CDB March quarter net up 22% over lower provisions

Citizens Development Business Finance PLC, a licensed finance company commonly known as CDB, for the March quarter (4Q17) reported earnings of Rs.394.4 million or Rs.7.26 a share, which translated to an increase of 22 percent year-on-year (YoY), the interim financial accounts showed. 
But the company’s core-financing business and fee incomes were seen adversely impacted by the rising interest rates and also perhaps by the slowdown in leasing and other loans. 
CDB group, which comprises of 90.38 percent-owned specialised leasing firm, Unisons Capital Leasing Limited, reported a 6 percent YoY decline in its net interest income to Rs.779.7 million, while the net fee and commission incomes also fell by 4 percent YoY to Rs.841.3 million.
The performance was however assisted by higher other operating incomes, a sharp decline in provisions made for possible bad loans, a decline in expenses and lower financial value-added tax and nation building tax payments, YoY. 
Meanwhile, for the financial year ended March 31, 2017, the CDB group with an asset base of Rs.54.2 billion, reported earning Rs.1.02 billion or Rs.18.83 a share, virtually unchanged from the previous year. 
The loans and advances to customers grew by 4.8 billion during the full financial year while the customer deposits grew by Rs.1.8 billion, with the balance being funded through borrowings, which included a debenture. 
“Growth in lending was supported by growth in the share of non-auto lending, which represented 7 percent of total lending compared to 5 percent last year. 
During the period under review, the gross NPL ratio further improved to 3.08 percent, compared to last year’s 3.62 percent,” the company said in a statement. 
The provisions made against the possible bad loans came down by as much as 43 percent YoY to Rs.232.2 million.  
The other operating incomes, which mostly comprise of trading gains of the group’s financial investments, rose by 24 percent YoY to Rs.784.6 million. 
Meanwhile, both the Tier I and II capital adequacy ratios stood at 12.32 percent and 14.12 percent, respectively, compared to the regulatory minimum of 5 percent and 10 percent, the statement by the company stated.  
By March 31, 2017, Ceylinco Life Insurance Limited held a 33.54 percent stake being the largest shareholder of the company.