Sri Lanka Abans Sept net profit up 57-pct

ECONOMYNEXT –Sri Lankan retailer Abans Plc said September 2015 quarter net profit shot up 57 percent to 198 million rupees from a year ago driven mainly by sharply higher earnings from its retail business.

Group sales rose 16 percent to 7.4 billion rupees during the quarter from the year before, a stock exchange filing said.

Earnings per share for the September 2015 quarter were 90.64 rupees with the firm’s profit margins improving and demand for consumer durables rising on the back of higher disposable incomes.

EPS for the six months to 30 September 2015 rose to 291.81 rupees from 92.32 rupees a year ago.

Profits from trading shot up 273 percent to 533 million rupees in the first half from the year before while profit from financial services rose 68 percent to 68 million rupees and that from engineering services doubled to 48 million rupees.

Sri Lanka Softlogic Sept net up 13-pct, retail sales double

ECONOMYNEXT – Softlogic Holdings said group net profit for the September 2015 quarter rose 13 percent to 116 million rupees from a year ago with its retail business sales almost doubling following the acquisition of Odel.

Group sales went up 52 percent to 13.2 billion rupees in the September 2015 quarter from the year before, a stock exchange filing said.

Quarterly earnings per share rose to 15 cents from 13 cents the previous year.

In the six months to 30 September 2015, EPS rose to 26 cents from 19 cents a year ago.

Softlogic Holdings chairman Ashok Pathirage said the group’s retail sector “led the consolidated revenue, post-acquisition of Odel, with a contribution of 33.3 percent for 1HFY16 followed by ICT, especially its mobile phone items, with 28.7 percent.”

“Operating profit achieved a growth of 90 percent to 1.5 billion rupees during the quarter, witnessing a strong margin growth to 11.4 percent from 9.1 percent in the corresponding quarter,” Pathirage said in a statement.

Retail business sales almost doubled to 4.4 billion rupees following Softlogic’s acquisition of retailer Odel PLC in September 2014, he said.

“Increasing footfalls at existing stores and incremental revenues from new stores/ brands demonstrates strong potential for this segment.”

Retail operating profit shot up 137 percent to 428 million rupees in the September 2015 quarter from a year ago, Pathirage said.

The group’s Healthcare and Leisure sectors were adversely affected by the rupee depreciation due to the foreign currency denominated debt in the books.

But he said the leisure sector’s foreign currency receipts constitute a natural hedge.

Pathirage said finance income fell 55 percent to 548 million rupees during the first half, reflecting the impact of falling market interest rates and volatile stock market performance on the investment portfolio of Asian Alliance Insurance.

The “significant improvement” in the ICT business was driven by Samsung mobile handsets, he said.

“The success of the mobile segment will be further boosted with the launch of ‘HTC’ handset range in September 2015.”

Sri Lanka shares fall to over 1-week low amid budget uncertainty

Reuters: Sri Lankan shares edged down on Friday, losing for a fourth straight session to their lowest level in more than a week, led by large caps as speculation and uncertainty over the upcoming budget dented investor sentiment.

Brokers said the day's trading volume was low because investors were on the sidelines awaiting policy direction from the annual budget scheduled for Nov. 20. This week's daily average turnover was around 600 million rupees, around half of this year's daily average.

The main stock index ended down 0.06 percent, or 4.54 points, at 7,001.81, its lowest close since Nov. 3.

"Still the uncertainty remains with regard to the governments economic policy and stability over fulfilling its election promises," said Danushka Samarasinghe, research head at Softlogic stockbrokers in Colombo.

Foreign investors were net sellers of 54.6 million rupees worth of equities on Friday, extending the year to date net foreign outflow to 3.6 billion rupees worth of shares.

The day's turnover was 779.4 million rupees, less than this year's daily average of 1.1 billion rupees.

Shares in Trans Asia Hotels Plc fell 8.55 percent with only 407 shares changing hands, while Nestle Lanka Plc fell 1.14 percent and Commercial Bank of Ceylon Plc lost 0.65 percent, dragging down the overall index. 

