Moribund Merchant

May 05, 2009 (LBO) – Merchant Bank of Sri Lanka (MBSL) said its March quarter group net profit fell 5.8 percent to 29.8 million rupees from a year ago, with net interest income flat. MBSL is also acquiring control of Ceylinco Savings Bank (CSB), part of the troubled Ceylinco group, which suffered a run after another group firm, Golden Key Credit Card Company, collapsed.

MBSL was appointed the manager of CSB by the Central Bank in a rescue deal.

Interest income rose 15.7 percent to 406 million rupees while interest expenses fell 22.9 percent to 258 million rupees, with net interest income virtually stagnant at 148 million rupees, the bank said in a sock exchange filing.

Provision for loan losses went up 22.6 percent to 21 million rupees.

Total group assets were up almost 14 percent to 7.8 billion rupees as at March 31, 2009 from a year ago.

MBSL, which is 89.3 percent owned by state-run Bank of Ceylon, has got into the insurance business with the acquisition of ABC Insurance for 77 million rupees.