LOLC joins the trillion club
View(s):The LOLC Group has crossed the Rs. 1 trillion mark with total assets reaching Rs 1.008 trillion as at December 2018, the company announced on Monday.
“This significant achievement is on account of the group’s consistently resilient financial sector – both local and international, coupled with its strategic investments in non-financial sectors – Leisure, Plantations, Construction, Healthcare, Trading and Manufacturing,” it said in a media release
Nine months’ post-merger, LOLC Finance PLC (LOFC), the flagship finance company of the Group, together with Commercial Leasing and Finance PLC (CLC) and LOLC Development Finance PLC (LDFC) (formally known as BRAC Lanka Finance PLC), contributed 29 per cent to the total assets with a combined asset base of Rs. 297 billion.
The total lending book of the three finance companies, reached Rs.216 billion while the total interest income reached Rs. 44 billion for the nine months ended December 2018, an increase of 6 per cent compared with the comparative period.
Over the years, LOLC’s proficiency and experience across a range of specialties in the Sri Lankan business landscape raised its global profile, providing the impetus to venture overseas.
LOLC’s maiden overseas investment, PRASAC Microfinance Institution Ltd (PRASAC), the largest microfinance company in Cambodia, has made a significant contribution to the group. In 2007, LOLC was invited to invest Rs. 62 million to acquire a 19 per cent stake in PRASAC, a key performer in the dollarised Cambodian economy. This was the first step taken in line with LOLC’s long term vision to propagate its unique business model in microfinance beyond the shores of Sri Lanka. The value addition of this investment is further reinstated when LOLC increased its holding from 19 per cent to 70 per cent over the years. Today, PRASAC has a lending book of Rs. 354 billion, Rs. 236 billion in deposits, Rs. 435 billion in total assets and a customer base of 400,000. “With a staggering profit contribution of Rs. 10 billion (for the nine months ended) to the Group, PRASAC stands strong with LOLC at the helm,” the statement said.
Diversifying its portfolio by expanding regionally has offered LOLC resilience, financial stability and a well spread risk profile, which had enabled the group to stride ahead with consistent performance even during turbulent times in the local economy. Thus, LOLC rapidly expanded its regional microfinance footprint to Myanmar, Pakistan, Indonesia and Philippines over the years.
In 2017, the Government of Pakistan and the Sultanate of Oman, invited LOLC to take up the major shareholding of their joint venture, Pak Oman Microfinance Bank Ltd (PakOman), in recognition of LOLC’s outstanding contribution to the microfinance community. Today, PakOman is rapidly growing to become an important player in Pakistan, an economy with a population of over 200 million.
LOLC concluded 2018 with its investment in Philippines. LOLC ASKI Finance and LOLC Development Bank, both carefully identified for its strategic locations, where the former will penetrate the northern part and the latter with the central and southern part of Philippines archipelagos.
Today, the foreign investments in financial services sector account for Rs. 560 billion as total assets in the books of LOLC and have contributed a PAT of Rs. 12.7 billion to the group for the nine months ending December 2018. The lending portfolio of the foreign businesses amounts to Rs. 450 billion with a deposit base of Rs. 280 billion. “Therefore, LOLC is determined to further penetrate the Asian markets whilst exploring opportunities in other regions such as Africa,” it said.
Kapila Jayawardena, Group Managing Director of LOLC, noted that: “It is a great achievement for our group to cross the trillion mark in total assets. We now have a balanced and diversified investment portfolio and will pursue to invest further into selected markets in Asia and other emerging regions with the objective of enriching the livelihoods of the small and medium entrepreneurs.”