Jan 10, 2011 (LBO) – The Finance Company, is looking to raise 1.6 billion rupees of fresh capital is expecting to return to profits by March 2012 helped by lower interest rates and an improving land market, a senior official said.
“Interest rates in Sri Lanka dropped and almost came to a single digit and we came to benefit from that,” Kamal Yatawara, chief executive of The Finance Company said.
“During this period we were able to reduce operation costs by 50 percent.”
Yatawara said operating expenses which stood at 796 million in October is down to 350 million by November 2010.
The Finance had a run on deposits after the collapse of Golden Key Credit Card Company, an unregulated finance company that was part of the Ceylinco group defaulted nearly 27 billion rupees of public’s deposits.
The Finance was heavily into property and it took a further hit after land prices tanked following a burst bubble in 2008.
“We were competing fiercely against Ceylinco group companies. Now we can buy land cheaper and sell at market rate or lesser,” Yatawara said. “Earlier we created markets and created prices.”
But not the firm was liquidating its land holding with a pick up in the market.
The Finance curre