Thursday Dec 12, 2024
Thursday Dec 12, 2024
Monday, 18 May 2015 00:00 - - {{hitsCtrl.values.hits}}
Chairman Ruwan Gallage
CEO T. Mutugala
The quarter ending 31 March signifies Merchant Bank of Sri Lanka & Finance PLC’s (MBSL), first quarter as a consolidated and unified entity, following the successful amalgamation with MBSL Savings Bank Ltd (MSB) and MCSL Financial Services Ltd (MCSL) in January 2015. With a total post-merger Balance Sheet size of Rs. 27.3 billion, the amalgamation and the resultant conversion to a Licensed Finance Company under the Finance Business Act No. 42 of 2011 has enabled the Group to attract relatively low-cost public deposits and diversify its funding sources.
The Group’s branch network also extended to 49 and the expansion of human resource consisting of experienced and talented staff has provided ample opportunity for growth, in previously untapped geographical regions and industry sectors.
Performance during the period under review was reflective of ground breaking operational changes arising during the period of transition, including systems integration, streamlining of processes, impairment requirements and management of human resource issues among others. The Group’s total income for the quarter was Rs. 1.33 billion reflecting the decline in market interest rates although the Group’s loan portfolio remained relatively unchanged over the corresponding period.
However, a sharper decline in interest expenses by 25.17% facilitated the Group to maintain a net interest income at Rs. 462.24 million. Impairment provisions for the period increased to Rs. 244.82 million from Rs. 187.39 million the previous year, reflecting the consolidation of MSB and MCSL’s loan portfolios, which suffered from relatively high delinquencies. The rise in impairment, together with an escalation of operating costs arising from post-merger transition issues resulted in the Group recording a net loss of Rs. 153.77 million for the quarter.
The amalgamation has presented multiple opportunities for the Group, both in terms of reach and breadth of services offered as well as achieving diversification and growth in funding avenues. Therefore, they are well positioned to achieve significant improvements in performance during the remainder of the year. Furthermore, the vision, leadership and industry experience of new Chairman, a Fellow Member of the Chartered Institute of Management Accountants, Ruwan Gallage and the synergy generated by the new Board of Directors is expected to propel the Group to greater heights through differentiated business solutions.
