Mr. Dhammika Perera- Executive Deputy Chairman- LB Finance PLC
Mr. J A S Sumith Adhihetty- Managing Director- LB Finance PLC
LB Finance accomplished a stellar performance overall for the year ended March 31, 2017. Total assets crossed the Rs. 100 Bn milestone to reach Rs. 102.8 Bn as at March 31, 2017, a growth of 21.6% over the previous year. The Company has been able to record compounded annual growth rates (CAGR) of 19.2%, 17.3% and 19.6% respectively in total assets, customer deposits and loans & advances over the past five years.
Profit before tax on financial services grew by 17% reaching Rs. 6.9 Bn for the financial year 2016/17, the highest recorded among all the players in the Non-Banking Financial Institutions (NBFI) Sector for the year. Correspondingly, profit before income tax too grew to Rs. 5.9 Bn, the highest ever recorded in the Company’s history, albeit at a lower rate of 10% year on year due to an increase in the VAT rate. Profit after tax was recorded at Rs. 3.9 Bn with a growth of 5%. Profitability in terms of Return on Assets and Return on Equity were recorded at satisfactory levels of 4.2% and 34.1% respectively for the year.
This is a commendable achievement given the challenging external environment during the year characterized by, amongst others, tight liquidity, rising interest rates, change in import duties on vehicles, restrictions on lending imposed by the regulator and lacklustre investor confidence.
Commenting on the performance, Sumith Adhihetty, Managing Director of LB Finance stated, “In a year filled with many challenges, we proved our resilience by successfully maintaining our growth momentum and meeting the challenges posed by the external environment and asserted our dominance in the industry. The financial stability we have demonstrated is a testament to the trust placed in us by our valued stakeholders for the last 46 years.”
LB Finance recorded a strong, above industry average total capital adequacy ratio of 17.1% as at March 31, 2017 against the minimum regulatory requirement of 10%. Further, A- (lka) rating from Fitch Ratings Lanka Ltd. with a stable outlook denotes expectations of low default risk and strong capacity for payment of financial commitments.
In its endeavors to enhance shareholders’ value, LB Finance is committed to the highest standards of business ethics, corporate governance and risk management. Acknowledging the commitment to transparency, accountability and good governance in financial reporting, CA Sri Lanka bestowed many awards for the Company’s Annual Report 2015/16 including the overall special Gold award for Integrated Reporting Best Disclosure on Capital Management at its 52nd Annual Report Awards. The report also won Bronze at the CMA Excellence in Integrated Reporting Awards.
Taking up the challenge to offer a widely differentiated approach in its offering of products and services, LB Finance leveraged technology to capitalize on digital channels and platforms that empower and free employees to better focus their energies on serving the financial needs of its customers – including a whole new generation that demands a personalized approach.
Established in 1971, LB Finance succeeded in building an unmatched reputation as one of Sri Lanka’s most trusted financial institutions as evident from the total deposit base of over Rs. 60 Bn, one of the largest in the NBFI sector.
Licensed by the Central Bank of Sri Lanka under the Finance Business Act No. 42 of 2011 and listed on the Main Board of the Colombo Stock Exchange, LB Finance offers a variety of financial services including Leasing, Factoring, Hire Purchasing, Micro Finance, Mortgage Loans, Gold Loans, Currency Exchange service and Western Union Money Transfer service through an island-wide network of 154 branches and Gold Loan Centres, affording unparalleled convenience to the customer.