Mercantile Investments posts Rs 514m PAT | Sunday Observer

Mercantile Investments posts Rs 514m PAT

Gerard Ondaatjie
Gerard Ondaatjie

Mercantile Investments and Finance PLC (MI) displayed a strong financial performance posting impressive profits for the financial year ended March 31, 2018.

Based on the recently published Annual Report of the Company, Pre-tax profits and Post-tax profits stood at Rs. 879 million and Rs. 514 million respectively, reflecting 180.2% and 154.4% growth rates compared to the last year’s moderate performance. Amidst the industry slowdown, MI sustained steady core business revenue growth of 24%, enjoying improved core margins on the diverse lending product mix offered whilst efficiently managing the funding cost. In keeping to the corporate sustainable growth strategy, total assets advanced to the Rs. 40 billion mark, up by 7.6%. The vibrant credit products offered to the market enabled the Company to grow the loan book by 11.5% and to supersede the challenging business conditions and the constraints witnessed in the vehicle sales industry.

The growth was driven by both the term based lending and the traditional lease financing which recorded 28% and 8% growths respectively for the financial year. With a 51% portfolio increase, microfinance lending played a key role in boosting yields and was a catalyst in self-empowering women to play a wider role in the economy.

Stemming from the previous year, few large accounts though adequate collateral backed continued to impact the asset quality, with the Non-Performing Lending Ratio (NPL) moving up to 7.58%. However, through close recovery monitoring, debt restructuring and recovery actions, impairment charges was curtailed and brought down by 32% compared to previous period.Growing capital strength and the personalized service extended, paved the way for the company to broad-base the depositor base, which resulted in the total deposit base growing steady by 18% and reaching the Rs. 20 billion milestone for the first time.

Having expanded the shareholder capital base to Rs. 8.7 billion by the close of the financial year, the Company maintained a solid 43.26% Capital Funds to Total Deposits Liability Ratio.

MI’s financial strength was further fortified by the strong Tier 1 and Total Risk Weighted Capital Adequacy prudential ratios which stood significantly above the minimum regulatory limits and the industry average, at 16.24% and 17.36% respectively.

This continued to be a hallmark in MI’s financial success story that spans over fifty years, driven by the unwavering commitment to business excellence and the sustainable growth focus. 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.

Comments