In the current financial situation in Sri Lanka, the leading finance company, In the backdrop of current macro economic challenges in Sri Lanka, Central Finance Company PLC (CF) is performing well has reported successful operational results, for the 9 months ended 31st December 2008. The results during the nine months ending December 2008, just released, record an encouraging performance with total assets increasing, Total assets stood at Rs 31.2 Billion as compared with Rs 29.4 Billion in 2007 (April-December) whilst deposits increased from Rs 12.3 Billion to Rs 13.3 Billion. Profit before tax recorded Rs 1,277 million as compared with 1,210 m in the previous year.
Highlights for the period under review were an increase of 16% in income over the comparable period generated through its core business activities. Profit before tax was Rs 1.04 Billion (increase of 6.4% over corresponding period), while after tax profits recorded a marginal (0.9%) drop to Rs 732 Million due to higher taxation (Rs 316 Million compared to Rs 214 Million). Sound treasury management practices have resulted in containing funding costs at 22%, which is significantly better than its peers.
Despite the expansion of business activities, overhead cost increases have been contained to a mere 6.7% (of which 2.1% includes VAT on financial services) over the comparable period. Shareholder funds continued to grow recording an increase of Rs 660 Million and stands at Rs 6.825 Billion. Fitch Ratings Lanka, recently affirmed the Company's National Long-term rating at 'A+ (lka)' with the comment 'The Outlook is Stable'.
"Well defined credit policies and stringent recovery procedures have translated into asset quality that is amongst the best in Registered Finance Company (RFC) sector in Sri Lanka," Fitch Ratings stated. Now in its 52nd year, Central Finance has been recognized as one of the most respected financial services companies in the country. Whilst Fixed Deposits continue to grow, there is also a satisfactory expansion in Savings Accounts Operations, which have been further supplemented with the recent link-up with the Commercial Bank network of over 300 ATMs islandwide. Confirming the stability of the Company, Assistant General Manager (Deposits), Aruna Rajanayake says that while the Company appreciates the relief package offered by the Government, Central Finance has not applied for any relief. "There is enormous shareholder backing available to depositors. Meanwhile, just as much as Fixed Deposit customers continue to invest in the Company, another encouraging sign is the growing interest in opening savings accounts," he adds.
Referring to lease facilities, he points out that lease business has recorded an increase in recent months and the Company continues to provide this service to customers.
During the period under reviewThe fact that, FMO, a financial institution owned by the a Dutch Government extended an Euro 6 Million, owned financial institution is providing a large long-term credit facility on attractive terms, as a further endorsement of the Company's financial strengthstrong and stable reputation, he says.
"Complementing the normal lending operations, the company has also initiated several promotional campaigns in association with strategic partners. Specially of note are the mega-promotional events scheduled in Ampara, Dehiattakandiya and Anuradhapura over the next 3 months" stated a company spokesperson. Also, depositor confidence in the Company is demonstrated with the very high renewal ratios. He stresses that the Company always ensures substantial operating reserves as part of its liquidity and risk management procedures.
With a network of 50 branches already serving customers in different parts of the country, Central Finance hopes to expand the network in the coming months, and the. The fast developing Eastern Province has also been earmarked for expansion. subject to permission being granted by the Central Bank. |
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