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| News in Details |
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| Merchant Bank of Sri Lanka in with another rescue mission - 2009-06-24 |
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| Summary |
| Colombo. Tuesday 26 May 2009. The Central Bank of Sri Lanka in a communiqué informed the general public that the Merchant Bank of Sri Lanka (MBSL) has been entrusted with the restructuring efforts of the oldest and the pioneer finance company in Sri Lanka - The Finance Company (TFC), a company built on heritage and trust which has evolved over 68 years, regarded as a state symbol in the finance industry. |
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Lankaputhra Development Bank has finished its part of the exercise and has done a good job in establishing stability and confidence in TFC. TFC now requires additional support to address present and future business opportunities. MBSL has a panel of professionals who have the skills and experience having undertaken similar projects in the near past.
“We are extremely pleased with the way MBSL has set about in the restructuring affairs of Finance & Guarantee Company Limited (FGCL) and the Ceylinco Savings Bank. In fact it bought about stability, restored depositor confidence and supported the government and the industry in a crisis situation. We are confident that it will do the same with The Finance Company”, said the Governor of the Central Bank of Sri Lanka Mr. Ajith Nivard Cabraal.
MBSL was appointed as the Managing Agent of FGCL on 31 March 2009 and within a short time proved beyond doubt that it was the restructuring specialist in Sri Lanka. MBSL has not only restructured successfully FGCL but also MBSL Savings Bank (formerly Ceylinco Saving Bank) and MBSL Insurance (formerly ABC Insurance). |
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Under the guidance of the Chairman of the MBSL Group, Mr. Janaka Ratnayake, the Group has been moving from strength to strength with innovation and courage. Speaking at a press briefing Mr. Ratnayake stated “Shrinking economic activity has put further pressure on balance sheets as asset values continue to degrade. The Finance Company has a large asset base, mainly property. With the property market adversely affected by falling prices, TFC has a problem. Further there are no new cash inflows as there is no fresh lending. We wish to reverse this situation and want business to be as usual at TFC”
“We are confident that TFC will begin normal business activities soon under our guidance. Our Management Committee will be at hand to guide the affairs of TFC. We at MBSL believe in good corporate governance and transparency of our operations. We have built a result-oriented culture based on trust and integrity, openness and performance. This has been the success of MBSL over the years”, he said.
Mr. Ratnayake added, “The end of the war brings new hope and prosperity. We believe that the time is right to venture into new businesses and grab the opportunities in the market. TFC has a huge potential with the opening up of the North and East for business. We wholly-heartedly support President Mahinda Rajapaske’s “Mahinda Chinthana” and believe that The Finance Company has a major role to play to the financial sector as well as to the general public of Sri Lanka”. |
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“Unfortunately, with the unfolding of the global economic and financial meltdown, and its repercussion on Sri Lanka, coupled with the scandals that took place in Sri Lanka such as the Golden Key fiasco, Sakvithi etc, the Company had a run on its deposits rendering TFC in dire straits. We are certain that under our professional guidance, TFC will reaffirm its position as the market leader and continue to serve the country and its people with indigenous products and services to all communities”, Mr. Ratnayake added.
It is believed that Sri Lanka’s oldest finance company TFC was responsible for introducing some of the most sought after customer conveniences in Savings/Fixed Deposits, Property Development & Housing, Finance, Leasing and Hire Purchasing. It was a Company where relationships have stood the test of time and grown into successful partnerships. |
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About The Finance Company :
TFC was incorporated on 30 May 1940, during colonial times and long before the birth of Ceylinco, under the leadership of the late Senator Justin Kotelawala who served as Deputy Chairman and Managing Director for two decades since its inception. Mr. Rosslyn Koch, a renowned businessman at the time, was the first Chairman of the Company.
TFC has a history of achievements and is:-
1the seventh public company to be registered with the Registrar of Companies
2the countrys first finance company, and has over 6 decades of unmatched experience in the finance industry
3is the non-banking financial institution with the largest fixed deposit base of more than Rs. 26.8 billion and the largest customer base spanning 3 generations
4market leader in Property Development and Housing
5a recognised household name in Sri Lanka
TFC has over 100,000 customers in many areas of operations. It has more than 1600 employees and over 24 branches island-wide. A company that has served several generations, our fathers and forefathers, it will continue to serve generations to come.. |
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| About Merchant Bank of Sri Lanka
MBSL, the pioneer merchant bank in Sri Lanka is registered under the country’s Securities and Exchange Commission (“SEC”) Act No. 36 of 1987 - as an investment manager, margin provider and underwriter. Apart from the SEC, the Bank is also regulated by the Central Bank of Sri Lanka. MBSL is also a growing holding company comprised of subsidiaries within the financial and insurance industry segments.
MBSL’s major shareholder, The Bank of Ceylon, is the largest bank in Sri Lanka and is 100% owned by the Government of Sri Lanka. Over 303 branches in Sri Lanka as well as 03 overseas branches, make Bank of Ceylon the most visible bank overseas.
As part of its merchant banking activities MBSL also offers corporate advisory and capital market services. 2008 was historical for MBSL when it passed Rs. 1 Billion mark in turnover from Rs. 873 million the previous year. This feat was achieved under economic downturn and financial crisis.
Yet another achievement in 2008 was when the MBSL was ranked third in the Lanka Monthly Digest’s (LMD) productivity profile which measured productivity on the basis of profit per employee. |
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| MBSL also retained its AA- long term rating and L1 short term rating with a stable outlook during 2008 issued by the leading international rating firm RAM Ratings Lanka (Pvt.) Ltd. Asset quality of the portfolios was maintained despite adverse market conditions through improved credit evaluation processes and expansion on a selective basis.
Yet another achievement in a form of celebration took place in 2008 when Merchant Credit of Sri Lanka, a registered finance company regulated by the Central Bank of Sri Lanka, a subsidiary of MBSL, celebrated 25 years of dedicated service to the nation.
Founded in 1983, Merchant Credit was acquired by the Bank of Ceylon and its subsidiary Merchant Bank of Sri Lanka in 1991 and commenced operations under a new management team in 1992. 89.3% of share is owned by Bank of Ceylon, 49% directly and 40.3% through its 79%-owned subsidiary Merchant Bank of Sri Lanka.
Two new additions to the Merchant Bank Group are MBSL Insurance Company (a wholly owned subsidiary of MBSL – the only State Owned Insurance Company) and the MBSL Savings Bank, where MBSL owns a majority stake.
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