CDB heralds exceptional financial performance on 20th anniversary

Celebrating its 20th anniversary as a harbinger of change and trailblazing forerunner in the NBFI sector in Sri Lanka, Citizens Development Business Finance PLC (CDB) reported exceptional financial results for FY 2015/16, revelling in its innovative persona, corporate stewardship and incomparable team. The entity’s impressive track record in sustainable financial performance has built a robust and resilient foundation that has enabled the company to be fearless and holistic in its approach. 

This was well evidenced in the recognition it received from the Ceylon Chamber of Commerce which placed CDB among the Ten Best Corporate Citizens of 2015 and the winner in the Below Rs. 15 b Revenue Category, two feats that were added to the ever increasing kudos that CDB continues to collate.

CDB Managing Director/CEO Mahesh Nanayakkara articulates that CDB has affirmed its strong presence even more with this year’s results. “CDB’s reputation as a financial entity that has continued to be consistent in its financial performance is well demonstrated in the impressive milestones we notched this year. The Balance Sheet surpassed the Rs. 50 billion mark, detailed at Rs. 50.6 billion and reflecting a growth of 33%, positioning CDB among the largest NBFIs in the country.” 

He details that Profit After Tax too showcased a remarkable upward trajectory, positioning itself beyond the Rs. 1 billion milestone, which is a growth of 43%. Revenue is recorded at Rs. 7.5 billion, inclining 8%.

Net interest income is recorded at Rs. 3 billion, which is an increase of 7%, while impairment charges and disposal deficits are Rs. 399 million, reflecting a reduction of Rs. 281 million or by 41%. The Loan Book recorded a growth of 31% standing at Rs. 38.5 billion The narrowing of net interest margins from 8.0% to 6.9% in comparison to last year was a result of the conscious strategy adopted by CDB to change the composition of the lending mix. 

The direct positive outcome of this strategy has been that both gross and net Non-Performing Loan ratios reduced from 5.8% to 3.6% and 3.2% to 1.6% respectively, which resulted in the reduction of impairment charges. The deposit base grew by 14% to be posted at Rs. 30.8 billion, while debt funding, which became the main source of funding, heralded a growth of Rs. 7.5 billion, an increase of an impressive 156%. Cost to income ratio stood at 57.58%.

Total equity surpassed the Rs. 5 billion mark, while Tier I and Tier II in the Capital Adequacy Ratios stood at 11.72% and 11.74% respectively, well above regulatory requirements. The liquidity ratio at 20.04% too was above the regulatory requirement level. 91% of assets are in interest bearing regular cash flow generating investments including the asset backed loan book consisting of 76% of assets. Profit before VAT on Financial Services, NBT and the crop levy is notched at Rs. 1.43 billion, stipulating an incline of 36%, where profit before income tax stands at Rs. 1.25 billion. This an increase of 32%. Return on Equity recorded 21.78%, while Earnings Per Share stands at Rs. 18.51 The Net Book Value per share is now Rs. 93.03 as per the balance sheet date.

CDB’s specialised leasing subsidiary changed its name to Unisons Capital Leasing Ltd (UCL) during the year. It fully subscribed to the rights issue announced by UCL during the FY 2015/16 investing Rs. 82.1 million at Rs. 10.50 per share, which increased CDB’s stake in UCL to 90.38%. For this financial year, UCL contributed Rs. 15.6 million towards the Group’s consolidated results. Judging by the positive trends already experienced, we expect UCL to make a significant contribution to the Group’s bottom line in the coming years.

In addition, CDB’s success factors of accessibility and reachability were further enhanced with the addition of three ATMs and three new branches into its network of 62 outlets and the strategic relocation of six branches for better service fundamentals. It is now a certified Carbon Neutral entity based on the carbon emissions emanating from its Corporate Office. This green consciousness is well entrenched into CDB’s business strategies as well and this year 22% of automobile financing has been towards hybrid and electric vehicles. 

During the year, the lending composition of three wheelers which has a relatively higher emission level reduced to 18% from 24% in comparison to the corresponding year, resulting in the three wheeler composition in the Loan Book reducing from 36% to 26%. The company continues its community initiatives, while instilling a social and environmental consciousness with its flagship IT laboratory presentation project to schools in difficult and disadvantaged areas through CDB Pariganaka Piyasa, scholarships for high achievers through CDB Sisudiri, CDB Hithawathkam and CDB Mihikathata Adaren.

CDB has a strong commitment and passion to be a net lender to the rural economy. The urban funding-rural lending strategy and access to finance given to the base of the pyramid market combined with CDB’s corporate stewardship has been the formula in prompting our sustainable and consistent growth. By developing a strong IT platform and being the only NBFI in Sri Lanka to operate on a Core Banking Solution to date.

CDB has been extremely determined to build a corporate entity on a people driven strategy, blending human emotions, human passion and human spirit. 

Building on the mindset of ‘Strategy bets on people to succeed’, it has used its formidable team as the most valuable source of energy to drive the company forward to succeed in a rapidly changing highly competitive environment. The third decade ahead elaborates an ambitious target of a Rs. 100 billion Balance Sheet by 2020, delivering our brand promise of, ‘Your Friend’. 

CDB pledges to remain uncompromising in its economic, social and environmental tenets and continuing its unwavering emphasis on governance, accountability, responsibility and transparency as a custodian of public funds that will lead to an empowered journey of responsible growth.