Why intrude into our areas of activity - asks MBSL

The Merchant Bank of Sri Lanka (MBSL), which has reported its highest ever profitability in 2006, has raised issue over commercial banks intruding into merchant banking and leasing activities.

“One of our main concerns is commercial banks embarking on merchant banking activities and promoting leasing to their clients. This is considered as the major threat," CEO Gamini Karunathilake said in a company statement announcing the 2006 results.

Other challenges and concerns for 2007 were the increase in interest rates and the outbreak of hostilities in the north and east are also of grave concern. But Karunathilake said these are issues faced by all players in the market and was confident that MBSL can ride through these rough patches.

The company has regained the status of a billion-revenue group and a satisfactory improvement in its asset quality on its 25th anniversary year.

Karunathilake said that progress to this level was enriched with opportunities through which MBSL took part in the socio-economic development of the country.

“On the other hand, our strength in resilience was underscored through the many challenges that MBSL withstood to preserve its stakeholder interests,” he added. MBSL’s total income in 2006 reached Rs 704 million, up 31% from Rs 539 million in 2005.

The net profit attributable to the company also increased by 32% to Rs 210 million, MBSL's highest net profit so far.

The total net lending portfolio, which amounted to Rs 3.5 billion as at end 2006, expanded by 9% during the year while gross disbursements to the customers by the company during the period recorded a growth of over 20%.