($1 = 141.9500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)

Sri Lanka’s NDB net down 32-pct in September

(LBO) Sri Lanka’s National Development Bank PLC reported a 32 percent dip in profits to 855 million rupees in the September quarter of 2015 compared to the same period in 2014, interim report showed.

NDB reported earnings per share of 5.13 rupees for the quarter, interim accounts filed with the Colombo Stock Exchange said.

The Bank’s net interest income fell 7.8 percent to 1.9 billion rupees while interest income fell 2 percent to 5.33 billion rupees and interest expenses rose 1.2 percent in the quarter.

Loans grew 10 percent to 192 billion rupees and customer deposits grew 12 percent to 169 billion rupees, the bank said.

Net assets grew 4 percent to 30.0 billion rupees and gross assets grew 6 percent to 254 billion rupees.

Group capital adequacy fell from 17.5 percent to 16.82 percent. The bank’s total capital adequacy was at 14.20 percent, above regulatory minimum.

HNB 9 months profit up 20% to Rs. 6.8 b

Hatton National Bank PLC (HNB) has continued its strong performance in 2015 with nine months profit after tax increasing by 20.1% YOY over the corresponding period of 2014 to reach Rs. 6.8 b. The bank also reported a considerable growth of 21.6% YOY in assets up to September 2015.

Commenting on the nine months performance, HNB Managing Director/CEO Jonathan Alles stated: “We concluded yet another successful quarter with significant growth witnessed in profits as well as a robust growth in the balance sheet. During the third quarter alone advances and deposits grew by approximately Rs. 35 b which represents an annualised growth of over 30%.

We also supplemented our deposit drive by obtaining long term borrowings from foreign institutions, where we concluded a $ 35 m borrowing with DEG during the third quarter while signing an agreement for a further $ 50 m from Proparco more recently.”

Despite margins continuing to be under pressure, the bank was able to grow its net interest income by 5.6% YOY to Rs. 19.4 b through mobilisation of low cost deposits with growth in CASA reaching 21.8%. The impressive 26% YOY growth in the loan book also contributed towards this end.

Net income from fees and commissions grew by 15.2% YOY to Rs. 4.2 b and was derived mainly from trade financing, guarantee commissions and electronic delivery channels.

Net trading gains/ (losses) showed a significant gain due to the revaluation of forwards and swaps which are taken to hedge the on balance sheet positions. The corresponding impact of the rupee depreciation is shown under other income. Overall the exchange gain for the bank more than doubled in 2015 compared to the corresponding period last year. 

The drop in investment income is due to the absence of a one-off capital gain made in 2014 from the disposal of the bank’s investment in Visa and Master cards.

The collective impairment charge has reduced by nearly Rs. 1 b, on account of significant decline in losses on pawning and lower non performing portfolio. Aggressive and multi-pronged recovery efforts have helped improve the bank’s NPA ratio to 2.98% as at the end of September 2015 from 3.24% recorded in June 2015.

The bank’s focus on cost optimization initiatives continues to reap dividends with the total operating expenses growing by only 7.4% YOY. This has been achieved despite a 14% increase in personnel costs while the increase in other expenses has been contained to 4%.

The improvement in profit after tax by 20.1% to Rs. 6.8 b also enabled the bank to improve its ROA and ROE to 1.45% and 14.62% respectively.

The Group also witnessed steady growth with the newly-acquired HNB Grameen Micro Finance Ltd. and Sithma Development in particular contributing strongly to post a growth in profit before tax of 18.4% to Rs. 10.3 b and a post-tax profit growth of 13%. Total Group assets increased by 23.3% YOY to Rs. 704.4 b.

HNB in 2015 was the recipient of the ‘Best Retail Bank in Sri Lanka’ award at the Asian Banker’s ‘Excellence in Retail Financial Services Awards’ and won the Gold Award in the Banking Category at the 11th ‘ACCA Sri Lanka Sustainability Reporting Awards’.

HNB is the first Sri Lankan bank to obtain an international credit rating from Moody’s Investors Service and has been assigned a foreign currency issuer rating of B1 on par with the sovereign rating, while having a national long term rating of AA- (lka) by Fitch Ratings (Lanka) Ltd.

