Central Finance secures first place in K Seeds Investments’ ranking report

Friday, 29 November 2024 00:57 - - {{hitsCtrl.values.hits}}

K Seeds Investments has identified Central Finance PLC as the best performing Finance Company under the first category among the 27 listed Finance Companies in Sri Lanka through a ranking carried out based on their financial performance for the second quarter of 2023/24.

The report segregates the finance companies based on the size of their asset base and ranks them in their respective categories among their peers based on ten financial metrics, which are calculated from the quarterly financial statements.

Central Finance topped the overall spectrum by belonging to “Category 1” (asset base > Rs. 100 billion). The categories 2, 3 and 4 represent the companies having an asset base between Rs. 50 to 100 billion, 20 to 50 billion and less than 20 billion respectively.

Sri Lanka’s economic recovery gained momentum during this second quarter, supported by improved economic stability, increased foreign reserves and planned structural reforms under the IMF program. Inflation fell significantly due to effective monetary policies, enhancing consumer purchasing power and economic confidence.

Financial institutions benefited from reduced interest rates and stable economic conditions, driving higher borrowing and improved debt repayment. The financial sector, particularly leasing and lending, demonstrated growth, while licensed finance companies leveraged digitalisation and diversified services to boost performance.

While Sri Lanka’s financial sector showed promising recovery during this quarter, challenges persisted, particularly in external debt restructuring and trade vulnerabilities. The quarter underscored cautious optimism, with financial stability hinging on sustained reforms and favourable global conditions.

However, despite all these factors, Central Finance PLC managed to maintain their top rank in the series of ranking reports released by K Seeds Investments on the finance sector of Sri Lanka. The report ranks the finance companies according to their financial results released through interim reports on the Colombo Stock Exchange across 10 key performance indicators (KPIs) – cost to Income ratio, net profit margin, Impairment to loan book, return on equity, return on assets, net interest margin, credit to deposits, operating leverage, net profit growth and loan growth. These 10 KPIs are weighted equally, and an overall ranking is arrived at, based on the aggregate score for each category.