Sri Lanka Insurance declares Rs 5.4b life bonus

Sri Lanka Insurance has declared a life bonus of Rs 5.4 billion for 2016 surpassing its own record of Rs 4.7 billion declared last year. Sri Lanka Insurance has declared over Rs 35 billion as Life Insurance bonuses since 2006.

This is ample evidence of the company’s commitment to provide the highest returns while protecting its policyholders through wise investment management, the company said in a press release.

Chairman, Sri Lanka Insurance, Hemaka Amarasuriya said the company is managed with a clear strategy and a vision to become the trusted insurer to the nation while providing best value to customers.

“This was demonstrated by declaring an unmatchable highest ever bonus in the local insurance industry year-on-year totalling over a Rs 35 billion during the past 11 years. Conscious, informed and timely decisions were made on opportunities that evolved in the capital market, boosting investment income to achieve a high-level of return,” he said.

“As a result, the SLI Life Fund, the largest in the industry, recorded a mammoth growth in investment income enabling us to achieve this landmark. At Sri Lanka Insurance, the bonus is calculated on the sum assured and is based on the time-span of the policy, where customers receive tremendous benefits,” he said.

“We believe that every citizen should invest in life insurance. Hence SLI offers strong, secure and stable solutions that come with government protection. Sri Lanka Insurance is committed to excellent customer service and innovative policies and systems that enable the company to service a whole gamut of customer needs from corporate entities to individuals from all walks of life.”
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NDB Group income up 20% to Rs. 7.5 B

National Development Bank PLC and its Group companies (together referred to as the Group) commenced 2016 on a positive note, posting a 20% year-on-year (YoY) growth in gross income. Accordingly, the Group ended the first quarter with a gross income of LKR 7,555 million, a LKR 1,235 million increase over the comparative period of first three months of 2015.

The net interest income (NII) of the NDB Group was Rs. 2,064 million compared to Rs. 1,984 million, a 4% increase over the corresponding period. Group net fee and commission income recorded a 13% growth to reach Rs. 765 million for the period, which affirms the Bank’s greater focus on fee-based income in a challenging interest rate environment. Net gains from financial investments also grew by 41% YoY. Accordingly, NDB Group’s total operating income grew by 7% to reach Rs. 3,346 million, compared to Rs. 3,142million for the corresponding, the company said in a statement.

Impairment charges for loans and other losses for the period was Rs. 546 million compared to a release of Rs. 64 million in Q1, 2015.

Individual impairment of Rs. 350 million represent specific provisions for a few customers, based on sound judgment and objective evidence. However, a stringent recovery process is being pursued to minimise any significant losses that may arise from such facilities.

Total operating expenses increased by 10% YoY across the Group to Rs. 1,723 million. The Bank opened six new branches during the first three months of 2016, which increased the premises and establishment costs. Given this expansion in the Bank’s network, the Bank has managed its costs well during the same quarter. The Cost to Income Ratio (CIR) was 46.34% and compares with a CIR of 49.55% as at end 2015, the statement said.

Group profit attributable to shareholders (PAS) declined by 37% YoY, and ended at Rs. 548 million. The commendable growth in core banking income and the increase in the profit share from Group companies were, however, negated by the comparatively larger increase in impairment charges.

In terms of Balance Sheet performance, total assets recorded a growth of Rs. 3.6 billion from end 2015, to reach Rs. 319 billion as at March 31, 2016. Loans and receivables grew by 3% to Rs. 216 billion, an increase of Rs 6 billion. Customer deposits grew by 6% at the Bank level to reach Rs. 197 billion.

In terms of YoY growth, the Bank’s total assets significantly grew by 18%, supported by a 23% growth in loans and receivables and 21% increase in customer deposits.

Asset quality as reflected in the non-performing loans (NPL) ratio was 2.49% by the end of the period under review, and compares with a ratio of 2.43% as at the end of 2015.

The maintenance of the Bank’s NPL ratio at consistently stable levels well below the industry average amidst quantum increases in the loan book is an assured indicator of the Bank’s sound risk management endeavours.

