Heavy gold provisioning hits Swarnamahal financial results

Tuesday, 9 September 2014 00:01 - - {{hitsCtrl.values.hits}}

Swarnamahal Financial Services Plc (SFS) has recorded a loss of Rs 1.2 billion for the financial year ended 31 March 2014. The gold price drop has resulted in a total charge of Rs 1,035.39 million in 2013/14, which included impairment in the pawning portfolio for the drop in gold prices of Rs. 341.24 million plus a loss on gold sales of 694 million. Consequently the company’s reserves have been eroded resulting in a net negative worth of Rs 781.31 million as at 31 March 2014. The SFS directors have taken cognisance of this and in accordance with the Central Bank Financial Sector Consolidation Master Plan - which stipulates that all finance companies should have a minimum stated capital of Rs. 8 billion - is making arrangements to infuse fresh capital through a merger/divestment of SFS in the near future. The directors are confident that sufficient capital will be infused to rectify the net negative worth position in a way that the continued stability of SFS and its depositors are guaranteed.

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