Oct 03, 2011 (LBO) - People's Leasing Company, Sri Lanka's largest leasing firm which plans to raise 70 million US dollars in an initial public offer, is seeing strong growth in lease volumes on the back of a post-war economic revival.
People's Leasing Company chief executive D P Kumarage said the firm almost doubled the volume of disbursements last year and expects at least another 50 percent growth this year.
The company, a subsidiary of state-owned People's Bank, had total grantings of 41.8 billion rupees in the financial year ended March 31, 2011, exceeding the budgeted figure of 26.4 billion.
"The leasing industry is growing fast," Kumarage told LBO in an interview.
"The north and east has untapped potential. So there will be demand, especially for agricultural-type of vehicles. We see that demand now."
Demand is also growing strongly from the fisheries sector, especially from the northern and eastern coasts, which bore the brunt of the war and is now recovering.
People's Leasing Company is planning to raise 70 million US dollars in the country's second largest initial public offer so far with the sale co-managed by NDB Investment Bank and Capital Alliance.
The company has six subsidiaries; People’s Leasing Finance, People’s Microfinance Limited, People’s Insurance Limited, People’s Leasing Fleet Management Limited, People’s Leasing Property Development Limited, and People’s Leasing Havelock Properties Limited.
Kumarage said the entire industry is doing well owing to pent-up demand after the end of the island's 30-year ethnic war in 2009.
Among the fast-growing sectors in the leasing business are dual-purpose vehicles and commercial vehicles.
Demand surged after the government slashed import duties, then slackened after duties were raised again slightly, and is now picking up again.
Kumarage expects demand to remain strong especially with high economic growth and rapid growth in the construction industry.
"Also, we're penetrating more in to the rural sector with our 'window' offices through the People's Bank branch network. We will open almost 10 branches this year."
Kumarage also sees potential in new products like margin trading on the stock market which People's Leasing Co. started in March 2011 given the strong performance of the Colombo Stock Exchange after the war, tighter rules and anticipated future growth of the economy.
People's Leasing Company group posted profits of 2.6 billion rupees in the year to March 2011 on revenues of 10.6 billion rupees. It had gross assets of 63.8 billion rupees and equity of 8.4 billion rupees.
source - www.lbo.lk
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