Swarnamahal Financial Services to expand in N&E

Edward Weerasinghe - Kelaniya Group Corr

Swarnamahal Financial Services PLC (“SFS”), one of Sri Lanka’s most trusted licensed finance companies, reported a strong performance during the financial year 2011/12 with overall income growing by 49% to reach Rs. 1.06 billion, compared to the income of Rs. 713.1 million in the financial year 2010/2011. The company that is listed on DiriSavi Board of the Colombo Stock Exchange is mainly engaged in deposit taking, pawning services, vehicle leasing, hire purchase, loans and other credit facilities, through its network of 17 branch offices and gold loan services centers spread across the country.

During the year, SFS reported a before tax profit growth of 125%, with profits before tax reaching Rs. 218.9 million, from Rs. 96.9 million during the previous financial year. The company’s profit after tax meanwhile, more than doubled to Rs. 140.7 Mn in the 2011/12 financial year, from Rs. 62.7 Mn in the previous year. The company’s total asset base grew from Rs. 4 billion to Rs. 5.3 billion, an increase of Rs. 1.3 billion.

“As one of the most secure and stable financial service providers in the country, with nearly 65% of our total asset base backed by gold, we are happy to announce that the company has continued to show commendable growth during the last financial year,” said Sameera Ganegoda, Director/CEO of SFS.

SFS that has established an islandwide reputation for trust and security in the Sri Lankan market, particularly for pawning services and gold continued to be a golden investment for the company. During the 2011/2012 financial year its pawning services expanded by 39%, from Rs. 2.4 billion in, to Rs. 3.1 billion in the 2010/2011 financial year.

“Our gold loan services in particular, showed strong growth during the year due to consumer trust in our company. We also have a highly trained and experienced staff to deliver this specialized service. In addition, because our asset base is heavily backed by gold and gold advances, we are able to provide extremely secure investments or Sri Lankan consumers,” said Ganegoda.

SFS also reported further improvements to its Non Performing Loan ratio that has been already contained at a minimum, compared to industry standards.

“We are happy to announce that our (NPL) ratio too, saw a reduction during the year, to 0.3% from 0.4% previously, due to our ongoing efforts to streamline collections”, said Ganegoda.

With rising interest rates, demand for fixed deposit services too, increased and fixed deposits at SFS increased from Rs. 3.4 billion to Rs. 4.3 billion in the financial year 2011/12.

The company also added two new branches to its network during the year, in Batticaloa in the East, and at Aluthgama. The company says it hopes to establish five more new branches during the new financial year, mainly to improve accessibility to its services in the North and East. The North and East showed exceptional growth during the financial year with strong demand at existing branches in Vavuniya, Jaffna, Batticaloa and Trincomalee.

“Already the North and the East account for nearly one third of our total assets, due to very strong demand, in those locations. So we plan on increasing access to our services to more consumers in these areas,” S. M. Ganegoda, Director/CEO of Swarnamahal Financial Company.

SFS also offers a range of saving products designed for corporate and individual customers, and also children. The SFS Saver account has been specially designed for large savers that deposit larger amounts of funds. The Kumaara Kumari Children’s accounts are designed foe children with an attractive interest rate to encourage the savings habit among children.