LOLC results outstanding

Profits top Rs 7.1 billion in nine months:

LOLC has continued to show exceptional performance recording outstanding pre-tax profits of Rs 7.1 billion for the nine months to December. This is a 485 percent growth over last year, with the financial services sector, trading sector and the other sectors contributing exceptionally well. The financial services sector showed excellent performance with pre-tax profits of Rs 5.5 billion, a growth of 354 percent over last year.

The rest of the group contributed Rs 1.6 billion to the bottom line. With a contribution of taxes of Rs 1.1 billion, the Group recorded post-tax profits of Rs 6 billion, a growth of 647 percent over last year.

LOLC Group Managing Director and CEO Kapila Jayawardena, said ‘Sri Lanka is on the threshold of economic prosperity with new opportunities beckoning from North and East of the country as well.

“LOLC has been able to break new ground in profit diversity with vigorous implementation of initiatives taken in developing its Core business, as well as embracing the quest for new opportunities. This performance, which reflect a quantum leap when compared to the previous year, was due to the implementation of the Group’s road map which enabled us to capture opportunities well ahead of time’, he said.

The increase in total revenue kept its momentum in line with the aggressive growth in the financial services sector and the trading sector. The revenue grew by 172 percent over last year to reach an all time high of Rs 26 billion for the nine months.

The revenue from the financial services sector saw a growth of 41 percent to reach Rs. 13 billion while the contribution from the rest of the sectors was Rs 12.4 billion. The borrowing costs continued to come down in line with the sliding interest rates with the Group raising funds at attractive rates.

LOLC’s ability to source long-term funding from foreign multilateral and bilateral agencies at attractive rates contributed well to the reduction in borrowing costs. The total borrowing costs reached Rs 4.9 billion by December reflecting the lower interest margins demanded by the Group.

LOLC Group’s core business, the lending operations and its strategic investments contributed well to the bottom line positioning the Group on a strong footing to reap steady growth in profitability in the medium to long term. The Group’s expansion strategies augurs well with the economic growth forecasted in the near future.

The balance sheet grew along with the business growth of the Group, with total assets crossing the Rs 100 billion mark reaching Rs 108 billion by December. This is almost a 100 percent growth over last year. The corresponding liabilities grew by 60 percent represented by the borrowings of the Group mainly coming from the financial services cluster and the holding company. The total assets of the financial services cluster reached Rs 68 billion, a growth of 20 percent over last year. The corresponding liability grew by 20 percent. The advances grew by 49 percent to reach Rs 49 billion; this is an indication of the strong portfolio growth as a result of the growth in executions. The newly set up branches in the North and the East contributed significantly to this growth.