- Non-Performing Loans at 60% below the industry average
- Profits increased by 47%
- Portfolio grew by 5%
- Deposits rose by 19%
Commercial Leasing & Finance PLC (CLC) delivered a powerhouse financial performance despite the wider economic and industry volatility caused by the COVID-19 pandemic. CLC recorded excellent numbers for the first nine months of the financial year ending 31st December 2020, despite challenging market conditions faced by the Non-Banking Financial Institution (NBFI) industry. Profit Before Tax grew to Rs. 2.3 Bn as at 31st December 2020, over the first nine months of the financial year under review. CLC recorded Profit After Tax of Rs. 1, 922 Mn, reflecting an increase of 65% over the previous year. Cost of funds reduced by 23% while overheads increased by only 3%. The Company’s performance is a result of excellent management of its Non-Performing Loans (NPLs) and cost of funds, while sustaining revenues by maintaining its product mix optimally.
CLC’s low NPL ratio compared to the industry is a result of its well-secured asset base and superior credit quality. Maintaining low NPLs despite the adverse impact on the market during first and second waves of the pandemic is a testimony to strong customer relationships the Company has built.
Further, CLC’s total assets exceeded Rs. 72.2 Bn during the period under review, making it one of the largest NBFIs in the country. CLC’s portfolio is well-diversified into all sectors of the economy – spanning auto finance, agri finance, SME finance, microfinance, Islamic Finance, gold loans, and receivable finance through factoring.
Equally significant is the growth of its deposit base by 19% during the period under review which reflects public confidence in the Company’s financial stability. CLC’s capital base exceeded Rs. 21 Bn as at December 2020, recording a 19% increase, which is far above the regulatory requirement with a Tier One capital ratio of 20.95% against Central Bank of Sri Lanka’s mandatory level of 6.5% and with Tier Two capital at 20.13% as against the regulatory requirement of 10.5%.
Expanding further, CLC Executive Director/CEO Krishan Thilakaratne said, “Our excellent nine-month performance is a result of top notch credit quality maintained over the years. We are optimistic about ending the financial year with even stronger results. Looking ahead, we plan to further expand our branch network by 15 more branches in the next financial year in order to leverage the high equity and brand value enjoyed by CLC across the country.”
As a further testimonial to its robust financial performance, CLC was reaffirmed as SL (A) stable by ICRA Lanka Ltd., which reaffirms its stability for customers.
Commenting on the exceptional nine-month financial results, CLC Chairman Priyantha Fernando said, “CLC has recorded exceptional Profit Before Tax (PBT) and Profit After Tax (PAT) over the last 10 years – and in the same vein, we expect to close the 2020/21 year with a PBT between Rs. 3.2 Bn to 3.5 Bn, which is an impressive achievement under the dismal market conditions – as indicated by these sound nine-month results. The GDP has been on the decline since the Easter Sunday attacks in 2019, further exacerbated by the COVID-19 outbreak, but despite the economic slowdown CLC has displayed resilience by putting in place pillars critical for sustained growth. During the period under review, we strengthened the risk management framework which has helped us to proceed on a more targeted path under the able leadership of the CEO and the management team. Customer engagement has been another key pillar because finance is a relationship business and CLC has yet again risen to the occasion – holding the umbrella of financial security for customers in their difficult times.”
Supporting customers in the time of need, CLC granted over 64,000 moratoriums during the year to those whose livelihoods were affected due to COVID-19. CLC is already having a notable impact at the grassroots, touching the lives of 150,000 households. CLC’s IT infrastructure and digital platforms were already primed and prepared for handling large volumes of digitalised transactions, which made it possible for the company to deliver uninterrupted services free from inconvenience to its large customer base. CLC’s robust 9-month financials reflects its trajectory for closing the financial year 2020/21 on a resounding note.
From Left: Chairman of Commercial Leasing and Finance PLC Priyantha Fernando (left), Director/CEO of Commercial Leasing and Finance PLC Krishan Thilakaratne