SMB Leasing offered funding options by many banks
View(s):Several leading local and foreign commercial banks came forward in offering funds of Rs.500 million to SMB Leasing PLC in 2018.
“The company continues to work closely with these financial institutions to secure further low-cost funding in the long term. A significant reduction in improvement in funding costs is inevitable if the company is to further penetrate the market,” according to company CEO Sumedha Fernando in his review in the company’s end 2018 annual report.
Company Chairman Ravi Wijeratne said SMB Leasing PLC performed exceptionally well in the backdrop of adverse global and local economic conditions demonstrating a significant growth trajectory in profitability levels. “The company reported a profit after tax of Rs. 85.7 million reflecting a 130 per cent increase compared to last year. Our asset base also increased to Rs.1.7 billion in 2018. The company maintained a healthy liquidity ratio, a return on equity ratio and an outstanding capital adequacy ratio,” he said in his review.
In the current financial year, the company has not only converted its previous years’ impairment losses into profits, but also has emerged to a stronger position both in terms of financial stability and in terms of laying the groundwork for growth in 2019 and beyond, he said.
Sri Lanka’s GDP recorded a growth of 3.2 per cent for 2018 with cascading effects to the financial sector. Despite challenging market conditions both globally and domestically, the financial sector continued to expand moderately during the year without causing any major macro-prudential concerns, he said.
“We look forward to 2019 with optimism on the back of a strong 2018 performance. Despite the short term moderation in the economic growth, Sri Lanka’s economic growth trajectory is expected to gradually improve in the medium term and we believe the long term outlook remains promising. We have redefined our business model to withstand existing as well as expected economic challenges and maintain and strengthen our share in the market,” the chairman said.
Its CEO said that SMB Leasing has the highest priority for ethics, compliance and discipline which makes it a unique entity in Sri Lanka’s non-banking financial sector. The company continues to comply with all legal and regulatory requirements in 2018 maintaining the unblemished compliance record demonstrated since 2012. On NPLs (non performing loans), the CEO said that NPL provisions of over Rs. 18 million that were made last year have been reversed in 2018 showcasing the efforts of the recovery team that followed up these facilities with rigour and dedication.
“From the lessons learnt from the past NPLs, the credit evaluation process has been refined and strict qualifying criteria was implemented in 2018 especially for granting of loans,” he said.