In a review of the company’s operations during the year, the management disclosed reasons for the growth in losses.
The loss of Rs. 3.8 billion recorded during the 2010/11 financial year came down to Rs. 353 million during the 2011/12 financial year mainly as a result of one-off/extraordinary transactions that took place during the year such as additional income gained from the sale of certain commercial properties and reversals of provisions for doubtful debts. The company had also made positive gains on the price appreciation in dealing in securities as result of the growth in the stock exchange.
"The interest cost of public deposits that went up in the financial year 2012/13 as a result of the increase in policy rates compared to the previous year had a major impact on the current results. The negative impact created by a share transaction of the company during the early part of the year under review also prevented the company from generating adequate funds to increase the loan disbursements to the required levels during the first half of the financial year," the company said.
The transaction in question was the controversial purchase of TFC shares by National Savings Bank which was later revoked by the President himself.
"However, this has now been rectified and the deposit intake for a month has now reached almost Rs. 1 billion a month, which has given room for the company to achieve the desired loan disbursement levels.
"Despite the challenges, the company has shown steady progress over the last quarter having recorded over a 20 percent growth in fresh deposit intake, 40 percent increase in savings deposits and 25 percent increase in financial investments and maintained a NPL ratio below 3 percent for the financial investments done after commencing operations after the Ceylinco debacle in 2009 and is positively progressing towards achieving planned objectives. A five year plan has been drawn after the strategising operations with the help of an internationally reputed consultancy firm and is now more focused in achieving the desired results within a reasonable period," the company said.