MI Finance bullish on expansion, locally and regionally
View(s):By Duruthu Edirimuni Chandrasekera
Regional expansion plans are on the horizon for Mercantile Investments and Finance PLC (MI Finance), which has showcased Rs. 504 million net profit after tax, which is a 35 per cent year-on-year increase in its half-yearly performance.
While these plans are still at a nascent stage, expansion outside the country is definitely on the cards in the next five to 10 years, officials said, responding to a question by The Sunday Times Business at a media event hosted by the company recently. They said that the company is quite optimistic about the current market and is geared to cater to all the segments while being bullish on opening branches and expanding island-wide. Laksanda Gunawardena, CEO of MI Finance, stated that the company has opened 43 branches over the past 18 months. “By the end of this financial year, we hope to bring our branch network to 91,” he said. The plan is to move out of Colombo to more rural areas, he added.
He said that the opening up of the vehicle market has boosted the company’s financial position. “The loan book growth and the growth in the asset base of the company have helped its financials,” he added.
MI Finance reported a 34 per cent rise in profit before tax to 837 million. Its lending portfolio increased from Rs. 37 billion to Rs. 75 billion, with loans comprising 35 per cent of this portfolio. Gold pawning was at 16 per cent of the loan portfolio at Rs. 12 billion as of 31st March.
In an industry average of 8 per cent non-performing loan ratio, the company is maintaining a 2.8 per cent net average. Net interest income rose 24 per cent to Rs 3.4 billion, propelled by a 27 per cent increase in core book revenue and strategic repricing that lowered funding costs.
The profitability surge was achieved alongside robust 40 per cent annualised growth in deposits, mobilised through the company’s expanded network of 85 branches, Mr. Gunawardana added.
He also noted that MI Finance is extremely positive about the Secure Transaction Registry recently launched by the Credit Information Bureau (CRIB). The company is in discussion with CRIB to onboard this platform, he added.
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