Lanka Credit & Business Finance Limited (LCB Finance) will create history by being the first Finance Company from the Southern province to be listed in the Colombo Stock Exchange on October 25.
Rated by ICRA at [SL] B+ Stable, LCB will also raise Rs 500 million through an Initial Public Offering (IPO) issuing 1.25 million shares at four rupees each and promoting the IPO as 7.7% discount to the upper limit to strengthen its balance sheet and fund future expansion. Financial advisor for the IPO is NDB Investment Bank.
“Firstly this amount will be used to increase our branch network from 8 to 23 covering the North and East in one year,” said CEO/Executive Director, LCB Finance, K.G. Leelananda.
“Our branch expansion plans include the opening of four branches in Akuressa, Tangalle, Deiyandara, Kuliyapitiya and Tangalle by the end of the year. The company has offered several moratoria to their customers and would relook at extending them further.
We will also offer additional credit facilities to tea small holders, farmers, dairy and agricultural sectors. In addition to supporting low income earners we will also introduce new micro finance products.”
Recalling the past Leelananda said they commenced business as a company registered under Companies Act, under Lanka Credit and Business Limited on April 18,2016 and thereafter opened their first office in Galle in May 2016.
“We acquired City Finance Corporation limited defunct for 8 years subject to a Conditional approval granted by the Central Bank of Sri Lanka and infused Rs. 1.5 billion to it within one month. It had 2,800 depositors with Rs 543 million deposits and we settled all of them within one year under three trenchers.
We are proud to say that LCB Finance to date is the only Finance company to take over a defunct financial institution, settle all their depositors and even pay interest for them during settlement!”
Chairman Prof. Abeyratne Bandara said, “LCB Finance, a licensed Finance Company under the supervision and regulation of Central Bank is listing on the CSE to meet the dual objectives of fulfilling its regulatory core capital requirement and financing. “LCB hopes to invest a sizable amount from this IPO funds toward a digital roll out taking the banking sector to the customers especially in unbanked areas and also have seamless digital connectivity between clients and the LCB branches.”
Posting a steady performance, LCB Finance Ltd recorded a profit before tax of Rs. 31 million for the first quarter of the financial year 2021/22, indicating a growth of 68% in comparison to the corresponding period in the previous financial year.
The company’s net operating income for the same period increased by 52% to Rs. 93 million.
Total assets for the period stood at Rs. 3.6 billion in comparison to Rs. 3.2 billion recorded during the corresponding period in the previous financial year. “Despite the prevalent pandemic, we continue to pose complex economic challenges, remain confident of our ability to pursue sustainable growth and create value for all stakeholders,” he said.
“We cater to the needs of individuals across all categories of the economy, the overall logic of operations is strongly inspired by and flavoured with the idea that challenges are best met collectively and that such an approach adds value to individual effort,” he said.
LCB was recognized as the Emerging Finance Company of the year 2019 and awarded “Fastest Growing Non-Banking Financial Firm in Sri Lanka 2021” at the Global Economics Awards 2021 in the UK.
LCB has 8 branches and has a customer base of over 26,000 and assets worth of Rs. 3.7 billion as at end of F/Y 2021. Total shareholders’ funds amount to Rs. 2.1 billion with 4.75% returns over equity. LCB has grown considerably with Business Loans, Micro Loans and Leasing, Gold Loans, and Savings products. (SS)
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