Directors. Silva brings with him extensive expertise in development and commercial banking while Wijeyeratne adds on expertise in financial and general management.

“We are proud to have Lakshman Silva and Lalit Wijeyeratne join our Board of Directors,” said L.G. Perera, Managing Director and CEO of DFCC Vardhana Bank.

“The wealth of experience and knowledge they will add to our Board gives us every opportunity to capitalise the banking industry.”

Silva and Wijeyeratne join the DVB board which now comprises eight members. As such, it plays a critical role in setting the organisation’s agenda as well as establishing legislative issues and priorities.

Lakshman Silva is the Senior Vice President of DFCC Bank Ltd and also the Chief Operating Officer of DFCC Vardhana Bank. He was previously the Vice President, Corporate Banking Division of DFCC Bank Ltd and also served as Manager/Vice President - Colombo Office, Kurunegala and Matara branches.

Central Finance A+ (lka) rating reaffirmed

On the eve of the 51st anniversary of Central Finance Company PLC (CF), it maintains the best rating among the Registered Finance Companies.

Fitch Ratings Lanka has affirmed the Company’s National Long-term rating at ‘A+ (lka)’. “The Outlook is Stable”, Fitch Ratings Lanka, said in a press release.

A company spokesman said, “In continuing to enjoy the A+(lka) rating for the past three years, Central Finance has proved its strong financial position, good asset quality, solvency and strong capital position relative to peers in the financial sector”.

Over the past half century, Central Finance has expanded to become one of the most respected financial services companies in the country. Starting with a modest capital of Rs. 170,000, CF currently has Shareholder funds of Rs. 6.6 billion as at end September 2008. Profit after tax has exceeded a billion rupees in the past three years recording Rs. 1,048 million in 2007/08, increasing from Rs. 1,024 million in the previous year.

Operating income increased from Rs. 1,003 million to Rs. 1,066 million in 2007/08. Prudent financial polices in addition to complying with guidelines and norms specified by the Central Bank of Sri Lanka (CBSL) has supplemented the inherent strength of the Company.

A consistent policy of re-investment of earnings continue to strengthen its capital base, which is the highest in the sector.