Jan 15, 2009 (LBO) – People’s Leasing Company, Sri Lanka’s largest leasing firm, is slowing new lending and focusing on recoveries as a prudential measure as economic conditions weaken, a top official said.
“About six to seven months back we expected that there might be a problem in the industry,” says D P Kumarage, the chief executive of People’s Leasing Company (PLC).
“But we didn’t expect the problem to be to this bad, and we gradually cut down on credit and concentrated more on recoveries.”
The firm has a 33 billion rupee portfolio holding an estimated 19 percent of the leasing market in Sri Lanka.
People’s Leasing, Central Finance, Lanka Orix Leasing Company (LOLC) and Commercial Leasing control over 50 percent of Sri Lanka’s leasing business, Kumarage said.
Kumarage said the firm’s non-performing loan (NPL) ratio was 4.2 percent at end 2007, and has improved to 3.7 percent in 2008.
“Lot of people are asking how we are managing, in fact our NPLs are better than last year despite all these problems, said Kumarage.
“When we cut down on credit our portfolio became quite good and giving more attention to our recoveries was one of the main things that helped us i