"Interest rates in Sri Lanka dropped and almost came to a single digit and we came to benefit from that," Kamal Yatawara, chief executive of The Finance Company said.
"During this period we were able to reduce operation costs by 50 percent."
Yatawara said operating expenses which stood at 796 million in October is down to 350 million by November 2010.
The Finance had a run on deposits after the collapse of Golden Key Credit Card Company, an unregulated finance company that was part of the Ceylinco group defaulted nearly 27 billion rupees of public's deposits.
The Finance was heavily into property and it took a further hit after land prices tanked following a burst bubble in 2008.
"We were competing fiercely against Ceylinco group companies. Now we can buy land cheaper and sell at market rate or lesser," Yatawara said. "Earlier we created markets and created prices."
But not the firm was liquidating its land holding with a pick up in the market.
The Finance currently has about 3,000 land blocks in the country of which about 300 is sold every month, he said.
Nearly 40 percent of The Finance's assets are in real-estate, Yatawara said.
The firm had provided 450 million rupees from 2008 to write down property prices following the Golden Key collapse.
"We have a 5 acre land (block) in Colombo which got offers for 500 to 600 million rupees a yare a go has got an offer for 1.2 billion rupees now," Yatawara said.
He said the property sector is giving approximately 30 percent returns now.
The Finance will allow customers to convert up to 10 percent of deposits to equity.
"We have allowed depositors to convert up to 10 percent of equity so they can make capital gains in future," Yatawara said. "We have limited it to depositors who have been with us during the crisis or made fresh depositors during the crisis."
source - www.lbo.lk
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