LOLC records Rs. 19.8 b PAT | Sunday Observer

LOLC records Rs. 19.8 b PAT

   Kapila Jayawardena  -Ishara Nanayakkara
Kapila Jayawardena -Ishara Nanayakkara

LOLC Group (LOLC) concluded another financial year on a high note as per the results for the year ended March 31, 2020. LOLC posted Rs.19.8 billion Profit after Tax (PAT) for the year in comparison to Rs. 19.6 billion PAT last year.

While the Group performance was affected by local externalities, such as the Easter Sunday attack, the subdued economic growth and the political instability in FY19/20 that resulted in the company to record dips in the net interest income and hikes in impairment charges, LOLC enjoyed its stellar performance largely based on the earnings stemming from its overseas financial operations.

The Group recorded the board’s decision to sell its 70% stake in PRASAC to the South Korean KB Kookmin Bank for $603 million in January this year.

In spite of the challenging and unexpected external shocks, LOLC Finance PLC (LOFC) holds an asset base of Rs.192 billion, a portfolio of Rs. 134 billion and deposits of Rs.99 billion. The company posted Rs.3.9 billion PAT in the year under review. LOFC as the leading impact lender, holds the largest pool of Development Finance Institutions (DFIs), guiding their respective development goals for Sri Lanka.

LOLC Development Finance PLC, formerly known as BRAC Lanka PLC, made a strong recovery in the year under review by recording Rs. 176 million PBT from a loss of Rs. 140 million in the last year following the alignment of its business strategies on restructuring the inherited SME portfolio. The company reduced its credit loss provisioning by 35% through the implementation of prudent strategies to improve collection and recoveries.

LOLC is confident on its growth prospects in the medium term with the gradual recovery of the global travel and leisure industries amid the lacklustre outlook of the tourism sector due to the Covid-19 pandemic.

The Group holds its footprint in the local plantation sector through Maturata and Gal Oya plantations, where the business focus lies in the value addition of cinnamon products and sugarcane cultivation.

The Group exited from its healthcare assets due to the challenging regulatory environment of the sector by disposing of Browns Hospital in Ragama for a consideration of Rs. 1.6 billion.

Group Managing Director/CEO Kapila Jayawardena said, “2019/20 has been a difficult year due to externalities affecting most industries, but we are pleased with our strong performance this year, with a Group PAT of Rs. 19.8 billion which is largely contributed by our strategic foreign ventures. With this standing, we are proud to be the most profitable listed entity for the second consecutive year. With a timely global expansion strategy, well diversified revenue streams and a dynamic workforce in place, we will ambitiously look forward to stride ahead with consistent performance during these turbulent times.”