Despite challenging business environment:
Arpico Finance records 36 percent growth in 2008-2009
Arpico Finance PLC achieved 36 percent growth in 2008-2009 compared
to the preceding year with a total income of Rs. 319 million, an
increase of Rs. 85 million over the previous year.
Pratapkumar de Silva
Despite the backdrop of low business confidence and adverse economic
factors such as inflation and volatile interest rates, the company’s
pre-tax profits dropped by 22 percent while post-tax profits declined by
This was commendable considering the contraction of the financial
system, said Chairman, Arpico Finance Company PLC, Pratapkumar de Silva
in the annual report 2008-2009.
Registered finance companies experienced the most turbulent and
challenging year during 2008-2009.
The crisis originated with the failure of unregistered and
unregulated financial institutions due to breach of trust. The crisis
then increased into the registered finance companies sector too. The
timely intervention by the Central Bank was commendable and this action
averted a major crisis in the financial system.
The Central Bank granted relief to the sector strengthening the
management of troubled finance companies. Arpico Finance PLC’s
investments grew by 20 percent to reach Rs.144 million despite the
business environment being unproductive.
The industry’s growth of accommodation granted for the year 2008 was
Moreover, the company also invested Rs.111 million in gold loans and
Rs.61 million in real estate projects.
The year also recorded a growth in interest earning assets by Rs. 282
million or 37 percent to Rs. 1,053 million.
grow by 20 percent
* Total asset base reaches Rs.
* Successful in meeting
The total assets base of the company reached Rs. 1,394 million which
increased by 28 percent.
The Company’s cash inflow from its core business lines of lease/hire
purchase and real estate were the main sources of funding for
Additionally, Rs. 100 million was raised through securitization while
the deposit base increased by Rs. 29 million.
The company maintained a liquid asset ratio of 25 percent, which was
above the statutory minimum.
Despite the liquidity crunch in the market the company was successful
in meeting its obligations to all stakeholders - depositors, lenders or
clients seeking advances without committing to high cost borrowings in
adverse market conditions.
However, we look forward to the year 2009-2010 with optimism.
The military success in defeating terrorism, one of the biggest
obstacles for economic development, is certain to improve the investment
climate, he said.
C de S