Kanrich Finance recorded Rs. 183 million in profits before tax (PBT) and Rs. 113 million after-tax profits (PAT) last year. Kanrich is also reaching Rs. 2 billion in capital and possesses a capital adequacy ratio of 29%, said Kanrich Chairman Ravi Ratnayake.
The Company continues to make profits and is also reaching Rs. 2 billion in capital and possesses a capital adequacy ratio of 29%.
Kanrich had a tough time in 2019 due to Covid restrictions and contraction of the economy but through institutional restructuring, cost reduction, increasing efficiency and productivity the Company became profitable despite the crisis and the regulatory restrictions.
He said that under the Central Bank’s Master Plan to consolidate licenced finance companies, which hopes to reduce the number of finance companies from 42 to 25, Kanrich is in the process of finalising a merger with Nation Lanka Finance.
One condition of the Plan is that the companies that cannot show a capital of Rs. 2.5 billion must merge with another company or become a non-licenced company.
“Though Kanrich fulfilled all other requirements, Kanrich is missing this threshold marginally. Therefore, Kanrich has to fill this capital gap or become a non-licensed company via this merger and then we jointly would have over Rs. 3 billion in capital.”
Kanrich which is over 50 years in business is not a failed or collapsed company and as a part of this merging process Kanrich Finance Company has already started paying their depositors.
“We have adequate funds to settle all deposits and promissory notes which we are doing now.”
“When the amalgamate is complete we become stronger, increasing our staff from around 400 to 1,000 and branches from 32 to 50.”
Kanrich depositors after receiving their payments are welcome to join the merged entity as they can benefit from the increasing deposit rates in the market, he said. - SS