Motor car registrations dip in March

Total motor car registrations recorded 2,148 units down from 3,079 units the previous month and 2,901 12-months ago.

In the brand new segment registrations were 786 units down from 1,149 units the previous month and 1,070 units 12-months ago. Maruti cars recorded 213 units down from 323 units the previous month and 525 units 12 months ago.

As a point of reference in March 2015 the figure was 2,539 units and at its high point in September 2015 it was 8,029 units. Datsun only posted 33 units down from 84 units and Renault posted 25 units down from 76 units the previous month, both these cars are manufactured at the same plant in Chennai.

Micro posted 166 units claiming the second highest share for the month. Financing share was 51.5% down from 67.1% clearly indicative of the 50% LTV rule coming into full force. Pre-owned motor car registrations recorded 1,362 units down from a relatively high 1,930 units the previous month and also down from 1,831 units 12-months ago.

Toyota was the market leader recording 727 units down from 1,060 units the previous month followed by Suzuki with 373 units and Honda with 202 units. Financing share was 49.2% way below the previous months 61.4%. Premium motor cars recorded 54 new units and 17 pre-owned units for the month down from 67 and 35 units in comparison with the previous month respectively.

Except for a Mercedes Benz C180s an entry level prestige car almost all other brands have recorded meagre numbers.
Electric cars recorded 26 units in the month down from 40 units the previous month and significantly down from 156 units 12 months ago. Nissan Leaf recorded 20 units down from 26 units the previous month. SUVs recorded 361 units in the month down from 434 units the previous month and 571 units 12 months ago.
Honda was the market leader recording 191 mainly through its crossover Vezel followed by Toyota recording 59 units – 32 Prados and 19 Toyota Land cruisers probably imported on MP permits.
Financing share was 49% down from the regular figure of 60%. Hybrids recorded 1,303 units down from 1,856 units the previous month and significantly down from 2,009 units 12 months ago. In the car segment Toyota recorded 492 units (Aqua – 168 units, Axio – 293 units and Prius 22) followed by Suzuki with 360 units (Wagon R – 280) and Honda with 201 units (Grace 95, Fit 96). Financing share was 51% down from the upper 60s.
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NSB posts highest ever Rs. 13.3 bn PBT for 2016

The National Savings Bank’s operating profit at Rs. 16.1 billion recorded 4% increase as compared to the previous year.

These reported profits were achieved despite lower interest margins on account of an elevated market interest rate scenario, the bank said yesterday.

The growth in its traditional lines of business enhanced fee based income and improvement in credit quality of its asset portfolio resulting in lower provisioning being the main contributory factors leading to this growth in profitability.

Interest income of the bank grew by 11% to reach Rs. 86.4 billion whilst the net interest margin reduced to 2.9% in 2016 from 3.3% in 2015. The bank has augmented these market challenges with growth in volumes to post an increased profit. The total assets of the bank surpassed Rs. 900 billion and are currently at Rs. 911.7 billion, whilst the deposit base grew by 10% to reach Rs. 657 billion by year 2016. The bank’s loans and advances portfolio grew by 19% primarily assisted by advances within the retail sector. Its Non Performing Loan ratio at 1.55% testifies prudent management of its asset portfolio with emphasis on strengthening its balance sheet.

A contribution of Rs. 19.2 billion to the government in the form of dividends, levies and taxes is the highest in its history, thus signifying its critical role within the state sector. As another unique initiative, the Bank raised Rs. 6.0 billion from the local market through a private placement of debentures to strengthen the Tier II capital. The Bank’s Tier 1 capital adequacy ratio stood at 12.5% while the total capital adequacy was 14.7% at the end of the year 2016.
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Damro enters plantations with Rs. 5 b deals on Pussellawa and Agalawatte

• Browns exits loss-making Agalawatte acquired from Mackwoods in July last year
• Reduces stake in managing firm of Pussellawa from 55% to 10% at hefty profit

Popular furniture brand and South Asia’s largest retailer Damro is entering the plantation industry with strategic investments in Agalawatte and the managing company of Pussellawa.

