Capital gains from the sale of subsidiaries and a stronger focus on debt recovery in 2009 have enabled Seylan Merchant Bank PLC (SMB) to end the year on a positive note and well positioned to implement significant structural changes in 2010.
According to the company's Annual Report, SMB converted a net loss of Rs 618.7 million in 2008 to a net profit of Rs 158.3 million in 2009, an improvement of Rs 777 million. Gross income for the year grew 17 per cent to Rs 391.5 million.
Helped by the sale of an 81 per cent stake in Seylan Merchant Leasing PLC to Peoples Leasing Company for Rs 445 million in mid 2009 and other disposals, SMB was able to settle its maturing liabilities. Simultaneously, the company's debt recovery initiatives resulted in the collection of Rs 82 million out of a provision of Rs 338 million made in the previous year for Bad and Doubtful Debts, the report discloses.
An interest rebate granted by Seylan Bank PLC on the banking facilities provided to SMB also facilitated the recovery, SMB Deputy Chairman Rohan Senanayake said.
In a year of consolidation of existing resources and one in which no significant new business was carried out, SMB improved its Other Income by 149 per cent, from Rs 38.9 million in 2008 to Rs 244.4 million in the year reviewed.
The company also halved its overheads and expenses on premises, equipment and establishment, and kept personnel costs on par with those of the previous year.
"Despite scaling down operations in 2009 and with no new products introduced to the market, we were able to maintain staff retrenchments to a bare minimum," Mr. Senanayake reported.
Loan Loss Provisions improved by Rs 314.4 million, from Rs 333.8 million in 2008 to Rs 19.4 million in 2009.
"Having survived the financial crisis of 2008 and 2009, SMB's main focus in 2010 will be to continue its regained stable position in the non bank financial sector," Mr. Senanayake said, disclosing that the Board of Directors has already proposed several major structural changes to be implemented in the current year with the consent of the Central Bank of Sri Lanka.
The Board of Directors of SMB PLC comprises of Messrs R. S. W. Senanayake, M. S. I. Peiris, R. Renganathan, P. A. Jayawardena and E. T. L. Ranasinghe. Messrs G. C. B. Ranasinghe and A. N. Bahaudeen were appointed independent directors with effect from 1st March 2010. The stated capital of the company as at 31st December 2009 was Rs 565.8 million, consisting of 44,503,120 ordinary voting shares and 100,000,000 ordinary non-voting shares.
source - www.dailymirror.lk
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