LOLC PLC, originally a leasing firm which has expanded into financial services during the past few years, is keen to explore opportunities in areas such as in the power sector, its Managing Director and CEO, Kapila Jayawardena said.
“We are quite interested to look at opportunities outside the financial sector if the returns are adequate. These are in projects such as power plants, renewable energy, etc.,” he told the Business Times, adding that these are some of the sectors that will grow in the post-war era. He said with the opening up of the North and the East (N and E) there are many opportunities. “We are optimistic about the businesses and infrastructure development such as power plants, urban development, tourism and the construction sectors which are stated to grow in this new economy after the war,” he said.
He added that LOLC’s small and Medium Enterprises (SME) and micro businesses will get a boost from the N and E revival. “We started branches in Ampara, Batticaloa and Jaffna and will open branches in Vavuniya, Trincomalee and Mannar shortly,” he said, adding that the LOLC Micro Credit Ltd. is the only Central Bank (CB) approved operation in such a business.
Mr. Jayawardena said that LOLC has almost tripled its branch network within two years to 64 across the country. “The tie-up in early 2009 with the postal network has helped the company tremendously to penetrate into the rural economy,” he noted. LOLC is also the largest financier of agricultural equipment in the country and this portfolio exceeds about Rs. 10 billon in the LOLC Group, which is roughly about 18% of its total assets.
Mr. Jayawardena said that LOLC, in addition to organic growth will pursue acquisitions in the financial sector to supplement its growth strategy, but declined to give specifics. “LOLC, after its recent 10% acquisition in Seylan and 50% acquisition in Diriya Investments, the holding company of Browns PLC, will continue to explore opportunities in the financial sector.”
He said that despite a fairly material reduction in lending rates, LOLC has been able to retain its margins due to its low cost funding base from multi lateral agencies. The LOLC balance sheet grew strongly and its asset base rose by 20% year on year to Rs. 57 billion in the group’s 9-month (ended 31 December) results performance. Profit before tax grew to Rs. 1.2 billion compared to Rs. 900 million in the same period last year, which is a 35% growth. Mr. Jayawardena said that LOLC is now one of the largest tax paying corporates and for the nine month period, the tax payment was Rs. 414 million. |
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