Performance of the Group's core business of financial services remained strong despite the external pressures from the economy, liquidity limitations and rising interest rates. The group's conservative strategy adopted a few months back on portfolio growth backed by strong collections reflected limited growth in the lending book with strong NPL positions at each lending company. Portfolio quality remained a top priority and all companies continued its efforts to maintain NPLs at the healthy position as in the previous year.
The strong business model of the financial services sector drove LOLC's main subsidiaries Lanka ORIX Finance Plc (LOFC), Commercial Leasing and Finance Plc.(CLC) and LOLC Micro Credit Ltd.(LOMC) to record steady growth in profits. The PBT contribution from each of these companies was, LOFC - Rs. 459Mn, CLC - Rs. 458Mn and LOMC - RS. 287Mn.
The Company's PBT of Rs. 28Mn was lower compared with the last year's first quarter of Rs.1.4Bn due to Rs. 1.2Bn profits realised by LOLC in the previous year from thesale of a 10% stake of LOFC as a result of the listing. The Company also recorded marked to market losses of Rs. 155Mn during the first three months further reducing the profits. Kapila Jayawardena, Group Managing Director of LOLC said that the results demonstrates the strong growth and performance in the core business of LOLC and with the multilateral funding pipeline already in place, the Group expects to show strong performance in this financial year.