Commercial Leasing & Finance PLC posts historic profits in FY2020/21

Says key factor for this was the two-pronged strategy adopted to navigate the unprecedented year

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

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.

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.”