MBSL forecasts a modest growth trend in Q2 of 2014

(Created date: 30-Mar-2015)

The Merchant Bank of Sri Lanka (MBSL) signified a slow but steady growth trend for 2014, yielding returns from the expansion drive launched in 2012.

MBSL posted revenues of Rs. 1,204 million for the first six months of the Financial Year 2014, in comparison to the corresponding period of 2013 where the posted revenue was Rs. 1,177 million. Thereby in the fiRs.t six months of 2014. MBSL revenue recorded a 2.32% upsurge, in comparison to the corresponding period of the year before.

Furthermore, by the end of the said quarter MBSL also recorded Rs. 31.92 million income from fair valuing the company's share Portfolio. The Net Interest Income which was at Rs. 438 million in the first six months of 2013, saw a modest growth of 14% in the corresponding 6 month period ending 30th June 2014. Henceforth the recorded Net Interest Income peaked at Rs. 501 million owing to term loans, micro finance and personal loans.

Interest Expenses also noted a positive decrease of 11.73% in the Second Quarter of 2014 as against its corresponding period the year before. Accordingly the Interest Expenses that were at Rs. 343 million in the 2nd Quarter of 2013, dipped to Rs. 303 million for the same period of 2014.

On the other hand, the Net Fee and Commission Income of MBSL recorded a negative growth of 15% during the fiRs.t six months of 2014. This marks a drop from Rs. 22.5 million in the corresponding period of 2013, to As 19.1 million in 2014.

The company profitability took a marginal downturn mainly due to an increase in impairment provision in the leasing and hire purchase portfolio with less interest income generating from leasing and hire purchase portfolio as a result of the low market interest rates. The Leasing Market too experienced a negative growth rate in the same period. However total operating income has increased by 16.48% compared to corresponding period of 2013 and profit after tax calculated in accordance with CBSL direction on provisioning has increased to As 87.95 million from As 80.47 million from the corresponding period of last year, which is an increase of 9.3%

The Company recorded a Profit Before Tax (PBT) of As 99.2 million, while the total Asset Base of MBSL reached 13.8 billion as at 30th June 2014. Compared to As 12.86 billion that was recorded as at 30th June 2013; this reflects a growth of 7.06% for the period in reference. The most significant contributors for the growth of the Company's Asset Base were Loans & Advances to Customers.

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