Oct 21, 2009 (LBO) –Sri Lanka’s The Finance Company (TFC), a former unit of the troubled Ceylinco Group, said it made a 2.5 billion rupee loss in 2008, owing to a slump in property prices and a run on deposits.
TFC said in a statement the company had been adversely affected by the high profile collapses of unregistered finance companies which triggered a run on deposits at other firms.
The run was sparked by the collapse of Golden Key, an unlisted unit of the Ceylinco group, and another firm known as Sakvithi last year.
“In the latter part of the year 2008 the public lost confidence in some of the deposit taking financial institutions, which caused panic and resulted in substantial withdrawals of deposits from the registered finance companies too,” the TFC statement said.
The company’s public deposit base which stood at 30 billion rupees on December 31, 2008, fell to 27 billion rupees as at March 31, 2009.
The company’s net revenues had shrunk almost 6.0 percent to 10.6 billion rupees from 2007.
Net interest income had dropped 49.6 percent to 73.87 million rupees.
In 2009 interest income was up 11.2 percent to almost 7.0 billion rupees, while interest expenses had shot up 45