Mercantile Investments robust performance in 2018/19
View(s):Mercantile Investments and Finance PLC (MI), despite a challenging business environment for the finance sector, has yet again reported a robust financial performance for the FY 2018/19.
The company’s Net Profit Before Tax (NPBT) and Net Profit After Tax (NPAT) was Rs. 787 million and Rs. 458 million, respectively.
“However, the adoption of the SLFRS 9 new accounting standard and the observed slowing down of collections due to external economic factors had a direct impact on the non-performing loans and the company’s impairment charges which increased year on year and resulted in a 8 per cent and 11 per cent reductions in the NPBT and NPAT, respectively,” the company, which marks 55 years in business, said in a media release.
MI’s Annual Report reflects upon this year’s performance and the successful journey undertaken thus far, and MI’s corporate strategy in facing future sector challenges. Managing Director Gerard Ondaatjie, in his review said: “In this challenging backdrop, Mercantile Investments was receptive to market changes and took a proactive approach, taking steps to curtail emerging risks, whilst making necessary strategic maneuvers towards longer term organisational goals and aspirations.”
The company was able to maintain a strong capital position which is reflected from the prudential capital adequacy ratios published. The Tier 1 Core Capital Risk Ratio and the Total Risk Weighted Capital ratio stood strong at 14.98 per cent and 16.69 per cent, well above the enhanced BASEL II requirements of 6 per cent and 10 per cent, respectively.
The company opened three new branches in Puttalam, Ja-ela and Malabe in 2019 but will continue to pursue its consolidation strategy of optimizing the existing branches of 39 locations to maximize business opportunities. “MI is geared with a comprehensive strategic plan for the next three years to drive its business towards a sustainable growth trajectory and in this pursuit, was also able to take appropriate measures since 2018 to enhance employee capabilities, to stay competitive and face challenges posed by the industry and the economy,” it said.
Mercantile Investments and Finance PLC is a Licensed Finance Company under the Finance Business Act No. 42 of 2011, listed on the Diri Savi Board of the Colombo Stock Exchange.