Siyapatha Finance net profits soar 52% to Rs.500mn in FY17
Siyapatha Finance, the largest subsidiary of the Sampath Bank group, recorded an after-tax profit of Rs.498.86 million for FY17, a growth of 52 percent in comparison to the Rs.327.28 million reported in FY16.
Under gross income, the company’s total interest income grew 62 percent year-on-year (YOY) to Rs.4.6 billion.
The company said this was made possible by the improvement in business volumes, which enabled the company to achieve significant strides in its business segments of leases and loans whilst managing risk and return at both product and business levels.
The growth in profitability was attributed to the significant increase in the net interest income (NII) and net fee and commission income.
The YOY growth in NII was 51 percent in FY17, generating a NII of Rs.1.84 billion in comparison to the Rs.1.22 billion gained during the previous year.
Meanwhile, the increased profitability levels drove up the return on assets (ROA) to 1.91 percent and return on equity (ROE) to 23.05 percent, which was respectively 1.81 percent and 18.35 percent in FY16.
During FY17, the company reached a significant milestone with the asset base reaching Rs.29.81 billion. This reflects a growth of 43 percent over the year 2016 and a CAGR of 33 percent over the last five years.
The company has significantly increased its lending portfolio surpassing the industry growth averages, which is noteworthy, given the challenging business environment that prevailed in 2017. Siyapatha Finance introduced loans to its product portfolio in the second half of 2016 and in the year under review, a net growth of Rs.1.98 billion was achieved, marking an increase of 266 percent, which is a significant achievement within the second year of operations.
Leasing/hire purchase expanded by Rs.5.4 billion, reflecting a 37 percent growth since 2016 with a total portfolio of Rs.20.12 billion, while the gold financing portfolio stood at Rs.2.56 billion, recording an augmented growth of Rs.794 million, an increase of 45 percent.
The contribution by bold financing remained at 9 percent against the total advances.
The importance of customer deposits in the compositional mix of total funding has increased to 36 percent from 19 percent in 2016. Deposits grew by Rs.5.97 billion, recording a growth of 178 percent over the preceding year.
FY17 also saw a significant improvement of 28 percent in shareholder funds.
As of December 31, 2017, the capital adequacy ratios were 9.44 percent for Tier I and 14.16 percent for Tier I and Tier II, against the regulatory requirements of 5 percent and 10 percent, respectively.
The total capital adequacy ratio has increased to 14.16 percent from 13.93 percent in 2016, which was supported by the subordinated debentures of Rs.1.0 billion issued to strengthen the capital base of the company.
“We, at Siyapatha Finance, are extremely proud of our financial results for 2017. We are especially happy with the 178 percent growth of deposits and the noteworthy improvement of shareholder funds. These are testament of the customer’s growing confidence in Siyapatha Finance,” Siyapatha Finance MD Saman Herath said.