Annualised Group earnings per share (EPS) was Rs. 13.37 for the three months ended March 31, 2016 whilst Return on average shareholders’ funds (ROE) was 7.84%. In February 2016, the Bank paid a final dividend of Rs. 4 to shareholders for the financial year 2015, which resulted in a total dividend of Rs. 11 for the same year. The closing share price at the end of the quarter was Rs. 168.80.

NDB opened six new branches within the first three months of the year, bringing its total branch count to 99. Five of these branches opened were outside the Western Province.

NDB Chairman N. G. Wickremeratne said the bank has robust plans to expand its branch network during the year focusing on regional economic revival.

NDB crossed a milestone in the first quarter of 2016 with the launch of its mobile banking facility. NDB’s mobile banking App is one the most advanced mobile banking offerings in Sri Lanka as well as in the region. The Bank also further streamlined its e-statements offerings by integrating all banking products including credit cards and Group company products into a single statement.

Chief Executive Officer, NDB, Rajendra Theagarajah said following the strong balance sheet growth which the Bank achieved during the latter half of 2015, NDB is set on a firm trajectory for enhanced growth in 2016. The Bank is committed to superior shareholder returns through profitable growth. The Bank will also focus on offering banking services combining further technological advancements to its clientele, for meaningful banking with NDB.

London Stock Exchange to invest here

By Chandani Jayatilleke

A high-powered business delegation from the London Stock Exchange (LSE) will meet Prime Minister Ranil Wickremesinghe this week to discuss and finalise an investment agreement.

The discussions to be held in Colombo on Wednesday will be based on the setting up of a global IT support centre that provides IT services to stock exchanges globally.

The support centre to be set up at the TRACE Expert City in Maradana will create high-end technology jobs for Sri Lankans which are equivalent to two or three other similar jobs – in terms of intensity and skill level.

“The investment will create a global platform for Sri Lanka’s tech talent,” an official connected with the deal told the Sunday Observer.

These jobs will be brought to Sri Lanka from other places where they are known for producing high end tech products and services.

LSE already has a support centre in Bangalore, India with 1,500 employees providing services to stock exchanges around the world. However, with the launch of the Colombo office some of the jobs in Bangalore would be shifted to Colombo, benefiting Sri Lankans.

The LSE group is a leading developer of high performance trading platforms and capital markets software for customers around the world, through MillenniumIT.

MillenniumIT, the Group’s subsidiary is the developer of flexible, low cost, high performance trading platforms and financial markets software serving both the Group’s own businesses and third parties

The LSE Group acquired MillenniumIT, a company set up by a Sri Lankan, Tony Weerasinghe in 2009 with 300 employees.

An IT industry analyst told the Sunday Observer that LSE’s direct presence in Sri Lanka is a huge boost for the IT and financial sectors of the country. “LSE is one of the biggest brands in the world operating with strict regulatory compliance. That is also an encouragement for other major investors looking for investment opportunities especially in the knowledge-based business sectors to come to Sri Lanka,” he said.

“It’s a major project for Sri Lanka and the Prime Minister himself was working on this project for a while now and this week’s discussions will lead to the finalisation of the project.

The premier is keen on creating ‘quality’ job opportunities for the educated Sri Lankan youth. Hence they no longer have the need to look for foreign jobs and our talent can remain in the country,” the source said.

Official sources said LSE may also meet several other representatives in the financial and capital market sectors.

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S’pore hospital chain interested in Lanka Hospitals

A Singapore hospital chain has shown interest in a majority stake in Lanka Hospitals Corporation PLC (LHCL), should the government decide to divest these shares, officials said. ”This is a renowned chain and they want controlling ownership in LHCL,” an official told the Business Times. He said that a powerful state minister is negotiating this deal. The Singaporeans are due to come next month for further discussion, he added. Local hospital operators – Hemas and Softlogic Group are also interested.

A Softlogic official told the Business Times that it’s a lucrative opportunity for the group which owns Asiri Hospitals and is the largest listed private hospital group in Sri Lanka in terms of revenue and profits. Hemas in a recent announcement said, “We noted the interest expressed by the Government in disposing of shares in ventures such as LHCL. We have therefore, expressed our interest in pursuing this opportunity once the government initiates the official process”. LHCL, previously Apollo Hospitals Colombo is now indirectly owned by the government with the state owned Sri Lanka Insurance Corporation holding a 54.61 per cent stake.

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