Financial Times

MBSL posts second highest profit
By Duruthu Edirimuni
Merchant Bank of Sri Lanka (MBSL), the main leasing subsidiary of Bank of Ceylon, posted its second highest profit of Rs. 124 million after ten years for 2004, through stepping up its fund based and fee based consultancy activities.

It posted the highest ever profit of Rs. 175 million in 1994.
CEO Sunil Wijesinha said the company's growing leasing portfolio and disbursements, which have increased over the past three years have added to its profits together with the two public debentures issued early this year and late last year. "We have performed surgery on the company and have a very tight control of costs," Wijesinha further said, adding the company has reduced overheads drastically, making the organisation leaner.

Leasing, their cash cow, contributed to MBSL's bottom line with 70 percent.
"We have achieved over a one billion rupees in disbursement through leasing and hire purchase," Subitha Perera, Assistant Director, Finance and Treasury Management said.

Perera said MBSL has reduced its non performing loans drastically and as a result reduced the accumulative bad debt provisioning against the loan portfolio.

" It has dropped from 25 percent in 2003, to 14 percent this year," Perera added. MBSL's leasing customer base increased up to 16,000 this year, from 14,500 in 2003.

"We also improved our IT capabilities such as infrastructure support with enhanced security systems and faster processing packages," Jayantha Perera, Head of Capital Markets said. He said the company also added ' functions specific software' such as debenture and IPO management software, to offer speedier and accurate processing.

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