LOLC posts Rs. 26.8 bn PBT; grows with global expansion strategy | Daily News

LOLC posts Rs. 26.8 bn PBT; grows with global expansion strategy

Microfinance leader in countries which it operates
Ishara Nanayakkara - Deputy Chairman and Kapila Jayawardena - Group Managing Director/CEO
Ishara Nanayakkara - Deputy Chairman and Kapila Jayawardena - Group Managing Director/CEO

LOLC Group releasing its year end results for 31 March 2019 registered another strong year to its stellar performance over the last decade. With a robust Profit before Tax (PBT) of Rs. 26.81bn, compared to Rs. 24.6 bn recorded in 2018, LOLC continues to surpass its own accomplishments.

In a statement on the annual performance of the Group, Kapila Jayawardena, Group Managing Director/CEO said, ‘We are proud of our resounding achievements this year, with a Group PBT of Rs 26.81bn, an extremely challenging task given the pressures of the prevailing macroeconomic conditions affecting most industries in which we operate. As a well-positioned regional force with a timely global expansion strategy and distributed revenue stream placed in short, medium and long term in both financial and non-financial sectors, the Group is insulated from any externalities, at the same time poised to grow exponentially.”

The Group, well served by its characteristic strength in the SME and microfinance sectors of the country, has been a catalyst in financial inclusion in Sri Lanka. Excelling on a national level, LOLC has undertaken a timely expansion to the region and has now established itself as a market leader in microfinance in the countries which it operates.

Regional expansion has not only offered LOLC a diversified revenue stream with increased financial stability but also have added resilience with a well spread risk profile. Therefore, it has made the Group susceptible for local externalities offering consistent growth.

LOLC’s maiden overseas investment PRASAC is a good testament to this. Invested in 2007, with mere 18%, PRASAC grew leaps and bounds to become the largest microfinance institution in the dollarized Cambodian economy.

Today, LOLC owns 70% of PRASAC, a company that clams USD 2.6 bn in assets, USD2.2 bn in portfolio, USD 1.5Bn in deposits and USD103 mn in PBT for the 12 months ending March 2019.

LOLC Cambodia, the fourth largest MFI in Cambodia has also recorded an impressive performance to conclude the year. The Group owns 97% of LOLC Cambodia that has an asset base of USD 687mn, a portfolio of USD 564 mn, a deposit base of USD 286Mn and recorded a profit of USD 28.5mn.

Reaffirming its regional expansion strategy, LOLC ventured into Myanmar in 2013. As a greenfield operation, LOLC Myanmar Microfinance Company Limited, has demonstrated a remarkable track record to become the 3rd largest among the 176 microfinance institutions in Myanmar.

In 2017, the Government of Pakistan and the Sultanate of Oman, invited LOLC to take up the major shareholding of their joint venture – Pak Oman Microfinance Bank, in recognition of LOLC’s outstanding contribution to the microfinance community.

With the Group’s technical expertise in areas such as risk management and proven track record in the microfinance field, Pak Oman is rapidly growing to become an important player in the Pakistani economy that accounts to a population of over 200 million.

The Group ventured into Indonesia in 2018, acquiring a controlling interest in PT Sarana Sumut Ventura (SSV).

Expanding its international footprint, LOLC invested in Philippines through LOLC ASKI Finance and LOLC Development Bank.

Today, with the financial sector representation in Cambodia, Myanmar, Pakistan, Indonesia and Philippines, that accounts for a gross revenue of 41%, LOLC has fully establish itself as a strong regional financial conglomerate.

The Central Bank of Sri Lanka imposed a consolidation plan to strengthen the financial sector of the country. Consequently, LOLC Finance PLC (LOFC) merged with its sister company, LOLC Micro Credit Limited in March 2018.

The merger was successful in many facets; it created the largest NBFI in the country with an asset base of Rs. 211Bn, a portfolio of Rs. 151Bn in addition to the efficiencies and synergies generated through the merger. The merged entity recorded a staggering profit of Rs.7.1 Bn at its first post merged financials amidst the challenging macroeconomic conditions prevailing in the country.

Commercial Leasing and Finance PLC has been an exemplary performer since its acquisition by LOLC in 2008. This year however, CLC recorded a PBT of Rs. 2 Bn, despite the adverse economic climate experienced in the year under review.

LOLC Development Finance PLC, formerly known as BRAC Lanka PLC, maintained strong compliance with statutory ratios with a CAR ratio of17.03%. However, the company was impacted the most compared to LOFC and CLC, with the ongoing economic implications that had direct repercussions to the microfinance sector resulting a loss of Rs. 140 Mn.

Seylan Bank, an Associate of LOLC Group also contributed Rs. 1Bn to the Group profits. The group’s insurance businesses, LOLC Life Assurance and LOLC General Insurance, has performed well during the year, positioning itself among the top 10 players in both the general and life segments.

Adopting the new SLFRS 09 and SLFRS 15 standards, the Group’s financial services companies made further provisions for bad and doubtful debts as required by these standards.

Browns Capital PLC merged with its immediate parent company, Browns Investments PLC during the year under review as a measure to strengthen capital structures and ensure further stability moving forward.

The Group penetrated its non-financial sector too in the international arena with its investments in Sierra Leone and Maldives. Sunbird Bio-energy Sierra Leone Limited, is the latest addition, and an integrated farm that generates power, sugar and bio ethanol.

The Company currently owns 23,500 hectares of agricultural estate which provides sugarcane, as well as a 380,000 Litres/Day Bio-Ethanol Plant and a 32 MW Biomass Power Plant. Looking forward, the Company is well positioned to add sugar production, cassava-based starch and ENA as by-products.

The Group’s Leisure portfolio made steady progress, holding 4 operational hotels: Eden Resort and Spa in Beruwela, Paradise Resort and Spa in Dambulla, Dickwella Resort and Spa and Calm Resort in Pasikudah and

There have also been strong inroads made in the Maldivian Leisure sector as LOLC Group has secured some of the most sought-after real estate in Male with construction on the Nasandhura Hotel and Apartment Complex.

 


 

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