Sri Lanka’s oldest Non-Bank Financial Institution (NBFI) The Finance Company PLC (TFC), which completed 74 years in operation in financial year 2013, says its losses during the period had mounted due to the drop in the interest income, where the decline in the pawning income was the main contributing factor. The Company during the year ended 31st March 2014 has made a loss after income tax reversal of Rs.1.8 billion against a loss of Rs.1.5 billion reported in the previous year, financials showed. The Company’s interest income dropped by 5 percent YOY compared to an increase of 6 percent recorded in year 2012/13.
“The interest expenses also increased during the year under review by 11% due to the increase in the time deposit intake and the total operating expenses increased marginally by 4%,” TFC Managing Director Aruna P Lekamge said.
He noted that drop in pawning income owing to the downward trend in the market prices of gold was the main contributing factor for the marginal drop recorded whilst the Company expects an increase in pawing income with the upward trend reported in the last quarter of 2013/14.
“The future strategy of the Company is to build up a low cost funding base and to look at new avenues of increasing its lending portfolio to the SME Sector whilst disposing the current real estate stock and investment properties. The Company will also look into joint property development projects on the mega lands projects and properties belonging to the Company thereby converting the non-yielding real estate portfolio to yielding portfolio,” Lekamge, who took over as the Managing Director in May 2014.
In May 2014, Sri Lanka’s financial sector regulator, the Central bank of Sri Lanka announced the commencement of the second phase of the restructuring program for the Company and that a credit line has been arranged for the Company of Rs.6 billion from the Sri Lanka Deposit Insurance and Liquidity Support Scheme in keeping line with the envisaged business model. Further, to implement the future conduct of business under new restructuring plan a new Board was also appointed.
“The Company, started off its operations under the new management with a short-term plan initially drawn up for three months, in order to gear its business activities to the level envisaged to achieve with the volumes once the funding is received. The Board and management of the Company is preparing the five year business plan to be submitted to the Central Bank. The Company has also introduced new products such as Revolving Business Loans, Personal Loans and Top-up Loans in order to penetrate the markets and venture into new avenues of increasing the Investment portfolio,” Lekamge said pointing out that the notable gain that was achieved during the year under review was the Company being able to win the tax appeal made to the Tax Appeal Commission which resulted in a net positive gain of Rs.401 million.
“The Real Estate Income was the main contributor for the increase in total other income by 4% compared to a drop of 63% recorded in the year 2012/2013. The continued customer confidence in the Company is evident from increase in the Public Deposits by Rs.1.88 billion during the year under review,” the newly appointed MD added.
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“The interest expenses also increased during the year under review by 11% due to the increase in the time deposit intake and the total operating expenses increased marginally by 4%,” TFC Managing Director Aruna P Lekamge said.
He noted that drop in pawning income owing to the downward trend in the market prices of gold was the main contributing factor for the marginal drop recorded whilst the Company expects an increase in pawing income with the upward trend reported in the last quarter of 2013/14.
“The future strategy of the Company is to build up a low cost funding base and to look at new avenues of increasing its lending portfolio to the SME Sector whilst disposing the current real estate stock and investment properties. The Company will also look into joint property development projects on the mega lands projects and properties belonging to the Company thereby converting the non-yielding real estate portfolio to yielding portfolio,” Lekamge, who took over as the Managing Director in May 2014.
In May 2014, Sri Lanka’s financial sector regulator, the Central bank of Sri Lanka announced the commencement of the second phase of the restructuring program for the Company and that a credit line has been arranged for the Company of Rs.6 billion from the Sri Lanka Deposit Insurance and Liquidity Support Scheme in keeping line with the envisaged business model. Further, to implement the future conduct of business under new restructuring plan a new Board was also appointed.
“The Company, started off its operations under the new management with a short-term plan initially drawn up for three months, in order to gear its business activities to the level envisaged to achieve with the volumes once the funding is received. The Board and management of the Company is preparing the five year business plan to be submitted to the Central Bank. The Company has also introduced new products such as Revolving Business Loans, Personal Loans and Top-up Loans in order to penetrate the markets and venture into new avenues of increasing the Investment portfolio,” Lekamge said pointing out that the notable gain that was achieved during the year under review was the Company being able to win the tax appeal made to the Tax Appeal Commission which resulted in a net positive gain of Rs.401 million.
“The Real Estate Income was the main contributor for the increase in total other income by 4% compared to a drop of 63% recorded in the year 2012/2013. The continued customer confidence in the Company is evident from increase in the Public Deposits by Rs.1.88 billion during the year under review,” the newly appointed MD added.
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