LB Finance records Rs. 7.8 b PBT in FY18

Thursday, 28 June 2018 00:00 -     - {{hitsCtrl.values.hits}}

LB Finance has accomplished a stellar performance for the year ended 31 March 2018 with a profit before tax of a record Rs. 7.8 billion. 

In a statement LB Finance said its Operating Profit before Tax on Financial Services crossed the Rs. 7Bn milestone to reach Rs. 7.8 b as at March 31, 2018, a growth of 13.2% over the previous year. 

Total operating income recorded a growth of 20.4% reaching Rs. 13.5 b. Net interest income, the main source of revenue, grew by a phenomenal 21.4% while profit after tax was up by a commendable 8.5% year-on-year reaching Rs. 4.3 b in 2017/18, the highest ever recorded in the company’s history.

Profit before tax grew by 10.3% reaching Rs. 6.4 b for the financial year 2017/18, one of the highest recorded among all the players in the Non-Banking Financial Institutions (NBFI) sector for the year. 

Total assets crowned the Rs. 120 b mark, recording a growth of 17.6% from the previous year. 

Profitability in terms of Return on Assets and Return on Equity were recorded at satisfactory levels of 3.8% and 30.5% respectively for the year. Total Deposit base grew by 20.8% over the previous year reaching Rs. 73 b for the financial year 2017/18. Net Asset value per share grew by 22.7% over the previous year to Rs. 110.80.

The company maintains its position as a leading financial institution in Sri Lanka, a status which it has leveraged on to expand and reach other markets in Asia, specifically Myanmar. 

In striving to enhance its credentials as a regional player, the company’s strategy is to focus on the opportunity for growth by taking into account, the matters which are material to the long-term sustainability and the ability to leverage the assets and the expertise of the wider Vallibel One group. 

In doing so, the intention is to be the first to respond effectively and efficiently to the needs of the company’s key stakeholders by aligning the corporate strategy, in cognisance with the prevailing economic environment and prospective opportunities.

Commenting on the performance, LB Finance Managing Director Sumith Adhihetty said: “The 2017/18 financial year saw LBF once again making significant strides along the strategic path we have been on over the last few years. I am pleased to report that our financial performance, while consistent with our expectations continues to break records in the NBFI sector in which we are a significant part. While changes in the economy are beyond our control, we want to be prepared to always be at the forefront of change management. This means having a broad and forward-looking perspective in order to foresee our customers’ needs and actively seeking opportunities to achieve a sustainable competitive advantage, enhance our corporate value, and continue to create wealth for all of our stakeholders: our shareholders, customers, our employees and their families as well as the local societies in which we operate.”

LB Finance recorded a strong, above-industry average total capital adequacy ratio of 19.8% as at 31 March 2018 against the minimum regulatory requirement of 10% demonstrating its robust financial stability. Further, A- (lka) rating from Fitch Ratings Lanka Ltd. with a Stable Outlook denotes expectations of low default risk and strong capacity for payment of financial commitments. Moreover LB Finance maintained its NPL rate at 2.37% while the industry rate was 5.9%.

In its endeavours to enhance shareholders’ value, LB Finance is committed to the highest standards of business ethics, corporate governance and risk management. 

Acknowledging the commitment to transparency, accountability and good governance in financial reporting, CA Sri Lanka bestowed many awards for the company’s Annual Report 2016/17 including the Finance Companies & Leasing Companies Gold Award, Integrated Reporting Best Disclosure on Capital Management Gold Award and Integrated Reporting Silver award. 

Further LB Finance was presented the National Business Excellence Award 2017 Runner-up in Non-Banking Financial Services Sector by the National Chamber of Commerce Sri Lanka. 

Moreover, LB Finance was crowned as the No. 01 Leasing and Finance brand by Interbrand Best Sri Lankan Brands 2017, being listed amongst the best 20 Sri Lankan brands. The selection criteria focused by Interbrand were mainly on brands that offer robust financial performance, plays the role of an influencer and possess considerable brand strength and value while maintaining regular and transparent financial disclosure

LBF believes agile and responsive digital information systems are critical to stay ahead of the curve. Having commenced its digitalisation journey as far back as 2011, the company is currently in the process of upgrading the existing MIS system to ensure the business is fully-equipped to provide maximum value to the customer. 

Licensed by the Central Bank of Sri Lanka under the Finance Business Act No. 42 of 2011 and listed on the Main Board of the Colombo Stock Exchange, LB Finance offers a variety of financial services including leasing, factoring, hire purchasing, micro finance, mortgage loans, housing loans, education loans, gold loans, currency exchange service and Western Union Money Transfer service through an island-wide network  of branches and Gold Loan Centres, offering unparalleled convenience to the customer.