People’s Leasing Group records Rs. 3.6 b profit amidst unprecedented challenges

People’s Leasing Group, the leading financial conglomerate in the country completed one of its most arduous financial years in its history with profit before and after tax of Rs. 5.70 billion and Rs. 3.59 billion respectively. 

The Company on a standalone basis recorded a profit after tax of Rs. 2.94 billion for the financial year 2019/20 in the midst of several uncertainties and challenges posed by the external environment. The top line net interest income grew by 3.18% to Rs. 15.67 billion from the preceding financial year.

The financial year 2019/20 was a difficult one that began with the country’s economy being directly affected by the Easter Sunday attacks. New business opportunities were curtailed, while recovery of facilities became more challenging in the immediate aftermath of attacks due to the overall slowdown in the economy. However, with its solid foundation People’s Leasing was able to withstand these external vulnerabilities and saw its profitability picking up in the middle of the financial year. Collection difficulties surfaced with the emergence of COVID-19 pandemic in mid-March 2020 and restricted the Company’s profit to Rs. 2.94 billion compared to Rs. 4.42 billion achieved in the financial year 2018/19 due to a significant increase in impairment charges.

Despite of these challenges, the asset base of People’s Leasing remained strong at Rs. 171.66 billion as at 31 March 2020 including the industry’s largest loans and receivables portfolio of Rs. 147.75 billion. Within a short time span of eight years since the Company started accepting public deposits, People’s Leasing today owns the largest deposit base in the industry of Rs. 106.70 billion thanks to the trust placed by Sri Lankans towards the Company despite the negative sentiment surrounding the finance sector. 

People’s Leasing always maintained healthy capital ratios reflecting by strong credit ratings, to support its business and to maximise shareholder value. As of 31 March 2020 Tier 1 and Total capital ratios of the Company remained well ahead of the regulatory requirements at 15.12% and 15.99% respectively.

Commenting on the performance, People’s Leasing Chairman Sujeewa Rajapakse said, “Unprecedented challenges in the year have slowed down our profitability yet through it all, significant growth in our deposit base to have the largest in the industry along with largest loans and receivables portfolio are a reflection of the trust and confidence of our valued customers in our company.”

People’s Leasing & Finance PLC was incorporated in 1995 as a private limited liability company fully owned by People’s Bank, the second largest state owned bank in Sri Lanka. The Company continues as the sole leasing arm of People’s Bank. The brand “People’s” has indeed positioned the Company at the very heart of Sri Lankans. People’s Leasing has been a solid partner in the country’s development process, reaching out to support the quality of life of millions of Sri Lankans over the years as a true corporate citizen in the country. The Company has made a considerable contribution towards the country’s economy in general and the public transport sector in particular, with of over 60% of the private buses financed by People’s Leasing.

PLC, with more than 75% of its exposure to the SME sector, was vulnerable to the slowdown in the economy that began with the Easter Sunday attacks and reached a nadir with the COVID pandemic at the tail end of the financial year.

Despite the year being a crisis year following Easter Sunday attacks and the impact of COVID-19 outbreak for the financial results, resilience of People’s Leasing is portrayed through the several accolades and recognition garnered by the Company. Among other achievements, recognition as one of the ten best corporate citizens in the country by Ceylon Chamber of Commerce for seven years reflects the Company’s unwavering commitment towards uplifting the socio-economic status of the country as a responsible entity while maintaining a strong and stable financial position.

Furthermore, People’s Leasing was judged as first among NBFIs and the joint third of the top 50 Corporates by Transparency International for Transparency in Corporate Reporting, the first ever assessment of transparency in corporate reporting done in Sri Lanka. People’s Leasing has also ranked among the Top 30 in Business Today annual listing for several consecutive years in recognition of the Company’s financial soundness and overall contribution towards uplifting the livelihoods of the citizens of this country.

Through the meaningful relationship with its key stakeholder groups People’s Leasing has been able to better understand and address their needs and concerns while balancing the distribution of value created. CEO, Sabry Ibrahim commenting on the Company’s future aspirations said, “Whilst the crisis caused by the COVID-19 is still continuing and the true impact of it will depend on the intensity and duration of the pandemic, People’s Leasing as a responsible corporate, with its dedicated staff is fully committed to supporting our customers during this difficult time to rebuild their livelihoods and thereby the nation as a whole.”