CDB tops Rs. 300 m in 9-month net profit

Completes record decade of unprecedented transformation (2001- 2010)

Continued improvements in key performance indicators in the third quarter of 2010 enabled Citizens Development Business Finance Ltd (CDB) to record a noteworthy profit growth for the nine months ended 31 December 2010.

Central Bank Governor Ajith Nivaard Cabraal handing over the Authorised Money Dealer certificate to CDB’s CEO Mahesh Nanayakkara at the opening of CDB’s Jaffna outlet last year. Also present are Controller of Exchange Osmand Chandrawansha and former Director of Non-Bank Supervision of CBSL and current Superintendent of Public Debt Sepala Rathnayake

The Company’s pre-tax profit has gone up by 938% to record Rs. 331.7 mn up from Rs. 31.9 mn for the corresponding period last year, while revenue reached Rs. 1492 mn projecting a growth of 35% over the corresponding period.

Commenting on the transformation of the CDB, Director/CEO Mahesh Nanayakkara said, “The first decade of the 21st century has witnessed remarkable transformation, establishing CDB as a formidable leading player within the financial services industry. As reflected in all key financial figures, CDB’s transformation from a small player in 2001 to a prominent dynamic player within the industry by 2010 has been remarkable.

“From 2001 to 2010, CDB’s total asset base has grown from mere Rs. 276 m to Rs. 9 b. The annual revenue has grown from mere Rs. 25 m to around Rs. 2 b. Net assets which recorded a negative figure in 2001 have been converted to a positive of Rs. 800 m. From the loss making status in 2001, CDB has continuously recorded growth in profitability since 2004 and posted a net profit figure surpassing Rs. 300 m for the first nine months of the current financial year (2010/2011). CDB was recently assigned BBB-/P3 credit rating by RAM Rating (Lanka) Ltd. We are confident in concluding the current financial year (2010/2011) with the same momentum in bottom-line results.”

Among the principal contributors to the net profit after tax figure of Rs. 310.71 m recorded during the period under review, was an increase in net interest income by 79% to Rs. 583 m, an increase of Rs. 257 m over the preceding year. While the overall NPL ratio stood at 4.48% at 31 December 2010. The earnings per share recorded a figure of Rs. 7.83 for the period under review. Mark to market value adjustment of investment in listed shares amounting Rs.114 m also has contributed significantly to the bottom-line results.

CDB’s AGM Business Development, Malcom Weerasuriya said, “Sri Lanka is poised for massive growth in 2011. We have recorded the highest tourist arrivals in 2010 exceeding 650,000, an increase of 46%. With CSE market capitalisation increased to Rs. 2.2 trillion, up from one trillion in 2009, our projected GDP growth is around 8.5% in 2011, all of which augurs well for our economy.”

“In this overall economic upturn we, as an organisation driven by ‘people passion,’ are confident of achieving results within a very competitive market environment. This mindset has been developed over the past decade and is currently bearing fruit. Our total deposit base has increased by 39% to Rs. 6.7 Bn compared with the last audited balance sheet date,” Weerasuriya said.

“Our business strategy of being net lender to the rural economy is well supported by our multi-level distribution strategy coupled with people orientation. This has enabled us to expand our online connected distribution network to 33 across the country. Further geographic expansion is on the cards this year as our country’s GDP expansion is expected to be distributed in a more equitable manner among all the provinces.

“CDB is the first company to promote and commence operations in foreign currency encashment (authorised money dealership) under the Central Bank’s new guidelines for specialised banks, financial institutions registered under the finance companies act, and specialised leasing companies. CDB has already commenced foreign money remittance services through ‘Moneygram’ by joining with HNB. CDB has plans to launch savings accounts in the first quarter of 2011/12,” he added.

CDB today ranks as the seventh largest player in terms of total assets among 36 financial institutions registered under the Finance Companies Act. CDB is also listed on the main board of CSE. CDB steps in to the second decade of 21st century with great aspirations and ambitious vision to seize the unprecedented opportunities and possibilities presented in post-war Sri Lanka within a rapidly changing context and accelerated economic growth.