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| Abans Financial Services records rapid growth in public deposits |
By Gayani Perera |
The core business of Abans Financial Services Limited (AFSL) is in the areas of Hire Purchase and Finance Leasing and accounts for over 80% of its total lending portfolio. With regard to its deposit mobilization, AFSL recorded a public deposit base of Rs. 586 million in April 2009 which has grown up to Rs. 780 million by 31st December 2009, thereby regaining its momentum in the mobilization of public deposits during the past few months. The Sunday Times Free Hold Supplement spoke to Ms. Mano Alles Managing Director, Mr. Kithsiri Wanigasekara, Executive Director and Ms. Sanjeevi Dharmasena, Head of - Fixed Deposits of AFSL to find out more about the company's rapid deposit growth.
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| Mr. Kithsiri Wanigasekara, Executive Director |
Mrs Ms. Mano Alles Managing Director |
Ms. Sanjeevi Dharmasena, Head of - Fixed Deposits of AFSL |
"When one analyzes the trend in the inflow of new deposits for this period, we have recorded a growth of around 36% that can be considered as a remarkable achievement for our company taking into consideration the sudden decline in deposits experienced up to May 2009. The month of September 2009 has been the month in which we experienced our highest growth in our deposit base, which amounts to a net increase of Rs. 50 million. I can safely say that the confidence the public placed in our company has increased, significantly. The sudden decline in bank interest rates has also had a positive impact on our deposit growth", says Mr. Wanigasekara.
While bank interest rates currently stand at 7% to 8%, AFSL will be offering a very attractive interest rate of 13% for deposits up to one year and up to 15.75% for deposits over one year.
With regard to building operations in the outstation areas, AFSL has expanded its branch in the Kandy area with the intention of mobilizing more deposits from the Kandy District and also thereafter build up operations in the Central and North Central Provinces, especially in areas of Kurunegala, Dambulla and Anuradhapura. The company is also focusing on further extending its outreach to the areas of Batticaloa, Trincomalee and Jaffna. Expansion will not be a major area of concern for AFSL due to the fact that its parent company, Abans Limited has a branch network of over 300 branches located island wide, which acts as a catalyst in its regional expansion.
"We are confident that we will be able to consolidate our position and enhance our profitability in the future by building up our lending operations and public deposit base. What we currently require is the proper interest margins to operate. In the past we have been taking deposits at higher rates but the current market rates are on the decline. Due to the fact that AFSL is a sound and stable financial institution, it has no liquidity problems", further stated Mr. Wanigasekara.
Commenting on the company's recent achievements Ms. Alles said, "The collapse of certain financial institutions severely affected the country's financial sector. Although we did not experience a run on our deposits during this period, we did experience that customers were nervous about renewing their deposits and new investments were also slow due to the uncertainty of the financial services sectors. However during the last few months we have achieved a tremendous growth and we have felt the public has regained their trust in us despite all that has happened in the industry. Overall, the future looks very bright for AFSL and we are confident of achieving our set goals and future endeavours with renewed confidence and commitment".
Ms. Dharmasena, who played a very dominant role in building up the company's customer deposit base said, "We are focusing on building our deposit base to reach Rs. 1 billion mark by the end of this financial year. With the fall of certain financial institutions the public lost faith in the entire financial and banking services sectors, thus resulting in many panic withdrawals taking place. However from June last year our company regained the confidence and trust of the general public which resulted in an upward trend in our public deposits. We have also experienced that the majority of individuals in anticipation of gaining higher rates are maintaining a wait and see policy with regard to deposits until after the upcoming elections."
AFSL so far is experiencing progressive growth despite the turbulent environments and the country's upcoming elections. Whatever outcome that may occur in the country, the company still remains to be strong and stable and will continue to be so in the future as well. |
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