Commercial Leasing & Finance PLC (CLC) posts historic profits in COVID-impacted FY2020/21
- Profit Before Tax up by 34% over previous year to record Rs. 2.67 Bn
- Profit After Tax soars by 43% to reach Rs. 2.2 Bn
- 60,000 moratoriums granted to support customers
- Gross Portfolio growth of 15%
- Deposit growth of 32%
- NPLs at 6.49% against industry average of over 13.87%
- Provision cover of 107% over NPLs
PHOTO FILE: –Krishan Thilakaratne, Director/CEO of Commercial Leasing & Finance PLC
In its most impressive performance yet, Commercial Leasing & Finance PLC (CLC) recorded its best-ever financial year despite the severe challenges arising from the COVID-19 global pandemic through the year, achieving a growth of 34% in Profit Before Tax over the previous year to record Rs. 2.67 Bn, while Profit After Tax rose by as much as 43% over the preceding year to reach Rs. 2.2 Bn. Meanwhile, Cost of funds decreased by as much as 23% to record Rs. 4,737 Mn in the year under review. The key factor for CLC’s success was its two-pronged strategy to navigate the unprecedented year: strengthening customer relationships and helping customers to plan their financial commitments as reflected in the 60,000 moratoriums granted by the Company, which accounts for approximately one-third of its loan portfolio in 2020/21. The Company’s support and guidance was highly appreciated by customers who responded positively by servicing their commitments thereafter in a timely manner. Deposits grew by 32% during the year under review. CLC remained mindful of the fact that that it needed to partner SMEs and micro business customers especially in times of such crises. In contrast, with the downturn in the Non-Banking Finance Industry (NBFI), CLC recorded a gross portfolio growth of 15%.
Another impressive achievement by the Company during 2020/21 is the Non-Performing Loan (NPL) ratio of 6.49% which is less than half of the industry average, thus reflecting the healthy portfolio of the company. Despite the strong portfolio, CLC has 107% provision cover over the NPL portfolio which is almost 100% asset backed. This reflects not only the Company’s financial stability but also its potential to sustain such a performance in the future as well.
Strengthening its footprint further, CLC is on a rapid expansion drive and currently offers the largest variety of products by any NBFI, namely, vehicle leasing and loans, SME finance, microfinance, Alternate Finance, Gold loans, Working Capital finance through Factoring and a variety of deposit products. The product portfolio will be enhanced in the immediate future with the inclusion of credit cards. The success of CLC will be further extended through enhancement of its channel network – with 10 more branches scheduled to be inaugurated in the next financial year.
CLC is also launching enhanced digital banking operations through the introduction of payment platforms such as iPay, increasing its online and mobile penetration and supporting customers to migrate to digital platforms. CLC will leverage on the iPay platform to partner new merchant networks whilst offering customers exciting products and benefits.
Commenting on the Company’s stellar performance, CLC Executive Director/CEO Krishan Thilakaratne said, “Delivering the highest profitability amidst one of the most disruptive years in the nation’s history is a testimonial to the people and processes at CLC. More importantly, this milestone was gained while supporting customers whose businesses were badly affected by the pandemic through which we earned the trust of our customer base. The confidence placed in CLC by the regulator is also at its highest as the Company achieved a capital base of Rs. 21 Bn, which amounts to a capital adequacy ratio of 19.44% as against the minimum regulatory ratio of 6.5%. What excites us the most is the fact that we achieved growth in profits in a sustainable manner.”
Through its outstanding performances in 2020/21, CLC has become one of the key contributors to the LOLC Group’s excellent financial performance in the year under consideration while strengthening its identity as one of the leading NBFIs in Sri Lanka.
Consistently recognized and rewarded by the industry, CLC has been ranked in the top 50 brands by the LMD Brands Annual and listed as one of the top Most Respected Companies in Sri Lanka. During the year, CLC was reaffirmed as SL (A) stable by ICRA Lanka Ltd.