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Tuesday, 10 January 2012 23:55 - - {{hitsCtrl.values.hits}}
It was commendable for Mercantile Investments PLC to once again win the prestigious gold award in the Finance Companies Sector for the astounding 12th consecutive year at the Annual Report Award Ceremony held in December 2011, organised by the Institute of Chartered Accountants of Sri Lanka. Mercantile Investments PLC managed to secure first place despite competing with number of other finance companies in the sector. The award signifies the company’s excellence in financial reporting and thus once again establishes company’s commitment towards transparency.
Winning this award is yet another feather in its cap as Mercantile Investments PLC being a premier Finance Company registered under the Central Bank of Sri Lanka and now quoted in the Colombo Stock Exchange, has gone from strength to strength over its almost five decade long business heritage.
The company continued its impressive financial performance in 2011 recording a Net Profit After Tax of Rs. 623 million for the first half of the financial year ended 30 September 2011. This performance reflected a profit growth of 23% or a Rs. 117 million in comparison to previous year same period.
Despite being in a highly competitive sector, the company was able to raise its lending levels which grew by 58 % while deposits mobilisation growth too was up notably by 40% in the 2011/12 financial period in annualised terms, making it possible for the company to reach the Rs. 5 billion mark in total deposits.
The company was able to display a dominant presence in the sector through focused strategies adopted by management together with the unrelenting commitment and effort of its staff.
The company, as part of its business strategy was able to expand its operational structure in the last few years by locating MI branches in key provinces.
In 2011/12 period, the company commenced operations in provinces of Galle, Matara and Kurunagela being lucrative locations for business of hire purchase and lease financing. When pursuing expansion, the management was focused on keeping to its fundamentals and principles on which the company’s strong business foundation has been built over the years.
Another note-worthy positive factor this period was the company’s ability to reduce its non- performing lending levels sharply. The on-going recovery drive initiated by the Recovery’s Division of the company was successful in reducing non-performing lending by Rs. 100 million or 23% by the first half of the 2010/11 period.
By maintaining the non-performing ratio below 4%, the company was able to reverse doubtful debt provisions amounting to Rs. 43 million in the first half of 2011 compared to a reversal of Rs. 32 million recorded in the same period last year.
