Abans Finance, a member of Abans Group, has registered a pre-tax profit of Rs. 197.4 million for the period ended March 31, 2017, compared to Rs. 130.5 million recorded in the corresponding year of 2016, achieving a YoY growth of 51.29%.
The post–tax profit of the company for the period under review has also improved by 48.2%, from Rs.90.1 million in 2016 to Rs. 133.6 million in 2017.
Abans Finance has also enhanced its stated capital from Rs. 382.3 Mn to Rs. 844 Mn during 2016/17 and further to Rs. 1,121.4 Mn during the current financial year of 2018. Ironwood Investment Holding (Pvt) Limited has invested in Abans Finance and currently holds 41.89% Equity of the Company with the conclusion of the Mandatory Offer closed in July 2017.
Ironwood is a private equity firm that successfully raised a Sri Lanka-focused Private Equity fund of up to USD 30 Mn. in long term (8 year) capital commitments.
The company has continued to increase its profitability ami external challenges such as increasing interest rates and slowdown in consumption. The increase in profitability was mainly due to favourable growth in net interest income.
A slight shrinking of Net Interest Margins (NIM) had an adverse impact on the Net Interest Income (NII) of the entire NBFI sector and Abans Finance was no exception to this trend. Nevertheless, NII of the company recorded a remarkable increase of Rs. 162.98 million or 23% during the period under review from Rs.708 million in 2016 to Rs. 871 million in 2017, aided by the significant expansion of the asset-base of the company since 2016, coupled with prudent liability management strategies.
Net fee and Commission income which mostly comprises of fees, commissions and other fee based income decreased to Rs.19.4 million from being Rs. 34.7 million during the year 2016, reflecting a decline of 44.2%. The company introduced a number of unique value additions to its Hero Motor cycle leasing offerings during the period under review in order to remain competitive in view of the fact that most competitors have now made moves to the two wheeler motor cycle credit market to retain margins in a period of rising interest costs.
A 22.5% growth was recorded in other operating income for the period under review as compared to the corresponding period in 2016. Other operating income earned during the 2017 amounted to Rs 20.7 million,whereas in 2016 it was Rs. 16.9 million.
Sources : dailynews