May 28, 2012 (LBO) – Sri Lanka’s Central Bank said, The Finance Company, a firm that is being bailed out under regulatory supervision is stable and expressed confidence that it will return to profits. The Central Bank said The Finance has increased its deposits by 5.36 percent and its lending portfolio by 11 percent in the year to April 2012, from a year earlier.
“Further, the company is now embarking on a path towards profitability, after a period
of rather steep losses reported before the restructuring,” the Central Bank said.
The firm had issued new shares at 40 rupees as part of a restructuring process, and the stock is now trading at a lower price after going as high as 48 rupees.
The Finance Company hit the headlines after its stock was sold to a state bank at a 60 percent premium above market price, leading to questions about its profitability and negative net worth.
The Central Bank said the public should not be “misled by statements about the company’s
progress and functions, as made by certain politically motivated persons.”