SMB Group posts healthy 3Q growth in tough conditions

COMPANY RESULT: The Seylan Merchant Bank (SMB) Group has achieved noteworthy growth in profit and turnover in the first nine months of 2006, despite non-conducive interest rates, market conditions and increased taxation.

In results released to the Colombo Stock Exchange (CSE) on Friday the Group reported a 53 per cent increase in operating profit before associate company profit and taxation to Rs. 66.7 million for the nine months ended September 30, 2006, while the Group's profit after tax rose 46 per cent to Rs. 58.4 million.

Net income of the Group rose to Rs. 686.9 million an increase of 18 per cent in the period under review.

The growth in net income was facilitated by a 26 per cent increase in 'Other' income of the Group to Rs. 115.3 million and a 17 per cent increase in interest income to Rs. 571.7 million.

"We are very pleased that the Group was able to weather the effects of adverse factors such as the situation in the North and East of the country, increasing fuel prices and the state of the economy to turn in a solid financial performance at the end of the third quarter," a company spokesman said.

"Despite increases in the financial interest cost, a healthy bottom line was achieved due to judicious control over other expenses," he said.

Net loans, advances and leases of the Group rose by 11.5 per cent to Rs 4.1 billion. This growth was facilitated by a 13.6 per cent increase in lease rentals receivable to Rs. 3.2 billion during the period under review and a 5 per cent growth in loans and advances to Rs. 1 billion.

Interest and fees receivable rose 33.4 per cent to Rs. 58.3 million, while total assets of the Group rose 6.2 per cent to Rs. 5.3 billion.

Net assets per share (Voting) rose 9.7 per cent to Rs. 9.97 as at September 30, 2006 from Rs 9.09 as at December 31, 2005. Net assets per share (Non-voting) was Rs 1 as at September 30, 2006 while Group basic earnings per share (Voting) increased by 42.1 per cent to Rs 1.62 as at that date.