Softlogic Finance exceeds Rs.13 b in assets, profits rise 36%

Friday, 21 June 2013 04:28 - - {{hitsCtrl.values.hits}}

Softlogic Finance announced its results for the financial year that ended on March 2013, which has seen a significant growth of the company with total assets increasing 31% to Rs. 13.2 billion, customer deposits increasing 49% to Rs. 6.9 billion and customer advances increasing 36% to Rs. 11.2 billion. The figures that are being reported under the new SLFRS (Sri Lanka Financial Reporting Standards) format are provisional and subject to audit. Stringent control of credit quality has ensured that the company retains one of the lowest non-performing loan ratios in the industry which was recorded at 1.7% on a gross basis and net NPL of 0.9%. Profit after tax of the company surged to Rs. 164 million recording an increase of 36% compared with Rs. 120 million for the previous year. The

company has now set up the distribution infra-structure necessary for the current phase of growth that will cover the next three years. The network comprises 17 branches around the country and 24 stand alone gold loan centres. The setting up costs of branch infra-structure that was completed in the previous year was not fully utilised in the current year due to sluggish market conditions, but will be recouped when business expands at these locations without additional overheads required for branch expenditure. In what has been a rather difficult year for the industry as a whole, the performance of the company has been admirable despite the tough conditions. The industry was impacted by liquidity diminishing substantially for the most part of the year that effected fund mobilising activity and therefore restricted growth of advances. This coupled with rising interest rates affected the net interest margin of the company as deposit re-pricing had to be undertaken at higher rates that also reduced profitability. Softlogic Finance Chairman Ashok Pathirage commenting on the performance for the year said: “We are extremely positive about the prospects for the financial services industry in the coming years and have put in place a combination of dynamic resources and branch infra-structure at Softlogic Finance that is set to deliver superlative results. “The signal for lower interest rates will further improve business prospects and we look forward to developing the all important SME sector that is at the centre of our business strategy.” The company has forged ahead with its business plans and achieved many milestones during the year, highlight of which was an agreement with FMO from Netherlands for a funding facility of USD 10 million in November of 2012. Softlogic Finance is only the third player from within the Non-Banking Financial Institutions category to receive funding from overseas Development Funding Institutions (DFI’s) that is a reflection of the stability, track record and immense growth potential of the company. Part of this facility was in the form of a subordinated loan that helped boost capital adequacy of the company to 16.2%. Softlogic Finance is part of the Softlogic Group that is one of Sri Lanka’s most diversified and fastest-growing conglomerates, with interests in healthcare, retail, ict, leisure, automobiles and financial services. Softlogic Finance PLC is rated BBB-/P3 rating from RAM Rating with a stable outlook.