Mercantile Investments and Finance PLC’s records profound business growth
MI recently published annual report and financial results showed the company’s continued business solidity in terms of recording commendable core business growth, whilst posting robust profitability levels for the concluded financial year 2015/16.
MI’s Pre-tax profit and Post- tax profits stood robustly at Rs 803 Million and Rs 505 Million respectively, though dropping by 12% and 20% respectively from last financial year. The rising interest rates and the resultant re pricing effect continued to impact the LFC sector including MI, in terms of increasing funding cost and exerting pressure on core margins enjoyed. MI to a great degree was able to maintain acceptable core margins by optimizing its attractive diverse lending product mix, moreover focusing its strategy on building its core business of lending.
Despite the vehicle sales market witnessing somewhat challenging conditions mainly due to the high import duty structure, MI’s lease finance business picked up creditably by 83% year-onyear. The expansion of MI’s branch network by further five locations, bringing total tally to thirty one, supported the company’s efforts in generating higher lending volumes particularly to boost its term based lending products such as personal and corporate lending and also its budding micro finance operation. As a result of this, MI’s lending book grew handsomely by 29% with its total lending portfolio exceeding Rs 25 Billion by the end of March 2016.
In the midst of a 20% total assets expansion, importantly the company managed to safeguard its asset quality, reflective from the decline in MI’s non-performing lending ratio which stood at 3.39% compared to 4.19% recorded previous financial year end. Deposit mobilisation too remained steady with the deposit base growing by 15% year-on-year despite the stiff competition among the financial services sector in mobilising savings ofpeople.
Having being in Finance business for over fifty years, MI’s financial strength and stability remained solid, reflective from its strong capital base which exceeded Rs 7.5 Billion. Accordingly, MI’s Core capital adequacy ratio and total risk Weighted capital adequacy ratio stood well above the prudential requirements of 5% and 10% at 19.35% and 15.75% respectively.
Mercantile Investments and Finance PLC is a Licensed Finance Company under the Finance Business ActNo. 42 of2011, listed on the Diri Savi Board of the Colombo Stock Exchange.