First Capital’s 1H profit sinks as market conditions shift

Chairman Rajendra Theagarajah	MD/CEO Dilshan Wirasekara

First Capital Holdings PLC reported a sharp decline in profitability for the first half of the 2024/25 financial year, with the total comprehensive income dropping to Rs.904 million, from Rs.9.58 billion a year earlier. 

The fall was attributed to the absence of an extraordinary gain recorded in the prior year, which benefited from a steep decline in interest rates, following the domestic debt optimisation.

The group’s net income before the operating expenses for the first half of 2024/25 was Rs.1.90 billion, compared to Rs.16.61 billion reported in the corresponding period of the previous year. 

The lower contribution via the business activities of the group stemmed from the primary dealer division mainly, as the corresponding period of the previous year saw substantial easing of the monetary policy rates and resultant conducive secondary market trading that was not seen in the current year, First Capital PLC said in a statement.
The primary dealer division recorded a profit after tax (PAT) of Rs.578 million for the six months ended September 30, 2024, compared to Rs.9.21 billion in the previous year. This period’s results included a trading gain on the sale of the government securities portfolio, amounting to Rs.1.24 billion and the net interest income of Rs.834 million, compared to a trading gain of Rs.13.6 billion and a net interest income of Rs.2 billion reported in the similar corresponding period of the previous year. 

The corporate finance advisory and dealing securities division achieved a PAT of Rs.264 million for the six months ended September 30, 2024, a slight decrease from Rs.337 million compared to the corresponding period of the previous year.

The wealth management division reported a PAT of Rs.49 million for the first half of 2024/25, an increase from Rs.18 million in the corresponding period of the previous year. 

As of September 30, 2024, the assets under management of the division totalled Rs.95.7 billion, up from Rs.94 billion, as of March 31, 2024.

The stockbroking division recorded a PAT of Rs.6 million for the six months ended September 30, 2024, a decline from Rs.31 million compared to the corresponding period of last year.