The national clearing house for Sri Lanka, jointly owned by the country's Central Bank and all local Licensed Commercial Banks, LankaClear, recently released its 2010/2011 annual report, in which it showed its net revenues had fallen by 12% compared to the 2009/2010 financial year.
This was identified as mainly resulting from "loss in income from front-end services provided by the company to the banks on cheque scanning after all banks [migrated] to the CD submission mode from the physical cheque submission mode in July 2010."
However, the company also noted that, at the same time, it had cut down its "cost of sales by 33% due to this migration and a significant reduction in maintenance costs. The company recorded a profit before tax of Rs. 162 million and a profit after tax of Rs. 91 million." Further, the profit before tax was said to have increased 32% year-on-year.
Additionally revealed, "an impressive net profit margin of 26%, which was an improvement from the previous year’s 21%.
The company also maintained a very healthy debt : equity ratio of 7 : 93. Earnings per share increased from Rs. 5.30 to Rs. 6.04 and Net Assets per Share increased from Rs. 38.72 to Rs. 43.59." Also stated, "items cleared through the Sri Lanka Interbank Payment System (SLIPS) increased significantly by 32% compared to the previous year whilst the value of SLIPS items cleared grew by 19%. The total value of items cleared through SLIPS during the financial year 2010/11 stood at Rs. 346 billion."
Meanwhile, according to LankaClear's statement which highlighted key points from its Annual General Meeting addess by Chairperson Ms. Priyantha Liyanage; "During the year, [Cheque Imaging & Truncation System (CITS)] Settlement Clearing migrated to online mode eliminating the requirement of banks to submit CDs in this leg of clearing. This resulted in LankaClear Inward Return Submission time being advanced to 1.30 PM, facilitating the collecting banks to give good value to customers by 3 PM.
The internal efficiency improvements carried out in the Main Clearing Leg enabled LankaClear to extend the outward item submission time to 7 PM facilitating banks to accept cheque deposits for T + 1 clearing up to the counter closure time of 3 PM... the upgrading of the SLIPS application in September 2010 resulted in complete online submission of items and T + 0 clearing for credit transactions.
With this improvement, the banks are now able to credit customer accounts by 3 PM on the same day on items received by LankaClear by 12 noon and by 9 AM the following day on items received by LankaClear by 6 PM." |
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