Corporate

MBSL to focus on micro credit

"Merchant Bank of Sri Lanka (MBSL) will focus more on giving micro credit, said its newly appointed Chairman, M.R. Shah.

He said that the bank will focus on giving more micro loans in the sectors of small industries, entrepreneur development as well as for agriculture. Rather than giving large loans it is much viable to give micro loans as the risk factor is less and benefits a larger number of people directly contributing to enhance the GDP.

The bank has decided to open a branch in Vavuniya. The focus is on opening more branches to expand the business. The bank already has a branch in Trincomalee while and is on the look out for premises in Batticaloa to open a branch there.

Shah said that he doesn't believe in sustaining the market. Instead he wants to develop the bank and make its products affordable to cater to a large segment of the population.

By expanding branch network and extending services he is confident that the bank can contribute a larger share to the GDP while ensuring a better return for shareholders.

As chairman, he will ensure transparency, good governance and most importantly a better return for the shareholders who have faith in the bank.

Developing young talent is a priority. Proposals made by the staff to develop the bank will be considered.

MBSL is engaged in leasing, trade finance, corporate advisory and capital markets, corporate secretarial services and in finance and treasury management.

The bank has branches in Galle, Kandy, Kurunegala, Maharagama, Anuradhapura, Negombo, Trincomalee, Ambalantota and Colombo.

The subsidiaries and associates of the bank are Merchant Credit of Sri Lanka, MBSL Savings Bank Ltd, MBSL Insurance Company Limited and Lanka Securities (Pvt) Ltd.

The 28th AGM of the bank was held on June 16 where shareholders welcomed the new chairman. SG

LB Finance PAT increases by 39.09%

The profit after tax of LB Finance grew by a healthy 39.09%. Further, Tier I and Tier II Capital requirements were more than comfortably met said the Chairman B.M. Amarasekera.

The NPLs declined from 1.70% in 2008/09 to 1.05% during the year 2009/10. The total asset growth was 22.67%.

Growth in our deposit base was also stimulated by the policy shift which influenced banks to significantly reduce their rates for public deposits.

Thus, deposits became the mainstay of our funding base, with deposit liabilities accounting for 73% of total funding needs compared to 68% in the previous year.

Post-conflict optimism in the market subsequent to the decisive end to the war on 18th May 2009 caused a surge in accommodations granted. This momentum helped make up for the lacklustre demand in the first quarter.

LB Fiance's strategy was volume driven with a larger numbers of small leases. This helped us to spread our risks, expand our customer base and contribute to economic development across diverse industries.

Expansion into the newly liberated areas in the North and East occurred within weeks after the end of the conflict. The Eastern province was covered by branches in Ampara, Trincomalee and Batticaloa while our Anuradhpura branch serviced Vavuniya in the North.

Our presence will no doubt contribute to activating livelihood initiatives and bringing these war-torn regions into the development mainstream.

The company also set up 3 branches in the Western province - in Kiribathgoda, and Dehiwela and in the North Western Province in Chilaw. Our expanded delivery network helped us respond to the mammoth growth in our lending portfolio, as well as volume led growth in the micro financing segment of pawning.

The strategies of the past enabled LB Finance to maintain over 95% of assets as income generating, liquid investments such as leases, hire purchases and pawning advances. Buoyed by the stability of our cash flows and the bold decision taken during the critical period, investor confidence in our company soared despite the liquidity crisis faced by the rest of the industry said Managing Director, Sumith Adihetty.

A healthy growth in deposits - especially during our customary 'Avurudu Ganu Denu' in April made up for the slow growth experienced during the first quarter of this financial year.

This growth in deposits, made up for the 30.28% drop in bank borrowings experienced by us, as Banks were somewhat hesitant to lend to the sector. Bank borrowings accounted for only 7% of total liabilities as at end 2009/10, compared to 12% the previous year.

Entry into new products and markets are on the cards. Islamic Finance - which is under serviced by the financial services sector at only 20%, will be launched. We will also move into flexible rental products and equipment finance for the agriculture sector which have already been test-marketed in Ampara, Anuradhapura and Polonnaruwa, said Adihetty.

Plans are underway to expand our reach to customers from the entire Northern Province within the first two quarters. As in the past, management of human resources will always stay at the core of growth plans.

CDB revenue Rs.1519 Mn

Citizens Development Business Finance Ltd's (CDB) pre-tax profit (annualised) for the Financial Year ending March 2010 crossed the Rs. 71 Mn mark, while net profit after tax (annualised) crossed the Rs. 64 Mn mark, as per the audited accounts for the financial year ending 31 March 2010. Though figures reflect marginal declines of 0.34% and 2.5%, CDB considers the figures reflect a satisfactory performance, given the context it operated in.

Revenue (annualised) recorded a figure of Rs. 1519 Mn, while net interest income increased by 19.7% or Rs. 404 Mn to Rs. 483 Mn (annualised) in 2009/2010. CDB's total Asset Base stands at Rs. 6676 Mn as at 31 March 2010. CDB Net Assets recorded over Rs. 513 Mn as at 31 March 2010.

All business units contributed significantly and substantially towards this performance.

At the end of the review period, CDB's NPL ratio stood at 7.52%, well below the industry average. CDB's Director/GM/CEO Mahesh Nanayakkara said, "Our results are based on intrinsic fundamentals such as our customer-centric business approach, performance-driven culture, an organic integration of our people with our business, and, our commitment to enterprise governance."