Largest NBFI LOLC Finance poised to fuel economic resurgence

In one of the most historic mergers in Sri Lanka, LOLC Finance PLC, the largest NBFI in the country, merged with its sister company Commercial Leasing & Finance PLC (CLC), to become the largest non-banking financial institution (NBFI) in Sri Lanka earlier this year. 

The market capitalisation of the merged LOLC Finance PLC stands at over Rs.180 billion, placing it among the top three companies on the Colombo Stock Exchange by market capitalisation. This strategic amalgamation yet again reflects the far-thinking vision of the LOLC group, one of the most profitable globally diversified entities in Sri Lanka and the first off the starting blocks in taking strategic initiatives, which gives it a strong growth momentum. 

Propelled ahead with its powerful synergies, the combined entity delivered a pro forma profit before tax (PBT) of Rs.25.6 billion and profit after tax (PAT) of Rs.23.5 billion as at March 31, 2022, which places LOLC Finance PLC among the highest value creating institutions in the country. 

An idea of the company’s powerful financial standing is evidenced by the fact that while total assets of the NBFI sector stood at Rs.1,488 billion by end-2021, representing 21 percent of Sri Lanka’s financial system, LOLC Finance’s assets stand at Rs.311.6 billion, clearly dominating the NBFI sector with healthy performance risk management indicators across every key parameter including capital, capital adequacy, business performance and thereby maintaining utmost investor confidence. It is further noteworthy that the company maintains a very high standard of integrity, transparency and customer protection principles. 

LOLC Finance promises a secure NBFI with a mammoth balance sheet size of Rs.311.60 billion with total advances of Rs.206.83 billion, which makes it resilient to economic shocks, thereby encouraging more businesses to avail of loans, due to its well-capitalised nature and its asset-backed products. 

The birth of new entity, LOLC Finance, has many beneficial implications for stakeholders in general, as it will give rise to massive efficiencies due to the combined expertise, branch network and technology platforms including iPay, LOLC Finance’s digital payment platform, which is winning accolades and fast becoming the number one preferred payment platform and lifestyle fintech product. In addition, as the most technologically advanced NBFI, LOLC Finance offers credit cards, online and mobile banking services and the entire spectrum of lending and deposits, earning a reputation for being the largest MSME financier and provider of Islamic finance and the leading factoring and agricultural equipment financier in the industry.

LOLC Finance now commands a network of 210 branches, a burgeoning customer base of over 600,000, total lending portfolio of over Rs.200 billion and an impressive deposit base of over Rs.150 billion, which accounts for nearly 20 percent of the entire industry. This amply reflects the trust and confidence placed by depositors in the financial stability and professional management of LOLC Finance.

The prudent financial discipline demonstrated by the company is evident in the fact that LOFC successfully maintained its non-performing loan (NPL) ratio at 6.69 percent as at March 31, 2022, which is less than half of the industry average, thus reflecting the healthy portfolio of the company. The merger also implies that the combined technical expertise and goodwill in the industry of LOLC Finance is multiplied many times over.