First Capital holds strong despite economic challenges

First Capital Holdings PLC (the Group), a member of the Janashakthi Group, reported a Profit after Tax of LKR 235Mn for the quarter ended 31st December 2021.

The Group’s Corporate Finance, Wealth Management and Stock Brokering businesses were the key drivers of these results during what was a particularly challenging period for the market at large. The profits include a reversal of over provision of income tax amounting to Rs. 149Mn.

First Capital’s Corporate Finance division reported a Profit after Tax of Rs. 47Mn for the nine months ended 31st December 2021. This includes fee income on structuring and placement of corporate debt securities of Rs. 36Mn and trading gains of Rs. 84Mn on sale of corporate debt and equity securities.

The Group’s Wealth Management division reported a Profit after Tax of Rs. 77Mn for the same period. The business unit had assets of Rs. 44.9Bn under its management as of 31st December 2021.

The Stock Brokering division recorded a Profit after Tax of Rs. 176Mn for this nine-month period.

The Primary Dealer division recorded net interest income of Rs. 357Mn for the same period. However, a trading loss of Rs. 809Mn on sale of government securities incurred by the business unit drove it to conclude this period with a Loss after Tax of Rs. 361Mn.

Trading and marked to mark losses on the government securities portfolio incurred by the Group’s Primary Dealer division had an adverse impact on the overall bottom line. This was primarily caused by the upward shift in the yield curve due to the unanticipated tightening of monetary policy in mid-August 2021. The Group concluded the nine months ended 31st December 2021 with a turnover of LKR 1.43Bn and a Loss after Tax of Rs. 69Mn.

The quarter also saw First Capital Treasuries PLC, a subsidiary of the Group and one of Sri Lanka’s leading non-bank primary dealers, being listed on the Diri Savi Board of Colombo Stock Exchange. The listing, which was managed by the Corporate Finance division of First Capital Limited, was aimed at enabling the company to broaden its ownership base, bring in more liquidity, and strengthen its brand identity.

The FCT IPO gained significant interest from investors and was oversubscribed by 4.5 times within hours on its opening day. The company’s shares began trading on the Colombo Stock Exchange (CSE) on 23rd December 2021.