The Finance faces 2011 with determination

Friday, 14 January 2011 00:01 -     - {{hitsCtrl.values.hits}}

By Deepal V. Perera

The Finance Company Plc (TFC) the oldest finance company in the country’s Rs. 1.6 billion share issues is currently on to infuse fresh capital to harness the new economic outcome that is now prevalent in the country.

Director/Chief Executive Officer (CEO) of TFC  Kamal Yatawara presenting the company’s profile to the media said that over the past two years the company managed to withstand one of the most difficult times and now managed to turn around to break even which is projected to happen in the next financial year.

“We are now stepping into a new era after passing through the most challenging years. We were affected due to external factors where people started to withdraw money due to the panic that started due to the deterioration of confidence relating to Golden Key. Because of this factor the people started to withdraw money and we had re-structure our business for six months to re-sort legal issues that arise due to the disintegration of the Ceylinco group. But today we are happy to announce that we have made a turn around and are now heading into more consolidation,” he said.

TFC said that despite the company being hit due to the panic created by the fall of the Ceylinco Group, the company managed to withstand its 300,000 customer base with a Rs.26.9 billion deposit in value which is the highest deposit base in the non banking finance category in the country.

The Company said that the intervention of the Central Bank and the management guidance of the Merchant Bank of Sri Lanka, the company achieved stability and sustainable growth.

 “We have planned to make 2011 a growth year for the company in keeping with the national motto of the nation, we aspire to be a wonder in the non banking financial sector of Sri Lanka by revitalising and restructuring our operations,” the CEO said.

He said that one of the main objectives of the share issue was to re-capitalise the company to meet the new economic boom expected in 2011. Therefore we see plenty of opportunities cropping up in the financial services market and we want to be prepared to cater to the requirements. He further said that by doing so it decided to reward its loyal customers through the share issue by allowing the customers who have been with the company and those who have made new deposits prior to September 2010 to convert 10% of their deposits into equity in today’s share issue in order for them to enjoy capital gains as a mark of gratitude for their loyalty.

Presenting its overall performance for the third quarter of the year 2010 the company said that during the period its new deposit intakes grew by 47% to Rs.300 million where 85% of its depositors are consenting to their deposits being renewed at maturity.  The pawning business has also recorded a growth by 50% during the quarter under review. In addition its real estate segment where land sales have grown by 173% giving a boost to the company.

 “When we were under the Ceylinco group we were engaged in competition with our own group of companies on the real estate segment where sometimes we had to buy land and properties beyond the market price.

But now there is no such competition and we are buying lands at market prices or below resulting in good gains for the company. On the other hand the reduction in the interest rates had given good boost to the company to increase its business. The TFC said that its debtors base stood at Rs2.5 billion over the last year and the new share issue would boost the company to improve its liquidity to provide more loans for its customers.

“Currently we provide Rs.700 million on a monthly basis as interest and loans to our customers. So the new share issue will create momentum in the company to provide more financial services to the customers. By doing so we are planning to reach the one billion rupee profit mark in the next three years,” Yatawara said.

He said that the company currently had 60 branches island wide and about 1100 men and women working for the company.

The Company also said that its brand currently holds the 27th position in the country and that when the company opened its business for this year it fetched Rs.89 million.  Merchant Bank was Stock broker/ issuing agent for the share issue.