Ceylon FT: First Capital Holdings PLC reported a group net profit of Rs 263 million for the nine months ended December 2013, up 15% from a year ago, interim financial results showed.
Earnings per share amounted to Rs 2.46, up from Rs 2.10 a year ago.
The gain in profits was largely due to 'higher gains on sale of trading securities, partly offsetting higher administrative expenses', an official of the company said.
"First Capital Treasuries Limited, the group's primary dealer arm was again the primary source of revenue, taking advantage of interest rate movements and exceeding targets.
"We were able to hold strategic trading positions in the primary dealer business and benefited through the continuous reduction of policy rates made by the Central Bank of Sri Lanka (CBSL). Both the Standing Deposit Facility Rate (Repurchase) and Standing Lending Facility Rate (Reverse Repurchase) were reduced by 1% and 1.5% respectively during the period under review. Currently the Standing Deposit Facility Rate and Standing Lending Facility Rate stand at 6.50% and 8.00% respectively.
"In the light of relaxation of governing protocols relating to primary dealer operations and the issue of new licences, the competition is now more intense.
We have taken steps to protect our human resource base and to aggressively maintain and build on our client relationships.
"First Capital Limited continues to seek mandates in the listed corporate debt market and we expect to close some mandates in the last quarter of 2013/14. First Capital Asset Management Limited has been undertaking many sales calls across a wide range of personal and institutional clients and we expect to keep growing our assets under management, especially in the unit trust business.
"There was muted activity in the stock market and we struggled to make both brokerage and margin trading revenues. However, we have seen a minor bounce back in January 2014 and we hope this will continue and increase during the rest of the year.
"The group continues to explore other business opportunities, especially in the corporate advisory space and will also remain committed to managing risk effectively and being fully compliant with regulations at all times.
Turnover grew 15% to Rs 1.33 billion with net trading income amounting to Rs 398 million, up 23% from a year ago.
Earnings per share amounted to Rs 2.46, up from Rs 2.10 a year ago.
The gain in profits was largely due to 'higher gains on sale of trading securities, partly offsetting higher administrative expenses', an official of the company said.
"First Capital Treasuries Limited, the group's primary dealer arm was again the primary source of revenue, taking advantage of interest rate movements and exceeding targets.
Other business segments like structuring and placement of corporate debt securities and investment management (Corporate Debt Securities) also contributed to the results, although performance was below expectations," First Capital Holdings PLC CEO/Director Jehaan Ismail told shareholders.
"We were able to hold strategic trading positions in the primary dealer business and benefited through the continuous reduction of policy rates made by the Central Bank of Sri Lanka (CBSL). Both the Standing Deposit Facility Rate (Repurchase) and Standing Lending Facility Rate (Reverse Repurchase) were reduced by 1% and 1.5% respectively during the period under review. Currently the Standing Deposit Facility Rate and Standing Lending Facility Rate stand at 6.50% and 8.00% respectively.
"In the light of relaxation of governing protocols relating to primary dealer operations and the issue of new licences, the competition is now more intense.
We have taken steps to protect our human resource base and to aggressively maintain and build on our client relationships.
"First Capital Limited continues to seek mandates in the listed corporate debt market and we expect to close some mandates in the last quarter of 2013/14. First Capital Asset Management Limited has been undertaking many sales calls across a wide range of personal and institutional clients and we expect to keep growing our assets under management, especially in the unit trust business.
"There was muted activity in the stock market and we struggled to make both brokerage and margin trading revenues. However, we have seen a minor bounce back in January 2014 and we hope this will continue and increase during the rest of the year.
"The group continues to explore other business opportunities, especially in the corporate advisory space and will also remain committed to managing risk effectively and being fully compliant with regulations at all times.
We are thus confident that we are well on the way towards becoming a full-fledged investment bank,"Ismail said.
The group's assets stood at Rs 15.5 billion as at end December 2013, compared with Rs 13.9 billion a year ago, with financial investment held for trading amounting to Rs 12.2 billion, up from Rs 7 billion a year ago.
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