Kamal Jayantha Yatawara /The Finance Company
Director and CEO
The Finance regains public confidence
Indunil HEWAGE
Full name - Kamal Jayantha Yatawara
School attended - Royal College, Colombo
Civil status - Married, has a daughter and son
The Finance Company PLC which is a path breaking institution in the
real estate and finance industry in Sri Lanka is thriving to expand its
footprint islandwide with the introduction of unmatched and customer
centric products to the Sri Lankan market.
Despite the obstacles faced by the finance industry in Sri Lanka, The
Finance Company managed to register an impressive growth rate in recent
times while regaining public confidence that was lost during the recent
past. Daily News Business interviewed The Finance Company Director and
CEO Kamal Yatawara for the Tea with CEO column.
Here are the excerpts of the interview:
Q: Could you give us an overview of how you entered this field
and how you came to this position?
A: I started my career in the field of accounting at Walkers
and Sons and then entered the marketing field at Unilever and worked
there for 10 years. Later, I saw opportunities in this company and
joined as a Branch Manager 23 years ago. Within the period of five
years, I got into the senior management.
I also had some foreign exposure and worked as a CEO in a IT company
in Malaysia which is a subsidiary of the Ceylinco group. I was involved
in restructuring a finance company in Nepal. Later, I was appointed to
the board six years ago in The Finance Company PLC.
Kamal Yatawara. Picture by Saliya Rupasinghe |
When the Ceylinco Group was hit with the crisis, Central Bank had to
take control of affected companies ,at that time I was appointed as the
CEO of The Finance Company.
Q: Your company was affected in the face of global financial
crisis and various issues of some institutions in the Ceylinco Group. As
the CEO of the company, what kind of strategy did you adopt to regain
public confidence in your company?
A: At first, I had to instill and regain lost public
confidence. To do this, I needed the support of my staff and we had to
ensure that we keep to our promises. We took great efforts to pay the
interest of depositors on time, while keeping the morale of the staff
intact.
With the support of directors and the Central Bank (CB), we were able
to come out of the crisis. The Central Bank supported us at the time of
crisis by appointing managing agents for all affected FCs. With this, we
managed to restore public confidence to a greater extent.
Thanks to the manner in which the CB handled the situation, none of
the financial companies had to close down in Sri Lanka. This happened
without CB pumping a cent to these organizations.
Then the biggest advantage we had at the time of crisis, our monthly
recovery from the loan given was over one billion a month, with that we
were able to pay depositor interests and manage overheads while doing
investments in a small way. What the CB did was to convert part of fixed
deposit liability to equity of the company in a small way. However, many
small finance companies had to do it on a greater scale. Converting the
FD liability to equity will never be a loss situation for those
customers who converted the FD liability to equity in the medium and
long-term since it will have a value addition to the organization in
time to come. From a situation where we were making losses we managed to
revert to a situation where we are making profits and recorded
impressive profit during the first quarter in this year, that was after
three years.
With the present profit-making situation and other development
activities that are taking place in the company, we are optimistic that
the share price of the company would go up since there will be value
addition to the organization. I am requesting all depositors who
converted their deposits to equity not to rush the sell those shares,
but to retain them to reap the benefits in the near future.
Q: What is the present status in the financial industry in Sri
Lanka?
A: Prevailing low interest rates have a favourable effect on
the finance and banking industry to a greater extent. When the borrowing
rates are low, FCs and banks are able to lend at reasonable rates and
people tend to start businesses.
Before the crisis, there was a time that the borrowing rates went up
to 20 to 25 percent. It is very difficult for businesses to survive by
borrowing at around 30 percent rate. Having a lower interest rate in the
country will be a good trend for the economy, where the country is
developing.
Q: What are your views on the real estate business in Sri
Lanka?
A: Our main products are financing, basically financing of
vehicles. In addition, we had a mixed bag of products. Forty percent of
our business was in the real estate business before the crisis. We were
the leaders in the real estate business at that time. As a result, we
helped the Sri Lankan population to increase land ownership by giving
them easy payment terms to pay for lands within 7 to 10 years.
Before the financial crisis, there were many players in the industry.
As a result we had to buy lands at fairly high prices and create price
at the time of sale. However, we have done eight successful projects
after the crisis and managed to sell all projects at market prices or
below the market price with all facilities within a period of four
months. Before the crisis, we were doing projects with 200 to 300 blocks
and now have restricted to a maximum of 60 blocks projects and complete
these projects in six months.
As a result the cost of capital has come down and we are able to sell
lands at affordable prices without creating a price or making a bubble.
Q: What is your greatest achievement in business?
A: My greatest achievement in business is turning The Finance
Company from the crisis situation. There were some issues in several
companies in the Ceylinco Group that were taking funds from the public
and we were part of Ceylinco group and we had lost public confidence due
to that situation. People even close to us did not believe that we could
survive. It was so hard at first. But I think, to get the team together
and also build public confidence and put it back on track is the biggest
achievement that I had in my working life.
Q: What is your advice to young readers, who are interested in
entering this field?
A: When you start working, you got to give 100 percent to
achieve your organizational and personal goals. 'Work while you work and
play while you play', that is the advice I can give to young readers.
Q: What are your interests and hobbies?
A: I enjoy mixing with people. I meet a lot of people and I
really praise the value in interaction with everyone. In addition, I
read, watch TV and listen to music.
Q: Where would you like to spend your holiday?
A: I cannot mention a specific place. However, even for a
holiday, I prefer to go with a crowd.
Q: What sort of investment plan does your company have in mind
in future?
A: We recently opened a branch in Wellawaya and thinking of
business expansion in the North and East with a substantial amount of
investment. Recently we opened a pawning centre in Nelliaddy. In
addition, we see great potential in construction and tourism industries
in liberated areas and with the improvements in these sectors, we are
optimistic that we will have more business opportunities. We are also
looking at expanding into the SMI and the agriculture sector and have
nine branches with trained staff to do SMI loans. The company has a
credit line that comes from CB to assist the agricultural and SMI
sector.
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