Thursday 16 November 2017

Sri Lanka’s First Capital Sept quarter net profit up 18.6-pct

ECONOMYNEXT – Sri Lanka’s First Capital Holdings PLC said group net profit rose 18.6% to Rs340 million in the September 2017 quarter from a year ago.

Earnings per share rose 18.3% to Rs3.36, according to interim accounts filed with the stock exchange. The share was last traded at Rs37.

The investment bank’s net trading income rose 188% to Rs517 million over the period, the accounts showed. Income rose 12% to Rs1.16 billion while expenses fell almost 25% to Rs635 million.

EPS for the six months to September 2017 were Rs6.92 with net profit at Rs700 million.

“Whilst we are pleased with our performance to date, we expect earnings to moderate in the 2nd half with interest rates stabilizing resulting in lower trading opportunities for the primary dealer business,” said director and group chief executive Dilshan Wirasekara.

“However, we will continue to work throughout the year towards ensuring that our fundamentals remain strong to sustain our business in the long term. Our main focus is to enhance the fee based activities and the management of risk,” said Wirasekara.

“The primary dealer business dominated the group’s earnings, reporting a profit after tax of Rs538 million for the 1st half (2016/17 – Rs. 371Mn), displaying an impressive performance,” a statement said.

First Capital Treasuries PLC capitalized on opportunities created by declining interest rates in the secondary market, realizing significant trading gains, it said.

With a track record of over 25 years, the company was the first licensed primary dealer appointed by the Central Bank, and is also the only listed and rated primary dealer in Sri Lanka, with a capital base of Rs. 2.2 billion.

“A strategic approach has led to improved activity in the corporate finance business, mobilising Rs. 13 billion for clients through structuring and placement of corporate debt securities,” the statement said.

Fee income rose to Rs. 42 million from Rs. 30 million the previous year.

First Capital Asset Management Limited recorded a “substantial growth” in funds under management to end with Rs. 6.7 billion as at 30th September2017, the statement said.

The group’s equity arm, First Capital Equities, took several steps to strengthen its business by establishing strategic partnerships with brokering houses based in Asia and the United States, in addition to reinforcing its local efforts through the group’s expanding branch network.

The credit rating of First Capital Holdings PLC and First Capital Treasuries PLC was reaffirmed by ICRA Lanka Limited in October 2017 at “A-”.

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