Alliance Finance Company PLC, one of the oldest listed finance companies in the country, has posted what its Chairperson called its "best ever result" with a "phenomenal" 137% growth in after-tax profit to Rs.466 million for the year ended March 31, 2012.
"A very focused and dedicated effort by our entire team of employees and an economic environment that was most conducive to business, were key factors of this performance," Ms. Sonali de Silva, the company’s new chairman has told shareholders.
"Your company’s lending rose by a significant 75% whilst net assets grew by 37% and net interest income increased by 88% during the year."
She said that Alliance continued to expand its distribution channels and five new branches and eight Gold Loan centers were opened during the year.
The company capitalized its reserves and issued one bonus share for every two held giving shareholders 810,000 new shares on which a final dividend of Rs.20 per share on top of an interim dividend of Rs.25 was paid in February.
Alliance Finance has sent its depositors the chairperson’s and managing director’s review published in the company’s last annual report.
De Silva expressed the view that new regulatory measures introduced the previous year through the Finance Business Act No.42 of 2011 was a positive step in the interest of greater transparency and striking the balance between expansion and control. The investing public and the industry as a whole would be the ultimate beneficiaries of these measures, she said.
Alliance Finance Chairman, Pratapkumar de Silva who had served for 37 years as the chairman of the company had resigned in December 2011 in accordance with the new corporate governance regulations limiting the directorship of those over 70 years old. His successor, on behalf of the board, Managing Director and all employees of the company expressed sincere gratitude for his leadership that had enabled the company to rise to the position of commanding excellence that it enjoys today in the world of finance.
Another senior director, Mr. J.F.R. de Saram who had joined the company in 1958 and served it with dedication and commitment for over 50 years, half of them as an executive director, had also resigned at the end of last year.
So had Messrs. R.M. Canekeratne and Bri Ponnambalam who had served the company as non-executive director since 1991 and 1994 respectively. The chairperson conveyed heartfelt appreciation for their valuable contributions through the years and wished them well.
She said that Alliance Finance has carved a unique position for itself in the country’s finance industry with a record of consistent performance built on trust. A balanced corporate portfolio, steady growth and a host of other intangibles had enabled them to establish this position. She said that they will continue to focus on strategies that had served them well in the past and still remained suitable despite changes in the industry environment.
"The changing dynamics in the current economic environment of 2012 has necessitated that we review our strategies and our product portfolio structure for the year ahead. Expansion will hence be at a slower pace whilst management of risk and costs are likely to receive a greater focus by the management," she said.
She concluded by thanking the Managing Director, Mr. Romani de Silva, whose foresight, dynamism and meticulous planning had been key to the performance of the company and also thanked her board colleagues and management staff for their dedication and commitment.
Deputy Chairman/MD Romani de Silva said that the year had seen the company’s asset base grow 49% while deposits surged 35% to reach Rs.6.7 billion during the year under review. They had also optimized their net interest margin to 9.8% from 7.4% the previous year – significant in the context of the high growth of lending of 75% during the year.
Their non-performing loans ratio was down to 2.45% from 4.24% the previous year thanks to strengthening of recoveries and most stringent evaluation of credit worthiness alongside an improved business environment of high growth and low interest rates.
Three new board members, Mrs. R.N. Ponnambalam, Messrs. A.R. Samarasinghe and S. Karunanayake have been appointed to the Alliance Finance board.
De Silva said that supporting the SME sector through macro finance solutions will continue to be the key element of the company’s future strategy. They expected their portfolio in the agricultural sector to expand and saw tremendous potential in the growth of markets in the North and the East.