MBSL wraps up 2018 with impressive doubling PBT by 95%

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Profit after tax up by 79% at Rs. 181 million
Total assets at Rs. 35 billion

MBSL has made a strong comeback in the financial year 2018, recording a pre-tax profit of Rs. 447 million. In comparison to the pre-tax profit of Rs. 229 million recorded in 2017, MBSL recorded a pre-tax profit growth of 95%. As a direct result of changes that the Company made to enhance financial and operational resilience from the mid of the year, the Company witnessed a standalone profit after tax growth of 79.21% increase from Rs. 101 million to Rs. 181 million.

Commenting on the Company’s solid performance in 2018, MBSL Chairman Dr. Sujeewa Lokuhewa said, “This year, we revisited our strategic focus to reinforce our core fundamentals to improve our resilience against external forces. We streamlined our lending model to enhance our credit control and recovery management architecture. This move allowed us to manage risk posed by the external environment on our target market, the Small and Medium Business segment.”

The Company’s efforts to re-strategise the business activities led to lending portfolio growth rates of 9% and 109% in leasing and gold loan activities respectively. MBSL’s impairment cost reduced by Rs. 109 million, driven by prudent provisioning policy employed by MBSL. During the financial year 2017/18, MBSL disbursed Rs. 18.44 billion worth of secured loans.

The strategic growth plans for the future include consolidating the Company’s strengths to build resilience in order to effectively navigate the unpredictable macroeconomic environment of Sri Lanka. MBSL plans to leverage on the Company’s core competencies to pursue growth opportunities, especially in the retail sector. Nevertheless, the Company will adopt a prudent approach to growing the lending book in order to strike a balance between improving NIMs and seeking sustainable growth. In addition to streamlining the lending model, MBSL revamped its recovery model to maintain a sharper focus on branch level recoveries.

“We will continue to leverage on our core competencies to pursue growth opportunities in the retail segment while remaining cautious in growing our lending book in order to seek sustainable growth. Moreover, given the challenging macroeconomic environment, we will continue to investigate new strategies to build resilience and continue our commendable recovery,” concluded Chief Executive Officer (Actg.) Jude Gamalath.

Established in 1982, the Merchant Bank of Sri Lanka & Finance PLC was quoted as a public listed company on the Colombo Stock Exchange in 1991. At present, MBSL, which functions as a highly successful leading pioneer in Sri Lanka’s investment and merchant banking sector, offer customers a wide range of products such as leasing facilities, corporate and retail credit to small and medium scale industries and business enterprises, pawning services and real estate, corporate advisory and capital market, savings and children’s accounts and fixed deposits. With a 74% stake, the biggest shareholder of MBSL is the Bank of Ceylon, the giant state-run banking institution in the country. MBSL has 49 branches and business places including the Head Office across the country.