An Echelon Media Company
Friday December 9th, 2022

Sri Lanka’s Sanasa Bank in the red in Dec 2018 quarter

ECONOMYNEXT – Sri Lanka’s listed Sanasa Development Bank reported a loss of 26.1 million rupees in the December 2018 quarter, down 113 percent from the previous year’s profit of 196.8 million rupees, on rising staff costs and bad loan provisioning, interim results shows.
Losses were 57 cents a share in the quarter. In the year to end December 2018, the bank reported earnings of 5.32 rupees a share on a profit of 259.6 million rupees, down 49 percent from a year earlier.
The share lasted traded at 60.70 rupees.

During the quarter, net interest income grew 38 percent from a year earlier to 1.2 billion rupees as interest income rose 24 percent to 3.5 billion rupees and interest costs increased a slower 17 percent to 2.3 billion rupees.

Net fee and commission income fell 58 percent to 32.8 million rupee while valuation gains from financial assets fell 82 percent from a year earlier to 34.8 million rupees.

Impairment costs including provisioning for bad loans surged 264 percent to 121.4 million rupees mostly
due to readjusting for new accounting rules.

Personnel expenses rose 51 percent to 571.3 million rupees.

During the year the bank expanded its staff by 10 percent to 1,504 and number of branched by three to 94.

The bank’s loan book expanded 16 percent from a year earlier to 77.5 billion rupees at end December 2018 while its deposit base grew a slower 13 percent to 67.5 million rupees.

Interest margin improved to 7.34 percent from 5.57 percent the previous year.

Gross non-performing loans rose to 2.57 percent of total loans, up from 2.07 percent a year ago.

Total shareholder funds, or net book value, grew 1 percent to 7.4 billion rupees while total assets rose 18 percent to 96.8 billion rupees.

Return on assets was down to 83 cents from 1.01 rupees a year earlier.

Tier I capital ratio fell to 10.91 percent at end December 2018, down from 12.42 percent a year earlier but above the regulatory minimum of 7.875 percent.

Total capital ratio was 12.46 percent, down from 14.59 percent a year ago but above the 11.875 percent minimum allowed.

On Tuesday, the bank announced plans to raise 10 million US dollars by issuing debentures to a consortium comprising Stichting Fondsbeheer DGGF Lokaal MKB and Triple Jump who will invest in the Sri Lankan bank on behalf of the Netherlands government.

The bank has also entered into an agreement to include unlisted subordinated five-year debentures for 3.5 billion rupees to bolster its capital under Basel III guidelines.

"The capital enhancement along with the loan proceeds raised by the bank will ensure that the bank will be geared to pursue loan book growth whilst maintaining healthy capital adequacy levels…and improving the profitability of the bank," it said in a letter to the Colombo Stock Exchange. (COLOMBO, 29 March, 2019)

Leave a Comment

Your email address will not be published. Required fields are marked *

Leave a Comment

Leave a Comment

Cancel reply

Your email address will not be published. Required fields are marked *

Sri Lanka president slams power regulator chief after conflicting with minister

ECONOMYNET – The powers to change the electricity tariff in Sri Lanka is vested with the Minister of Power and not the Public Utilities Commission (PUCSL), President Ranil Wickremesinghe told the Parliament.

The minister of Power and Energy, Kanchana Wijesekara has requested an upward price revision to be implemented in two phases both in January and July next year, saying the recent tariff hike was not enough for the state-run utility provider Ceylon Electricity Board (CEB) to continue uninterrupted power supply.

However, Jaynaka Ratnayake, the Chairman of the PUCSL had said  the recent tariff hike is enough for the CEB to cover the cost of production and it will not allow another price hike. However, he has said a twice a year price revision is necessary though it should be in April and October instead of January and July.

President Wickremesinghe said the PUCSL chief was opposing the tariff hike due to his personal reasons.

“The power is vested with the Minister and me. I am the one who made the PUCSL act and I know what is in it,” Wickremesinghe told the parliament on Thursday. quoting a letter from the Attorney General which mentioned provisions in the island nation’s Electricity Act.

Accordingly the Act, the PUCSL would be statutorily obliged to give effect to such policy. It is observed that neither the Act nor the PUCSL Act contains any provisions that empowers the PUCSL to change or act invariant of such policy guidelines.

“The Chairman of the PUCSL is misguiding the general public. I have to meet him and see,” Wickremesinghe said.

