MBSL income up by 47% to Rs. 1.1 b in 1H; ups NPAT to Rs. 75 m
Monday, 19 August 2013 00:00
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Merchant Bank of Sri Lanka PLC (MBSL) posted its NPAT for the second quarter of FY 2013 at Rs. 75 million as against Rs. 5 million during the corresponding quarter of last year.
The company revenue for the first half in Year 2013 of over Rs. 1.1 billion reflects a 47% growth over the corresponding period in the previous year.
MBSL Chairman M.R. Shah said that the expansion of its branch network contributed significantly to the growth in earnings. The new branches distributed Rs. 591.9 million worth facilities during the six months under consideration.
The interest income recorded a growth of 34% from Rs. 839.7 million to Rs.1.1 billion in the six-month period mainly from lease and hire purchase, term loan, micro finance and personal loans.
Interest expenses too increased to Rs. 686.5 million compared to Rs. 451.7 million for the same period. This increase went towards meeting the funding requirements arising from portfolio expansion. As a result, MBSL was able to achieve a net interest income of Rs.438.3 million for the six-month period, which is 13% more than the corresponding period of 2012.
Net fee and commission income of the MBSL increased to Rs. 22 million recording a growth of 15% during the first six months of 2013. The growth in fee income was seen mainly from management fees and brokerage income during the period.
Boosts in stock market activities coupled with the ownership of the right stock portfolio enabled the company to earn a net gain of Rs. 20 million in the second quarter of 2013. As a result, the gain from the share portfolio was 109% more than the previous six-month period.
Net operating income which comprised of the net interest income, net fee and commission income, net trading income, net gain and loss on financial assets designated at fair value through profit or loss and other income after deducting impairment charge reached Rs. 247 million during the second quarter against Rs. 159 million recorded during the corresponding quarter of last year. This is a 56% growth.
Lanka Securities Ltd., (LSL), an associate of MBSL also performed well during this quarter. Due to that fact the MBSL was able to share Rs. 1.2 million of the profit of LSL in opposition to the loss incurred in the last year’s second quarter.
The total assets of MBSL reached Rs. 12 billion as at 30 June 2013 compared to Rs. 10 billion as at 30 June 2012 reflecting a growth of 20%. The growth in the company’s asset base is mainly represented in placements with banks, total lending portfolio comprising lease and hire purchase receivable, loans and advances and available for sale financial investments. Loans and advances to customers recorded an increase of Rs. 514 million and reached Rs. 1.9 billion as at the end of the second quarter of 2013 consequent to the island-wide presence of the company’s branch network.
Leasing is the main contributor to the lending portfolio which represents 55% of the total assets of MBSL in the first half of 2013.
As a parent company, MBSL is concerned about the expansion of their subsidiaries as well and invested an additional Rs. 79 million in MBSL Insurance Company Ltd. and Rs. 250 million in MBSL Savings Bank Ltd. during the six months period with the objective of creating a stronger capitalisation and financial flexibility in those companies.
The Stated Capital of MBSL stood at 1.6 billion rupees as at 30 June 2013. (Issued capital 135 million ordinary shares) Its largest shareholder, the Bank of Ceylon, held a strategic stake of 72% as at the said date.
