The company’s deposits (excluding savings deposits) grew by 20% year on year (YoY) to Rs. 36.5 billion by last year end from 40,000 customers.
LB Finance on a Rs. eight billion turnover will have had seen profit after tax grow by 10% YoY to between Rs. 1.7-1.8 billion last year, he said.
Adihetty further said that despite a high interest rate regime their non performing assets amounted to only 2% of their total loan portfolio. He said that 75% of their lending is tied to leasing and hire purchase while the balance was on pawning. Typically a leasing arrangement is tied to between 4-5 years.
Lending rates are between 20-25%. The company has a 1,900 strong staff strength.
Meanwhile this finance company launched an “Avurudhu” promotional campaign for its depositors, where in a
similar campaign held last year the company got new deposits to the value of between Rs. 350-500 million from small deposits. The company at current rates pays a 15.82% annual interest on a six month deposit. LB Finance’s monthly interest payment bill is Rs. 200 million, said Adihetty.
Most of their customers hold deposits of a year’s tenure. “But we see people going for short term deposits probably due to uncertainty,’ he said.