LOLC’s main financial services entities comprising of the flagship finance company, Lanka ORIX Finance PLC (LOFC), Commercial Leasing and Finance PLC (CLC) and LOLC Micro Credit Ltd. (LOMC), led the financial services sector to PBT growth of 73%, an increase from Rs. 4.1 b last year to Rs. 7.1 b in the current year. The trading sector too contributed Rs. 577Mn in PBT, recording moderate growth over last year.
The financial services sector increased its interest income by 15% from higher revenues from top line growth, following aggressive growth in the lending portfolio. This growth is commendable given the declining interest rates in the market.
The overall lending book expended by Rs. 48 b taking the lending portfolio to Rs. 140 b from Rs. 91 b in 2013/14. The Group was geared for higher growth with growth in the lending book amidst reducing interest rates commensurate with even lower borrowing from both foreign funding partners and local banks further reducing borrowing costs, a 17% drop in absolute terms compared with last year. This drop is despite the overall growth in the borrowing book by Rs. 47 b.
LOFC recorded Rs. 2.2 b as PBT for the current year, a 54% growth compared with Rs. 11.4 b recorded in 2013/14. CLC grew its PBT signature by 34% ending the year with Rs. 1.7 b PBT compared with Rs.1.3 b recorded in the previous year. LOLC’s micro lending arm LOMC too saw an excellent year with PBT reaching Rs. 1.6 b, a 53% growth compared with last year.