In two separate yet connected deals yesterday, the Damro group of companies acquired 45.1% stake in Pussellawa Plantations Plc’s managing agents FLMC Plantations Ltd. for Rs. 4.7 billion and a controlling 61.1% stake in Agalawatte Plantations Plc for Rs. 275 million.

Through the deals, the Browns Group reduced its exposure to the plantation sector.

Browns Capital Plc (formerly known as FLC Holdings Plc) divested 4.5 million shares in FLMC Plantations Ltd. at Rs. 1,040 per share. The buyers were Piyestra Furniture Ltd. (2.588 million shares for Rs. 2.69 billion), D.R. Furniture Manufacturing Ltd. (0.96 million shares for Rs. 1 billion) and D.R.M. Manufacturing Ltd. (0.96 million shares for Rs. 1 billion).

Browns will continue to hold 10% stake in FLMC Plantations giving Damro control in the managing company. The balance 45% stake is held by a foreign shareholder. The carrying value of Brown’s 55% stake in FLMC Plantations in FY2016 was Rs. 600 million.

FLMC Plantations is Browns Capital’s management and investment company for plantations.

Coming under Browns Capital Plc, Pussellawa Plantations Ltd. has a mix of tea and rubber plantations, with 2,492 hectares of tea and 3,371 hectares of rubber. Spanning over 11,000 hectares, the 13 estates are geographically located in the Colombo and Ratnapura districts and 11 estates in the Pussellawa and Kandy areas.

Browns Capital also owns Maturata Plantations and has interests in the power, leisure and real estate sectors through its subsidiaries, associates and sub-subsidiary companies.

Separately, Browns Power Holdings Ltd., a fully-owned subsidiary of Browns Capital Plc, sold 15.27 million shares in Agalawatte Plantations Plc (APL) to D.R. Investment Ltd. at Rs. 18 per share.

Owning tea, rubber and oil palm assets with nearly 11,000 hectares, APL is loss-making and previously came under the Mackwoods Group. Its net asset per share as of August 2016 was Rs. 10, down from Rs. 20.78 a year earlier. Browns acquired the stake at Rs. 20 per share in July last year.

As at August 2016, the retained loss at APL was Rs. 964 million. The loss from continuing operations in the six months ended June 2016 was Rs. 195 million, though down from the Rs. 376 million of a year ago.

The Damro Group styles itself as South Asia’s largest furniture manufacturer and Sri Lanka’s number one furniture retail network. In recent years it has expanded its product offering to cover consumer electronics and durables. Since Damro was established in 1986 it has achieved rapid success and has expanded to over 200 showrooms including over 60 in India. It employs nearly 10,000 people.

Analysts said its entry into the plantation sector was linked to enjoying the readily available raw material of timber for its booming furniture range as well as to harness its wider prospects through better management of plantations’ core products.
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FMO Netherland, SBI-FMO Fund and IFC to invest $ 22 m in SDB bank

At an extraordinary general meeting held last week, shareholders of SANASA Development Bank (SDB Bank) approved an Equity and Funding package amounting to $ 22.21 million (Rs. 3.3 billion).

Out of this $ 9.82 million (Rs. 1.46 billion) will be added to the capital base of SDB Bank by way of equity while a further $ 12.39 (Rs. 1.84 billion) will be through long-term senior and subordinated convertible term loans.

SDB Bank, which is undergoing a major transformation process, has invested substantially in improving its technology and efficiency. 

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People’s Bank Group posts record results in 2016

• Pre-tax profit up 5.4% to Rs. 25.4 b; After-tax profit rises by 19% to Rs. 18 b
• Gross income up 17% to Rs. 144.7 b
• Two Rs. 1 trillion achievements – first for any Sri Lankan bank in one year

People’s Bank yesterday announced an impressive financial performance for the FY 2016, with all Key Performance Indicators showcasing a striking upward trajectory in the group’s performance.

