MBSL records highest ever profits in 25th anniversary year

COMPANY RESULT: The Merchant Bank of Sri Lanka (MBSL) recorded a year of achievement in 2006 with its highest ever profitability, regaining the status of a billion-revenue group and a satisfactory improvement in its asset quality.

This impressive level of performance was coincidentally achieved during its 25th anniversary year.

MBSL regained its billion-income position in 2006 after the drawback experienced during the 1997-2001 period. MBSL’s total income in 2006 reached Rs. 704 mn which marked a growth of 31% compared to the income of Rs. 539 mn in 2005.

The net profit attributable to the company also increased by 32% to Rs. 210 mn when compared to the net profit of Rs. 158 mn in the previous year. This has been the highest net profit so far in MBSL’s 25 year history.

The enhancement of profitability was achieved mainly through the expansion in the revenue generating activities. It is noteworthy to record a growth in the interest income together with an increase in the interest margin in 2006, despite pressure from rising interest rates.

MBSL’s CEO Gamini Karunathilake said that progress to this level was enriched with opportunities through which MBSL took part in the socio-economic development of the country.

“On the other hand, our strength in resilience was underscored through the many challenges that MBSL withstood to preserve its stakeholder interests”, he added.

Interest income of the year grew by 28% to Rs. 610 mn while the net interest margin improved to 69% compared to that of 61% in 2005. The other income category, which mainly consists of corporate finance and capital market activities, strengthened the income of MBSL by Rs. 95 mn in 2006 against the previous year level of Rs. 64 mn.