Records non-operational profits at end of 1Q
After two and half years of financial turmoil, The Finance Company (TFC) PLC recorded profit at the end of its first quarter of the new financial year.
TFC, which recently celebrated its 70th anniversary, is Sri Lanka’s oldest finance company. With the collapse of the Golden Key Credit Card Company Ltd. in 2009, TFC, which was a subsidiary of the Ceylinco Group, suffered a loss of public confidence, causing tribulations in the company’s day to day activities.
With the need to steady the company’s business and to secure it from insolvency the Central Bank of Sri Lanka along with the members of the cabinet subcommittee appointed for resurrecting the finance sector oversaw the operations of the company. The year 2011 saw a new board of directors taking charge of steering this company with a new vision to build the future on a rock solid foundation.
The Chairman of the new Board of Directors Preethi Jayawardena, a Chartered Accountant by profession, Managing Director of Chemanex PLC and member of the Monetary Policy Consultative Committee of the Central Bank of Sri Lanka, stated: “We have been able to regain the confidence of the general public towards TFC, a finance company can only survive as long as its investors and customers trust in the organisation’s ability to provide secure financial services.”
The share issue which was oversubscribed and concluded in January 2011 saw important changes within the ownership structure of the company. Most importantly it was able to position some of the main players in the State banking sector, namely, People’s Bank, Bank of Ceylon and Seylan Bank as the key shareholders of the company.
With strategic relocation and revamping of branches TFC has been able to open up many new opportunities by providing customers with easy access to its services. Plans are also in place to expand business in the North and East Provinces of the island, which will enable the company to increase its coverage in the country.
Jayawardena added: “We have opened up in Anuradhapura and Polonnaruwa and currently we are on the verge of shifting to our own branch in Jaffna which is centrally located in the heart of the city.” He also went on to state that the company plans to increase its number of branches from 60 to 80 in the coming future.
TFC has also strategically begun to convert its agro branches to fully-fledged main branches that provide not only agricultural loans but also other financial services such as leasing, savings and higher purchase accounts. Due to the lack of competitors in these areas the company feels that it is an advantage being the sole financial service provider to the customers of those locales.
Commenting on the sale on the real estate, Jayawardena said that they have decided to increase the purchasing of capital assets which was at a lower rate during the past two years. “We have decided to increase the sale on real estate, by purchasing suitable property that shall provide profit on sale.”
As a result of the stability brought in by the new board of directors the pawning business which had seen a sharp rise during the last quarter ended with an impressive overall growth of 64% whereas the leasing and hire purchase product portfolio has found encouraging growth of 50% in the first quarter. The overall monthly investment of the business has reached the Rs. 1 billion mark with over Rs. 500 million coming in monthly as new deposits.
Jayawardena concluded: “TFC looks to the future with great confidence in reaching its goals. The company is determined to be a household name in time to come.”