Swarnamahal Financial Services’ profit up 124% to Rs. 141 m

Swarnamahal Financial Services Plc (SFS), has reported a strong performance during the financial year 2011/12 with overall income growing by 49% to reach Rs. 1.06 billion, compared to the income of Rs. 713 million a year earlier.

During FY12 SFS reported a before tax profit growth of 125%, with profits before tax reaching Rs. 218.9 million, up from Rs. 96.9 million during the previous financial year. The Company’s profit after tax more than doubled to Rs. 140.7 million in the 2011/12 financial year, from Rs. 62.7 in the previous year. Total asset base grew from Rs. 4 billion to Rs. 5.3 billion, an increase of Rs. 1.3 billion.

The company listed on Diri Savi Board of the Colombo Stock Exchange, is mainly engaged in deposit taking, pawning services, vehicle leasing, hire purchase and providing loans and other credit facilities, through its network of 17 branch offices and gold loan service centres spread across the country. It styles itself as one of Sri Lanka’s most trusted licensed finance companies.

“As one of the most secure and stable financial services providers in the country, with nearly 65% of our total asset base backed by gold, we are happy to announce that the company has continued to show commendable growth during the last financial year,” SFS Director and CEO Sameera Ganagoda said.

SFS, that has established an island wide reputation for trust and security in the Sri Lankan market, particularly for pawning services, said gold continued to be a golden investment for the company. During the 2011/12 financial year its pawning services expand by 30%, from Rs. 2.4 billion to Rs 3.1 billion in the 2010/11 financial year.

“Our gold loan services in particular, showed strong growth during the year due to consumer trust in our company. We also have a highly trained and experienced staff to deliver this specialised service. In addition, because our asset base is heavily backed by gold and gold advances, we are able to provide extremely secure investments for Sri Lankan consumers,” Ganegoda added.

SFS also reported further improvements to its Non Performing Loan ratio that was already contained at a minimum, compared to industry standards.

 “We are happy to announce that our (NPL) ratio too, saw a reduction during the year, to 0.3% from 0.4% previously, due to our ongoing efforts to streamline collections,” Ganegoda said.

With rising interest rates, demand for fixed deposit services too, increased and fixed deposits at SFS increased from Rs. 3.4 billion to Rs. 4.3 billion in the financial year 2011/12.

The company also added two new branches to its network during the year, in Aluthgama and Batticaloa in the East. The company says it hope to establish five more new braches during the new financial year, mainly to improve accessibility to its services in the North and East. The North and East showed exceptional growth during the financial year with strong demand from existing branches in Vavunia, Jaffna, Batticaloa and Trincomalee.

 “Already the North and the East accounts for nearly one third of our total assets, due to very strong demand. So we plan on increasing access to our services to more consumers in these areas,’ Ganegoda said.

SFS also offers a range of savings products designed for corporate and individual customers, and also children. The SFS Saver account has been specially designed for large saver that deposit larger amounts of funds. The Kumara Kumari children’s accounts are designed for children with attractive interest rate to encourage the savings habit among children.