Multi Finance profits up 120% in the first quarter 2014/15

Multi Finance PLC recorded a 120 per cent increase in its bottom line in the first quarter ended 30th June 2014 recording a net profit of Rs. 8.6 million against a loss of Rs. 39.2 million loss in the preceding quarter 2013, as per published accounts. During the quarter under review, net income from operations reached Rs. 56.2 million, up 236 per cent compared to the quarter ended June 2013 which was recorded as Rs. 16.7 million.

The net interest income for the quarter ended 06/14 also increased by 215 per cent reaching Rs. 50.5 million compared to Rs. 16 million in the same earlier quarter owing to improvements in quality lending and strict credit processes introduced.

Operating expenses of the company fell to Rs. 32.3 million as against Rs. 40.3 million, a 19.8 per cent improvement owing to strict cost control mechanisms adopted.

The company’s total assets grew by 3.5 per cent to over Rs. 1.38 billion as of 30th June 2014 while the deposit base grew by 9.8 per cent over the same quarter of the previous year

Commenting on the company’s improvement, Multi Finance Chief Executive Officer Pushpike Jayasundera said the introduction of prudent credit policies, risk management tools and stringent recovery processes were the key factors that contributed to the significant results in the quarter. These results were achieved in the midst of interest rate pressures and slowdown in credit growth which was common to the industry during the period concerned.
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CIFL depositors face new crisis

By Quintus Perera

Depositors of the failed Central Finance and Investments (CIFL), given some hope by the Central Bank (CB), have been stumped by a possible misunderstanding that their problems are over.

At a recent meeting between the CIFLDA (CIFL Depositors Association) and the CB, the latter appeared to indicate that if the association withdraws its case in court, the CB will find an investor and provide matching funds to revive the company.

Following this ‘assurance’, the depositors withdrew the case and wrote to the CB saying they had kept their part of the bargain, and that “We appreciate your kindness and dedication to release Rs.1 billion loan facility to CIFL for restructuring the company with the help of investors.”

However in response, the CB wrote back saying: “We wish to inform you that this is factually incorrect and it is only stated at that meeting that the Central Bank is in a position to provide funds from Sri Lanka Deposit Insurance and Liquidity Support Scheme (SLDSS) once the company finds a new investor/investors and infuse the required capital to company in line with Financial Sector Consolidation Plan”.

CIFLDA President Wijeya Goonawardena, told the Business Times (BT) that the latest position of the CB is a matter to be of grave concern as the case, now withdrawn, was the only hold they had on the CB.

He said they have received information that CIFL is trying to close down all the branches and centralise all CIFL functions in Colombo and if so there would be nothing left to restructure.

CIFLDA alleges that the invisible hand of Deepthi Perera alias ‘Chulaka Gunawardena’ a Navy deserter and a former CIFL Chairman, is sabotaging the business plan. He said that it is unfortunate that the CIFL restructuring plan is getting regularly delayed and it is high time the Government takes concrete action to expedite the restructure as older depositors will die before they get relief.

The CB has said in the past that it is in discussion with three foreign investors to revive the failed company.
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