Thursday, June 24, 2021

Commercial Leasing & Finance posts historic profits

CLC Executive Director/CEO Krishan Thilakaratne

Commercial Leasing & Finance PLC (CLC) recorded its best-ever financial year despite the severe challenges arising from the COVID-19 global pandemic through the year, achieving a growth of 34% in Profit Before Tax over the previous year to record Rs. 2.67 billion, while Profit After Tax rose by as much as 43% over the preceding year to reach Rs. 2.2 billion.

Meanwhile, Cost of funds decreased by as much as 23% to record Rs. 4,737 million in the year under review. The key factor for CLC’s success was its two-pronged strategy to navigate the unprecedented year: strengthening customer relationships and helping customers to plan their financial commitments as reflected in the 60,000 moratoriums granted by the Company, which accounts for approximately one-third of its loan portfolio in 2020/21.

Deposits grew by 32% during the year under review. CLC remained mindful of the fact that it needed to partner SMEs and micro business customers especially in times of such crises. In contrast, with the downturn in the Non-Banking Finance Industry (NBFI), CLC recorded a gross portfolio growth of 15%.

Another impressive achievement by the Company during 2020/21 is the Non-Performing Loan (NPL) ratio of 6.49% which is less than half of the industry average, thus reflecting the healthy portfolio of the company. Despite the strong portfolio, CLC has 107% provision cover over the NPL portfolio which is almost 100% asset backed.

Strengthening its footprint further, CLC is on a rapid expansion drive and currently offers the largest variety of products by any NBFI.CLC is also launching enhanced digital banking operations through the introduction of payment platforms such as iPay. CLC Executive Director/CEO Krishan Thilakaratne said, “More importantly, this milestone was gained while supporting customers whose businesses were badly affected by the pandemic through which we earned the trust of our customer base. The confidence placed in CLC by the regulator is also at its highest as the Company achieved a capital base of Rs. 21 Mn, which amounts to a capital adequacy ratio of 19.44% as against the minimum regulatory ratio of 6.5%. What excites us the most is the fact that we achieved growth in profits in a sustainable manner.”

Through its outstanding performances in 2020/21, CLC has become one of the key contributors to the LOLC Group’s excellent financial performance in the year under consideration while strengthening its identity as one of the leading NBFIs in Sri Lanka.

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