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Commercial Bank’s 9-month pre-tax profit tops Rs. 12 b

• Deposits grow by Rs. 6.6 b a month to Rs. 588.9 b; loan book up 19% to Rs. 481.9 billion

The Commercial Bank of Ceylon PLC has reported profit before tax of Rs. 12.190 billion for the nine months ending 30 September 2015, achieving a creditable 8.72% growth despite narrowing margins and substantially lower capital gains in comparison with the same period of the preceding year.

The bank’s profit after tax of Rs. 8.426 billion at the end the third quarter reflected growth of 7.96%, while gross income at Rs 56.694 billion was an improvement of 4.58%, according to interim financial statements filed with the Colombo Stock Exchange by Sri Lanka’s largest private bank. Profit before VAT and NBT was up 8.51% to Rs. 14.235 billion.

Interest income for the nine months improved by 4.53% to Rs. 48.605 billion, while interest expenses grew by a lower rate of 1.08% to Rs. 26.207 billion, helped by the growth of low cost funds in the bank’s deposit mix in the review period. Consequently, net interest income grew by a higher rate of 8.88% to Rs. 22.398 billion.

Other income at Rs. 7.432 billion was on par with that of the corresponding nine months of the previous year, during which the bank posted substantial capital gains on bond trading.

The figure for 2015 was helped by an increase of Rs. 554.6 million in net gains from trading, an increase of Rs. 652.8 million in recoveries, exchange profit and investment income, and an improvement of Rs. 316.434 million in net commissions and fees, the bank said.

Commenting on the bank’s performance up to the third quarter, Commercial Bank Chairman Dharma Dheerasinghe said: “The figures are a good indication of how the bank has kept its momentum going throughout the review period in the face of changing conditions and reduced margins. We have also had robust deposit and loan growth in the review period and hope to end the year with a characteristically solid result.”

Commercial Bank Managing Director/CEO Jegan Durairatnam noted that the impact of factors such as the absence of bond trading income and less favourable interest rates in 2015 had been effectively mitigated by the bank’s strong attention to improving volumes in core business areas. “A focus on getting the fundamentals right has always been one of the strengths of Commercial Bank, and helps us navigate challenging conditions,” he said.

Loans and receivables to other customers grew by a healthy 18.87% over the nine months to Rs. 481.923 billion as at 30 September 2015, an increase of Rs. 76.491 billion since end 2014, and a growth of Rs. 94.474 billion or 24.38% YoY.

Deposits from customers totalled Rs. 588.917 billion at the end of the nine months reviewed, up Rs. 59.556 billion at an average of Rs. 6.6 billion per month since 31 December 2014. Year-on-year growth of the bank’s deposit base was Rs. 84.756 billion or 16.81%.

Total assets grew by 9.72% since end 2014 to Rs. 872.923 billion as at 30 September 2015, an increase of Rs. 77.314 billion over nine months, and a YoY improvement of Rs. 125.634 billion or 16.81%.

Loan growth and good management of non-performing loans enabled the bank to reduce its gross and net NPL ratios to 3.01% and 1.52% respectively, from 3.84% and 2.1% a year ago.

The bank’s interest margin declined from 3.91% at end September 2014 and 3.88% at end 2014 to 3.59% at the end of the review period.

At Group level, Commercial Bank, its subsidiaries and associates reported profit before tax of Rs. 12.225 billion for the nine months, an improvement of 8.28%, and profit after tax of Rs. 8.435 billion, an increase of 7.43%.

The only Sri Lankan bank to be ranked among the Top 1000 banks of the world for five consecutive years, Commercial Bank operates a network of 246 branches and 618 ATMs in Sri Lanka. The bank was ranked the most valuable private sector brand in Sri Lanka in 2014 and has also won multiple awards as Sri Lanka’s best bank from several international publications over several years. The bank was adjudged one of Sri Lanka’s 10 best corporate citizens by the Ceylon Chamber of Commerce in 2013 and 2014.

Commercial Bank’s overseas operations encompass Bangladesh, where the bank operates 18 branches and Myanmar, where it has a Representative Office in Yangon. In September 2015, the Bank received regulatory approval for the establishment of a fully-fledged Tier I bank in the Maldives with a local partner.
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