CDB ends 2019/20 on triumphant note despite unforeseen challenges
Closes year with Group PAT of Rs 1.8 Bn
2020/21 Q1 total assets notch Rs 96.7 Bn
Conquering extensive economic destabilization dynamics stemming from the Easter Sunday attacks and COVID-19, Citizens Development Business Finance PLC (CDB) concluded the financial year 2019/20 on a triumphant note with a healthy profit after tax of Rs 1.8 Bn, showing a growth trajectory of 1.6% year-on-year.
The Company’s trademark resilience was demonstrated when it weathered the impact of COVID-19 lockdowns in Q1 of FY 2020/21 showcasing a balance sheet of Rs 96.7 Bn as at June 30th 2020 and recorded a profit after tax of Rs 487.9 Mn, a significant growth of 63% compared to the corresponding quarter in the previous year. These results are as per the group audited financial statements for Financial Year ended 31st March 2020 and the interim results for the 1st quarter ended 30th June 2020 released to the Colombo Stock Exchange (CSE) recently.
CDB’s Managing Director/CEO Mahesh Nanayakkara is well pleased with the Company’s progress during this challenging period, stating, “With our digital and e-commerce focused business strategy, coupled with the integration of sustainability into our business, CDB confidently looks forward to a sustained strong performance in the post-COVID-19 era.”
Despite widespread disruptions in consumer behavior and economic activities, CDB achieved a revenue of Rs 17.4 Bn in the financial year 2019/20, which is a growth of 3% year-on-year. Net interest income increased by 21% to Rs 6.6 Bn, while the Group maintained its profit before tax at Rs 2.3 Bn. CDB’s consolidated balance sheet as at year-end stood at Rs 93.2 Bn with Rs 11.6 Bn in net assets. The cost to income ratio continued to improve to 48.79%, whilst the return on assets stood at 1.98% and return on equity came to 17.99%. The earnings per share stood at Rs 26.15 and net assets value per share was Rs 164.76.
In spite of the economic uncertainties which prevailed for much of the year, it is noteworthy that CDB concluded a rights issue with great success. The fully subscribed issue raised fresh capital of Rs 1,019 Mn, strengthening CDB’s balance sheet and demonstrating the high level of investor confidence in the company. CDB’s strong balance sheet comprises 90% in regular cash flow and income generating assets, including the Company’s asset backed loan book, whilst the interest bearing funding composition encompasses a healthy mix of deposits to debt at 57% to 43%, with balanced assets and liabilities maturity status.
CDB’s robust performance was sustained into the first quarter of the new financial year 2020/21. At the end of Q1, CDB’s balance sheet reached Rs 96.7 Bn. Profit after tax increased significantly by 63% reaching Rs 487.9 Mn. CDB’s Tier I and Tier II capital ratios stood strong at 10.14% and 12.87% respectively, well above the regulatory threshold. The liquidity ratio at 18.49% is also well above the regulatory minimum of 6%. Meanwhile, the gross Non-Performing Loan (NPL) ratio, including revolving yard stocks increased marginally to 7.93%. On a net basis, excluding the revolving yard stock, the NPL came to 2.68%. This is in comparison with 31st March 2020 figures of 7.57% and 2.55% respectively.
In another significant development, the current quarter saw CDB completing the amalgamation of its specialized leasing subsidiary Unisons Capital Leasing Ltd (UCL), under the financial sector consolidation programme of the Central Bank.
CDB’s winning streak continued during the year with numerous accolades. CDB was ranked among the Business Today Top 30 for the first time in its 24-year history, was recognized among the 10 Best Corporate Citizens in Sri Lanka at the Best Corporates Citizens Sustainability Awards and won gold in the NBF sector at the National Business Excellence Awards. Strong, stable and visionary, CDB moves ahead in the post-COVID-19 era with a team fuelled by motivation, determination and passion to conquer.