WIckremesinghe said the Chairman does not want the tariff hike because he owns one of the highest electricity consuming companies.

“He is the Chairman of the Trillium corporation. It is the firm that takes up the most energy”, he said.

The Trillium group is managed by Janaka Ratnayake and he also holds positions as the chairman and CEO of Trillium Property Management & Services Ltd., City Housing and Real Estate PLC, Trillium Residencies Ltd., Computer Care (Pvt) Ltd., and Rent a Comp Services (Pvt) Ltd., and JR Management Consultants (Pvt) Ltd.

“It means when the electricity bill increases, his expenses increase as well”

He said the CEB still has a loss of 300 billion rupees since 2013 and it needs to be covered.

The CEB issue can be solved only in three ways, either printing more money, increasing value added tax or increasing the tariffm, he said. (Colombo/Dec08/2022)

Continue Reading

Sri Lanka President bemoans over inconsistent LNG deals

ECONOMYNEXT – Sri Lanka President Ranil Wickremesinghe bemoaned over successive governments’ liquefied natural gas (LNG) deal that has brought in all the world powers into the discussion.

Wickremesinghe’s center-right United National Party (UNP) had discussions with India and Japan between 2002-2004 for an LNG project.

“Following dialogues with India and Japan, the UNP government could come to agreements to get two LNG power plants. After we were defeated the successor government, without cancelling those agreements granted it to New Fortress company in USA,” Wickremesinghe told the parliament.

“Thereafter, as they did not like New Fortress, they gave it back to Pakistan and China. So within the same premises, there were China, Pakistan, India, USA, Japan and only Russia was not there.”

“It was wonderful that a world war did not ignited there as there were five main powers in the world.”

“Now there is no LNG or anything here and now they ask me to solve this issue.”

Wickremesighe’s outburst comes as his government is forced to raise tariffs on power prices after successive governments failed to implement cheap and renewable power generation projects.

He said a total loss for the state-run Ceylon Electricity Board since 2013 was 300 billion rupees and a possible drought next year could increase the 2023 electricity cost to 420 billion rupees.

“If it rained, we need Rs. 352 billion while Rs. 295 is required if rained so much to have floods. How are we going to find this money? We would have to print money, but Rupee would depreciate. We would have to increase VAT but it would increase the price of all commodities or to charge it direct.” (Colombo/Dec08/2022)

Continue Reading

Air quality drop forces Sri Lanka to close schools; public warned

ECONOMYNEXT – A rapid drop in air quality in Sri Lanka has forced the Colombo government to close all schools across the country after a deep depression over Southeast Bay of Bengal, officials said.

The Education Ministry, issuing a special notice on Thursday said, it has decided to close all government schools for Friday, after discussing with the officials in Meteorology Department and Disaster Management Center.

An official said the drop was due to the deep depression over Southeast Bay of Bengal carrying the air from India.

Due to the depression over South east Bay of Bengal (370 km east of Trincomalee) has concentrated into a cyclonic storm “Mandous” by Wednesday night.

“Cyclone in the Bay of Bengal that is the prime reason for the increase in the pollution load as we receive more wind from India,” H.D.S.Premasiri, Senior Scientist, Coordinator-Air Quality, noise and vibrations at National Building Research Organization (NBRO) told EconomyNext on Thursday.

Officials said there is a likelihood of the cyclone moving west-northwestwards and further intensify into a severe cyclonic storm tonight and cross North Tamil-Nadu, Puducherry and South Andhra Pradesh coast around midnight of 09 th December and the maximum wind speeds will be 70-90 km per hour and can increase up to 90 in sea areas.

“Hopefully, today we can expect normalization in the environment and the effects of the fog will disappear”.

According to the NBRO’s real time Air Quality Index Indicator, the quality of air in northwestern coastal district of Puttalam has dropped drastically and indicated a particular matter (PM) 132, while Kegalle (85) and Mannar (84) were the districts which had next worst air quality.

According to NBRO, Battaramulla, Polonnaruwa, Dambulla, Kegalle, Mannar and Puttalam indicate a poor quality of air due to higher PM.

“The fog will lead to lung and breathing issues,” Premasiri said.

“So the public is warned to wear a mask when they travel outside. The pollution highly prevails in city areas and has a less impact on the other parts of the areas.” (Colombo/ Dec08/2022)

Continue Reading