MBSL marks strong turnaround in 2021 posting Rs 812 mn PBT
The Merchant Bank of Sri Lanka and Finance PLC (MBSL) has made a strong turnaround in 2021 posting Rs 812 million as profit before tax (PBT) for 2021.
Compared to a loss of Rs 1.3 billion in 2020, not only are the 2021 results the largest annual profit reported by MBSL over the last 10 years, but also reflects strong management action during one of the worst 12-month periods in recent economic history dominated by a debilitating pandemic.
Apart from this remarkable turnaround, MBSL passed a notable milestone in 2O2l by concluding a successful rights issue raising a sum of Rs 2.1 billion that was added to the capital base thereby conclusively addressing issues relating to their capital adequacy ratio.
MBSL Chairman Kanchana Ratwatte referring to the 2021 PBT said “The current turnaround once again exhibits our resilience in the face of a tough environment. MBSL’s long term view and strategic focus on the overall business has yielded good results and we remain optimistic for this year.”.
The turnaround in PBT for the year 2O21 resulted not only from sound action taken by the Government to provide appropriate funding via CBSL loan schemes to those affected by the pandemic but also by MBSL acting proactively to manage stress within their customer portfolio.
Thus, the lending portfolio increased by 5.2% to Rs 28 billion while the deposit base also showed an increase in growth of 2.5% to Rs 22 billion.
The income statement displays a resounding improvement. Gross Total income from all revenue sources was up 15% to nearly Rs 6 billion in 2021. Net interest income doubled in the period to Rs 2.8 billion, indicating competitive pricing as well as improving volumes, fees, commissions and other operating income increased by 173% to Rs 385 million.
Impairment charges, reflecting an improving loan portfolio, recorded a significantly low charge, down from a high of Rs 553 million in 2020 to only Rs 74 million, a reduction of 87% in 2021.
Taking all of these aspects together resulted in the strong turnaround in PBT moving from a loss of Rs 1.3 billion in 2O2O to a profit of 812 million in 2021.