Sri Lankaâ€™s Peopleâ€™s Leasing Sept quarter net down 16-pct
ECONOMYNEXT – Sri Lanka’s People’s Leasing & Finance (PLC) said net profit for the September 2017 quarter fell 16% to Rs940 million from a year ago with loan growth stagnant amid higher impairment charges and tax costs although deposit growth was strong.
Earnings per share were 62 cents, according to interim results filed with the stock exchange. EPS for the six months to 30 September 2017 was down 19.4% to Rs1.16. the share was trading at Rs17.30 Thursday.
PLC, a subsidiary of People’s Bank, said interest income rose 24% to Rs6.8 billion during the quarter while interest expenses rose 28.6% to Rs3.7 billion with net interest income up 18.7% to Rs3 billion.
There was a sharp rise in impairment charges to Rs410 million during the period, the accounts showed. Value Added Tax and Nation Building Tax on financial services rose 56% to Rs330 million.
PLC’s loan growth was stagnant at Rs136 billion although customer deposits grew 31% to Rs58 billion.
Bartleet Religare Securities attributed the fall in profits to “slow credit growth and higher than expected loan losses in leasing and Hire Purchase book.”
The Islamic finance segment reported flat earnings, while insurance unit reported increased profitability aided by higher premium income and investment income, it said in a report.
The overall loan book growth remained flat in line with the industry trends, Bartleet Religare Securities said.
“PLC recorded a credit growth of 1% for the quarter. This is largely due to macro slow down and decline in motor vehicle registrations subsequent to increase in Loan to Value (LTV) ratios and higher borrowing costs,” it said.
“With PLC aggressively expanding into non vehicle category recently, the asset mix has now changed to 54%:32%:7% of Lease HP, Non vehicle loans and Islamic Finance.”
(COLOMBO, October 26, 2017)