LB Finance ends 2019/20 with RS. 5.2 bn PAT | Daily News


 

LB Finance ends 2019/20 with RS. 5.2 bn PAT

LB Finance recorded a strong performance for the financial year ended 31st March 2020. The Company maintained the operating cost within stable margins to post an operating profit before tax on financial services of Rs. 9.9 billion for the year.

Income for the year increased by 7% year-on-year to Rs. 31.2 billion at the end of the financial year under review of which interest income to the Company was Rs 29.2 billion, illustrating a 7 percent Y-O-Y improvement. Net interest income for the year was Rs. 15.5 billion, indicating an 8% increase in comparison to the previous year. The Company’s total operating income reflected a growth of 8% at Rs. 17.6 billion.

As a prudent measure, the company considered the Portfolio Delinquency State, Probability of Default (PD) and Loss Given Default (LGD) as at 31st March 2020 which partially includes the impact of COVID -19 for the impairment calculations.

The Company’s cost to income ratio stood at 33 percent, denoting its efficient cost management. Meanwhile, the Company’s total assets as at 31st March 2020 stood at Rs. 144 billion in comparison to Rs.136 billion as at 31st March 2019, with more than 90% of them being income generating assets which are backed by solid securities.

Despite the hardships that were faced by the sector, LB Finance managed to have a portfolio with 5% growth which was commendable given that it was achieved at a time when overall private credit expansion was highly subdued.

“Our profitability has been increasing every year surpassing all our peer groups. This year too, in spite of challenging unexpected external shocks, LBF showed our resilience, prudent management skills and sustainable pursuit of growth. Nevertheless, we consistently remain a step ahead of such external challenges by adopting prudent practices, anticipating customer needs and seeking opportunities to maintain sustainable competitive advantage,” commented Sumith Adhihetty, Managing Director of LB Finance PLC.

LB Finance’s total capital adequacy ratio as at the end of the financial year stood at 20.75 percent as compared with a minimum regulatory requirement of 11%.

LB Finance consistently maintains the industry’s lowest NPL (Non-Performing-Loan) ratio which shows the superiority of its asset quality. This year too the Company succeeded in maintaining an NPL ratio of 3.93 percent and a net NPL of -0.12 percent through prudent lending and efficient recovery methods.

Meanwhile, the Company’s first overseas venture, LB Micro Finance Myanmar Ltd, is now making profits, less than three years since its inception. In addition to this, LB Finance further enhanced its technology offering, which has gained a reputation as the best among all finance companies, to enhance customer convenience.

 


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