Where SLF’s funding mix was previously dominated by borrowings, deposits now form the bulk, following a 195.42% y-o-y surge in deposits in FY Mar 2012. Its loan-todeposit ratio (LD) had eased as at end-June 2012, clocking in at 150.79% (end-March 2011: 238.80%), albeit remaining higher than peers’. Going forward SLF intends to obtain from the Netherlands Development Finance Company (FMO), a loan amounting to LKR 1.3 billion, a portion of which would be convertible subordinated loans; however, deposits are expected to remain the Company’s main funding source.
SLF’s liquidity is in line with that of peers; its statutory liquid asset ratio clocked in at 22.47% as at end-March 2012 (end-March 2011: 17.13%), upheld by deposit growth and capital infusions during the year. Nevertheless, liquidity levels fell to 14.98% by end-June 2012, as a portion of liquid assets were utilised to pare down borrowings. Meanwhile, the negative gap between interest-earning assets and interest-b