Merchant Bank profits top Rs 550 million in 2010

Chairman M R Shah

Merchant Bank of Sri Lanka (MBSL) has recorded a group turnover of Rs 3 billion, Net interest income of Rs 1.1 billion and profits of Rs 551 million for 2010 with a market capitalization of Rs 6.9 billion.

The stable political environment, renewed interest from the corporate and business communities and a highly motivated staff capturing opportunities have contributed to this performance.

The Colombo Stock Exchange showed a considerable performance in 2010, with All Share Price Index improving by 96 percent to reach 6,636 points and the Milanka Price Index growing by 83 percent to reach 7,061 points with a market capitalization of Rs 2,210 billion from Rs 1092 billion in 2009.

Though, net foreign outflow is an anxiety, it is pivotal to attract next level of risk taking investors into the country by form of offering Initial Public Offers, capital market products, funds incorporated in Sri Lanka or even unit trust arrangements.

MBSL Group performance was remarkable while the industry in general saw momentous growth. Turnover grew by 26 percent in 2010 to reach Rs 3.0 billion and profits grew by 63 percent to reach Rs 551 million.

The interest margin of 63 percent as against 41 percent in 2009 and Return on Equity of 16.57 percent as against 11.1 percent in 2009 is fundamental for their growth story. Good governance, ethics and transparency that cascaded from the Director Board and focus on value driven activities were the key success factors that made the Bank to reap the benefits from opportunities arising from the market place.