People’s Leasing Group completed one of its most arduous financial years in its history with profit before and after tax of Rs. 5.70 billion and Rs. 3.59 billion respectively.
The Company on a standalone basis recorded a profit after tax of Rs. 2.94 billion for the financial year 2019/20 in the midst of several uncertainties and challenges posed by the external environment. The top line net interest income grew by 3.18% to Rs. 15.67 billion from the preceding financial year.
The financial year 2019/20 was a difficult one that began with the country’s economy being directly affected by the Easter Sunday attacks. New business opportunities were curtailed, while recovery of facilities became more challenging in the immediate aftermath of attacks due to the overall slowdown in the economy.
However, with its solid foundation People’s Leasing was able to withstand these external vulnerabilities and saw its profitability picking up in the middle of the financial year.
Collection difficulties surfaced with the emergence of Covid -19 pandemic in mid-March 2020 and restricted the Company’s profit to Rs. 2.94 billion compared to Rs. 4.42 billion achieved in the financial year 2018/19 due to a significant increase in impairment charges.
Despite these challenges, the asset base of People’s Leasing remained strong at Rs. 171.66 billion as at 31st March 2020 including the industry’s largest loans and receivables portfolio of Rs. 147.75 billion.
Within a short time span of eight years since the Company started accepting public deposits, People’s Leasing today owns the largest deposit base in the industry of Rs. 106.70 billion thanks to the trust placed by Sri Lankans in the company despite the negative sentiment surrounding the finance sector.
People’s Leasing always maintained healthy capital ratios reflecting strong credit ratings, to support its business and to maximize shareholder value.
As of March 31, 2020 Tier 1 and Total capital ratios of the Company remained well ahead of the regulatory requirements at 15.12% and 15.99%.
People’s Leasing Chairman Sujeewa Rajapakse said, “Unprecedented challenges in the year have slowed down our profitability yet through it all, significant growth in our deposit base to have the largest in the industry along with largest loans and receivables portfolio are a reflection of the trust and confidence of our valued customers in our company.”
PLC, with more than 75% of its exposure to the SME sector, was vulnerable to the slowdown in the economy that began with the Easter Sunday attacks and reached a nadir with the Covid pandemic at the tail end of the financial year.