MBSL records Rs.92 mn turnaround 2Q net profit

Merchant Bank of Sri Lanka & Finance PLC (“MBSL” or the “Company”) demonstrated a remarkable t urnaround i n performance during the quarter ending 30th June 2015 to record a net profit of Rs.92.44 million, compared to a loss of Rs. 30.26 million in the corresponding quarter of last year.

Meanwhile the MBSL Group (comprising of MBSL and its subsidiaries) also posted strong recovery to achieve a net profit of Rs. 95.07 million, compared to a loss of Rs. 46.01 million the previous year.

The robust growth in performance is an attestation to the inherent soundness of th e Gr o u p ’s gr o w t h strategy. Organisation-wide efforts to develop a unified operational model, priming the organisational objectives to meet t he ever changing market needs and requirements synergized the whole process to create win-win options. Clear directions given by a professional board paved the way for the achievement.

During the quarter, MBSL focused on consolidating and optimising the branch network with the objective of generating positives arising from multiple business lines. Accordingly, three branches were relocated during the quarter whilst two city branches were merged. The period under review also saw the Group further widening the product portfolio, with the launch of a special leasing scheme for hybrid vehicles.

The Group generated a total income of Rs. 1.32 billion during the quarter, enabling an expansion in net interest income, which grew 7.6 percent during the period to Rs. 503.01 million. Meanwhile, Group net operating income also recorded robust growth of 24.8 percent during t he quarter to Rs. 520.66 million. During the period concerted efforts were made to strengthen recovery efforts and improve credit risk management measures, resulting in the Group’s i mpairment l osses dropping substantially to Rs. 88.62 million, from Rs.208.41 million the previous year corresponding period.

Increased efficiencies and emphasis on cost rationalisation enabled MBSL to reduce its total overhead costs by 7.0 percent during the quarter, adding a further boost to profitability.