The group posted a PBT of Rs. 25.4 billion, an increase of 5.4% which provides an example of the group’s unwavering commitment to broaden its vision, action and impact. The 19.2% growth seen in a PAT of Rs. 18 billion, increasing from Rs. 15.1 billion, further reiterates this promise.

Etching one of the many milestones it had this year, total gross income reached a record performance of Rs. 144.7 billion, a 16.9% growth compared to the Rs. 123.8 billion recorded at end 2015. Net surpluses were evident across all aspects of investment operations with revaluation and available for sale reserves posting Rs. 11.9 billion and Rs. 0.3 billion respectively.

The group’s Return on Average Equity was 22.7% compared to last year’s 22%, while the total contribution via taxation, special levies and dividends reflects the integral role the group plays in national economic development, with its Rs. 22.9 billion contribution once again considerably higher than last year’s Rs. 19.5 billion.People’s Bank Group Chairman Hemasiri Fernando said that the group’s results demonstrated its journey within the fast-evolving financial services industry, maintaining an insistent focus on every stakeholder.

“Our results are self-attesting to an unrelenting pursuit to add consistent value for the benefit of all our stakeholders. Needless to say, the market circumstances in 2016 were challenging and from a macroeconomic standpoint these included inflationary pressures and a tightening monetary policy which led to a rise in interest rates and high earnings pressure.”

The bank, which has won multiple awards both locally and globally, holds the distinction of being the 387th-largest bank in Asia as per the Asian Banker magazine. People’s Bank’s Return on Equity stands among the top 20 in the region, while another benchmark it set this year was the 27.5% Return on Average Equity, which in 2015 was 27.1%.

“Our successes are ultimately owed to our customers for their trust and confidence in our efforts, our regulators for their support and wise counsel and importantly our employees, who consciously and very diligently push the boundaries of success and performance even amidst challenging circumstances,” Fernando opined.

This customer loyalty is well-reflected in the Rs. 1.1 trillion in customer deposits, representing a 20% growth over the end of 2015’s Rs. 932.9 billion, certainly one of the highest in the country. Similarly, customer advances too touched the Rs. 1 trillion mark, with a 16.6% growth over last year’s Rs. 869.8 billion at a group level

Opining that 2016 has been a year of new highs for the bank, CEO/General Manager Vasantha Kumar said: “It’s been one of continuous positive improvement across several aspects of business operations both quantitative and qualitative. It was a year that witnessed two Rs. 1 trillion feats in a single year - the first for any bank, gross income generating capability crossing the Rs. 140 billion mark, loan book composition further improved and the gross non-performing loan ratio reaching a ten-year low - the latter providing evidence of a further improved risk management framework and collection and recovery process.”

This is well evidenced in the ten-year low Gross NPL ratio of 1.9% (which in 2015 was 2.4%), highlighting the hallmark consistency that People’s Bank has continued to espouse and also a total asset base of Rs. 1.4 trillion, which is an 11.6% growth over Rs. 1.3 trillion at end 2015.

In analysing the group’s Capital Adequacy Ratio of 13% with a Tier I ratio or 11.1% and the bank’s CAR of 12.1% and 9.8% respectively, Fernando clarifies that “in terms of near-term goals, bolstering our regulatory capital levels remains a priority and a work in process. Ongoing discussions with the Ministry of Public Enterprise Development and the recent Cabinet approval received to amend the People’s Bank Act are viewed very positively in this connection.”

Kumar adds that the corporate plan of 2016-2020 forms an integral facet to this success with several new initiatives propelling the bank towards a new era of performance and delivery capabilities. “Core to them all is digitisation,” he says of the digitisation process that began in 2015 and is well on target to be fully-operational by end 2017.

“Backed by technology of global repute and a team unlike any other, this will put us on par with international counterparts in terms of our customer convenience offerings. Not complacent with our successes and conscious of the challenges that may lie ahead, we look to the future with a great degree of optimism.”

A full set of financial statements can be accessed at www.peoplesbank.lk.
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