Commercial Credit's deposit base grows 90%

Commercial Credit and Finance PLC's, deposit base grew 90% during the financial year ending March 31, 2013. The company's total assets also expanded by 79% during the year under review. "Our gross interest income grew by 62.3% to Rs. 4.0 billion. However, due to the increase in interest expenses during the year, net interest income grew by 38.2% to Rs. 2.4 billion," said CEO of Commercial Credit, Roshan Egodage in the Annual Report of the Company released recently together with its audited financial statements.

He said that the net profit of the Company (PAT) was Rs. 679.4 million, 3.6% above the previous year. The PAT for 2010/11 stood at Rs. 60.1 million while for 2009/10 it was Rs. 45.2 million.

"We are confident that in the coming years all Commercial Credit's service locations will contribute positively towards the profitability of the company," Egodage said.

Chairman of Commercial Credit, Cecil Perera said that the company had expanded its service network substantially to reach all districts. "With this extended service network, Commercial Credit is well positioned to further develop its business activities."

"The success of any organisation is founded on the trust and confidence of customers and we believe that this is particularly so in the case of our company as we are in the financial services industry," he said.

The Debenture Issue of the company, amounting to Rs. 500 million was one of the first listed debentures to be offered under the new tax regulations where interest income earned from such debentures would be exempt from withholding tax and income tax.

CEO Roshan Egodage said, "We are pleased at the interest shown by the public in the Issue, as it was not only the initial issue but the optional number of debentures was also taken up".

Chairman Cecil Perera said, "During the year under review shareholders had the benefit of a capitalisation of reserves where new shares were issued on the basis of 1 for every 10.9 shares held as at March 27, 2013. However, despite the company's income growing significantly, cost increases related to its branch network expansion and increased cost of borrowing resulted in slow growth of profits." He said that with Sri Lanka improving its macro-economic fundamentals and the aspiring growth plan of achieving a per capita income of US $ 4,000 by 2016 well on track, financial institutions such as Commercial Credit that are characterised by innovation, speedy growth and expansion would be presented with many opportunities for further growth.