Sri Lankan stocks end lower on profit-taking

Reuters: Sri Lankan shares fell for a second straight session on Monday in moderate volume as investors booked profits.

The increase in excise duty on diesel which dragged on Lanka OIC also pulled down the index, brokers said.

Sri Lanka's finance ministry on Friday said it had increased the excise duty on diesel by 10 rupees with effect from Aug. 20, but there will not be any price increase in diesel at pumps. .

Shares in Lanka IOC ended down 2.12 percent on Monday. They fell 10.58 percent during Friday' session after news of the excise duty hike.

The benchmark Colombo stock index ended 0.16 percent down at 6,540.19, its lowest close since Aug. 12. It hit its highest close since May 20 on Tuesday.

The bourse fell 0.78 percent last week, recording its first weekly fall in four weeks.

"We are experiencing a bit of profit-taking," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

"But the overall investor sentiment is improving continuously with investors bullish on the construction sector as the government is announcing new expressway constructions and other development projects."

Foreign investors bought a net 212.8 million rupees ($1.46 million) worth of shares on Monday, extending the net foreign inflow so far this month to 939.3 million rupees worth of equities, but have been net sellers of 3.71 billion rupees worth of shares so far this year.

Turnover stood at 889.9 million rupees, more than this year's daily average of 753.4 million rupees.

Shares in Dialog Axiata Plc fell 0.88 percent while Vallibel One Plc fell 2.74 percent and Cargills Ceylon Plc fell 1.63 percent. 

($1 = 145.7000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

LB Finance declares final dividends in excess of Rs 1 bn

LB Finance PLC declared a first and final dividend of Rs. 7.50 per share (par value of Rs 5.00) to the shareholders for the financial year 2015/16. This is an increase of 50% from the previous year, with a total dividend declaration exceeding Rs. 1 Billion.

This is the highest dividend paid in the company’s history and stands as a testament to the company’s attitude towards providing the highest possible return to the shareholder. Financial year 2015/16 was one of the most successful years in history for LB Finance PLC with a staggering profit after tax of Rs. 3.7 Billion. This was a 70% growth from the Rs. 2.1 Billion achieved in the previous financial year.

During the financial year 2015/16, all key indicators were on the up with Net Interest Income rising to Rs. 8.6 billion, an increase of 12% over the previous year’s Rs. 7.7 Billion. The Total Operating Income grew to Rs. 9.8 Billion compared to 8.8 Billion recorded over the corresponding period, an increase of 12%. Net operating Income rose by 39% to Rs 9.4 billion compared to Rs 6.8 Billion recorded previous year.

A notable reduction in expenses came through reduced impairment charges which recorded a 79% reduction to Rs. 382.4 Million.

Total Assets amassed to Rs 84.5 Billion as at the end of the financial year 2015/16, an increase of 25% over the previous year’s figure of Rs 67.5 Billion. Total Loans and Advances grew by 28% to Rs 71.5 Billion as the company continued to focus on core business activities with 95.95% of the Total Assets being Interest Earning Assets.

“Despite the challenges posed by subdued economic growth and volatile market conditions, the company managed to thrive in the Non-Banking Financial Industry and achieve results well within shareholders’ expectations, owing to our sound business model. Thus we managed to declare a total dividend in excess of Rs. 1 Billion to our shareholders,” says Sumith Adhihetty Managing Director.

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NSB’s PAT increases by 24% to Rs. 4.78 bn

The National Savings Bank’s (NSB) Profit After Tax (PAT) for the first half stood at Rs. 4.78 billion up from Rs. 3.86 billion during the same period last year. This 24% increase is most noteworthy considering several challenges the Bank had to face during this period under review. These challenges included a weak Equities market environment and mark to market losses on account of increases in interest rateson investments in Government securities.

Total assets of the Bank reached Rs. 875 Billion fuelled by a satisfactory growth in both retail and corporate lending. The total lending portfolio growth of 10.6% for the first half of 2016 was comparable with the previous year.

In another positive development the Bank improved its asset quality considerably with a decrease in NPL ratio to 2% by June 2016 from 3.5% reported end last year. Lower impairment provisioning assisted in enhancing profitability during this first half of the year.Net interest margins declined marginally on account of changes to deposit mix, resulting in a higher cost of funds.

The Bank’s Tier 1 capital adequacy ratio stood at 15.94% while the total capital adequacy for the reviewed quarter was 14.97%. These ratios however, remain well above the regulatory standards for well capitalized banks. Liquidity ratio of the Bank stood at 75.19% by the end of June 2016, which is well above the regulatory requirement of 20%. By the end of June 2016, the branch network of the Bank reached to 250 branches and the Bank has added 5 new branches during the period under review. AAA Rating of the Bank was reaffirmed for the 14th consecutive year by the Fitch Ratings Lanka. NSB is the only local bank to receive AAA rating from Fitch Ratings and maintain the same for 14 years.

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