Sampath Leasing and Factoring Limited, a fully owned subsidiary of Sampath Bank PLC, established in 2005 announced its financial results for 2010, which signaled a turnaround in its activities, laying the platform for future growth and expansion of its activities.
The company made a pretax profit of Rs. 165.21 million and a post tax profit of Rs. 137.65 million for the 12 months ended 31 December 2010.
The first step in expansion of its activities commenced in July 2009, when Sampath Bank added impetus to the capital structure of the company with a fresh infusion of Rs. 300 million as equity capital. The re-engineering of the company’s core processes laying greater emphasis on key performance indicators was a contributory factor for the growth in profitability.
The recovery of delinquent accounts with a view to reducing the value of Non-Performing Advances (NPAs) resulted in the value of NPAs declining by Rs. 124 million for 2010, resulting in a significant clean up of the Advances portfolio and a vast improvement in the company’s NPA ratio.
The company has now orchestrated a strategic plan over a three year time horizon that seeks to achieve an exponential growth phase in its activities through a process of branch/channel expansion, aggressive and segment defined marketing programmes, diversity in product lines and improvement of credit delivery speed and processes.
Harris Premaratne, Managing Director of Sampath Bank PLC and Executive Director of the company commented:
“The company would concentrate on two fund based product categories in the main, namely the distribution of finance leases and factoring of book debts. With regard to finance leases, the target segment would envelope the Small and Medium sized Enterprises (SMEs) and corporate executives.”
“We also go for reach and extending of tailor made structured facilities for a broad spectrum of the market and asset categories viz; cars, three wheelers, low valued commercial vehicles, agricultural equipment and other commercial vehicles.
With regards to factoring we strive to offer a comprehensive service at flexible rates and reaching out to a client segment that goes beyond the SME sector. Factoring services would also include value additions such as professional sales ledger administration and debt collection. In order that both products are at congruence with the banks overall plans a clear line of marketing platforms have been defined,” he added.
The company recently opened two branches in Peliyagoda, and Kalmunai and has set plans for further branch/channel expansion. The aggressive growth of the loan book has commenced through product lines and channel expansion.
With regards to leasing the company has tailor made products for different segments/assets. These include ‘Lifestyle’ leasing aimed at corporate executives, ‘TUK TUK’ leases aimed at the three wheeler market, ‘Agri’ leases targeted at the agricultural sector and ‘Senin Cash,’ an asset backed loan scheme. Factoring facilities have been branded under the name and style of ‘Support cash’. The principal aim of the company is to now strive to attain a market ranking that places itself within the top five players by 2014.
The company further added weight to its Board of Directors recently with the appointment of two new non-executive directors who have had extensive experience in the finance leasing and factoring industry. The two included Asoka Sirimanne (former Managing Director of Mercantile Leasing Limited) and Dr. Dilanjen Soysa (former Managing Director of Commercial Leasing Limited and a Past President of the Leasing Association of Sri Lanka).
The rest of the Board of Directors includes Arthur Senanayake (Chairman, Sampath Bank), Sunil Wijesinghe (Deputy Chairman, Sampath Bank), Harris Premaratne (Managing Director, Sampath Bank), Lakshman Hettiarachchi and Anoja Karunaratne.
In addition to the board structure the company receives the advisory services of many of the bank’s senior management, which includes Aravinda Perera, Deputy Managing Director of Sampath Bank and Ranjith Samaranayake, Group Chief Financial Officer of Sampath Bank.