The decline in profits mainly arose as a result of the persistent rise in interest rates that contracted margins derived from core business thus bringing down net interest income by Rs 194 Million. The other main cause for the reduction in profits was due to the slow-down in growth experienced in Non fund based Income unlike in the previous year. The continued sluggishness in the stock market affected the share trading profits due to which the company had to provide Rs 137 Million as a fall in value provision to mark to market its dealing share portfolio.
MI’s total revenue for the F/Y 2012 stood at Rs 2,365 Million, reflecting a moderate rise of Rs 151 Million or 7 % over 2011.To boost revenue from core business, the company put forth significant efforts in increasing contribution outside the Colombo region. To support this cause, MI’s branch network was strengthened considerably by opening additional eight branches in this financial year alone, thereby extending the total branches to fourteen. These efforts, together with improved volumes derived from Colombo region boosted by the positive conditions that existed in the economy drove core business revenue upward to Rs 1,631 Million up by Rs 133 Million or 9 % from a year before.
Improvement in the general business environment and greater economic activity seen this year, assisted the company in boosting its core business volumes in a significant manner, thus strengthening MI’s position in the finance company sector as a leading player. In this period, MI’s lending business soared to a new high reflecting an impressive growth rate of 64%, the highest in recent times. In boosting the lending base, greater focus was placed in broad basing MI’s product range including the promotion of personal loans, business loans and pledge loan services more strongly.