Sri Lanka’s Nation Lanka Finance in the black in June quarter
ECONOMYNEXT – Sri Lanka’s Nation Lanka Finance reported a profit of 19.2 million rupees for the June 2018 quarter, compared to a loss of 53.8 million rupees a year earlier, on improving margins and lower provisioning for bad loans, interim accounts showed
The finance company reported earnings of 3 cents a share in the June quarter, up from a loss of 7 cents a share a year earlier. The share closed unchanged at 80 cents on Tuesday.
Nation Lanka reported a net interest income of 291.5 million rupees in the June quarter, up 9 percent from a year earlier, as interest income rose 9 percent to 564.6 million rupees and interest expenses grew 10 percent to 273 million rupees.
Income from property development grew 48 percent to 2.2 million rupees.
Provisioning for bad loans fell 69 percent from a year earlier to 32.4 million rupees in the June quarter.
Administrative expenses increased 18 percent to 114.6 million rupees and depreciation charges fell 6 percent to 14 million rupees.
Other expenses grew 10 percent to 119.9 million rupees.
Nation Lanka’s loan book expanded 33 percent from a year earlier to 6.78 billion rupees at end June 2018.
Gross non-performing loans were 13.97 percent of total loans, down from 16.99 percent a year earlier.
Investment properties grew 16 percent to 771.7 million rupees.
Deposits had grown 4 percent to 7.72 billion rupees. Bank borrowings fell 33 percent to 109.78 million rupees.
Core capital adequacy was at 8.49 percent, compared to a regulatory minimum of 5 percent, but lower than 9.41 percent it recorded a year earlier.
Total capital adequacy was 11.59 percent, above the 10 percent regulatory requirement, but lower than 13.06 percent a year earlier.
Last March the company proposed a rights issue to raise 623.8 million rupees to comply with regulatory capital requirements.
The company is offering 25 shares for every 27 held at 1 rupee a share. Allotments will be announced to shareholder on 24 August, Nation Lanka announced Tuesday.
The new management of Nation Lanka introduced a restructuring programme to revive the former Ceylinco Group-company.
In 2016, a rights issue raised 502 million rupees to strengthen capital.
Minimum core capital is capped at 1 billion rupees at January 2018, and will increase by 500 million rupees each January to 2.5 billion by 2021.
Nation Lanka’s core capital at end June 2018 was at 935.7 million rupees, short of the regulatory requirement. (COLOMBO, 25 July 2018)