Tuesday, July 5, 2011

Sinhaputhra fortified by strong liquidity buffers

Sinhaputhra Finance PLC has maintained a strong liquidity ratio above its peers at 13% and sits on an unutilized potential of debt securitization of Rs. 1.7 billion. Sinhaputhra’s Fixed Deposit base is presently close to the Rs. 3 billion mark with capital and reserves of Rs. 484 million.

In the recent past, Sinhaputhra Finance PLC made significant increases to its Other income  with the advent of Vehicle, Agricultural Implement, and handling customers pre-booked Imports of a variety of products. 

Furthermore, such imports enjoy leasing and HP rates from Sinhaputhra matching the lowest rates of commercial banks.

Its core business of HP and Leasing along with Gold loans have grown steadily with over 1.9 billion in investments in the last 12 months.  A unique feature being additional collateral in way of immovable assets such as property being tied up in contracts where a high percentage of the vehicle value is being advanced.

Sinhaputhra’s recovery efforts have by and large ended up in a success story due to this conservatism adopted by its founder Tissa Wijeyeratne, albeit a hindrance to aggressive marketing it has paid dividend in recovery which is the hall mark of Sinhaputhra’s strength during 32 years of financial service.

Asset quality which is technically measured on the number of months in arrears rather than an isolated consideration of recent payments, categorizes certain debts as non-performing - although such debts are more lucrative in interest and overdue interest income to a company which recognizes such on a cash basis. 

As the ultimate litmus test of asset quality is in final recovery, Sinhaputhra’s management has geared to strengthen a contract at the initial point.

source - www.dailymirror.lk

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