The Finance Company in more losses in June quarter
ECONOMYNEXT – Sri Lanka’s The Finance Company Ltd, a troubled non-bank lender of the former Ceylinco Group, lost Rs333 million in the June 2016 quarter, down from Rs373 million a year earlier.
The publicly traded company reported earnings of Rs2.08 per share.
The lender said interest income grew 1 percent to Rs967 million, interest income grew 12 percent Rs884 million, interest expenses fell 3 percent to Rs873 million and interest income was a positive Rs11.2 million, compared to a loss of Rs57 million last year.
Loans loss provisions were Rs130 million, up from Rs102 million a year earlier.
Fee and commission income grew 20 percent to Rs25.8 billion.
The firm has assets of Rs23.7 billion in its books and customer deposits of Rs29.4 billion and other borrowings of Rs4.9 billion.
With Rs19 billion =of accumulated losses, the firm has a Rs19.4 billion hole in the balance sheet (negative net assets.)
The Finance Company, was one of a series of finance companies that got into trouble during the ‘Rata Perata’ credit bubble fired by the Central Bank and Treasury with low interest rates and steady currency depreciation from 2004 onwards.
Several finance companies collapsed after rates corrected in 2008 amid a balance of payments crisis.
In 2011, however, tight peg defence pushed up rates and arrested another housing, though there was a stock market boom. (Colombo/Aug13/2016)