Ideal Finance Limited (IFL) has opened its 13th branch in Welimada, as part of the company’s massive expansion to more than double its branch network, adding 15 new locations during the current fiscal year ( fiscal year 2021/22).
The new branch, which provides a range of services such as leasing, loans (including gold lending) and deposits, was opened by IFL in Welimada, given the importance of the region as a as a hub for hinterland vegetable production and as the location of the Keppetipola Economic Center, a key trading center for many types of products.
The opening of the Welimada branch will be followed by the opening of new branches in several key locations in September, as Ideal Finance strengthens its branch network through several key recent developments. These include attracting new foreign direct investment (FDI) from the Indian company Mahindra & Mahindra Financial Services Limited (MMFSL), a revaluation of the IFL rating by Fitch and the registration of its better financial performance during the last financial year (financial year 2020/21). .
With the latest investment, MMFSL is now the largest shareholder of Ideal Finance with a 58.2% stake, making Ideal Finance its second foreign subsidiary. MMFSL’s total investment in IFL amounts to LKR 2 billion. Earlier in 2020, MMFSL secured a 38.2% stake in Ideal Finance, providing the latter with the backing of a financial giant with more than $ 11 billion in assets under management, far exceeding that of the entire banking sector in Sri Lanka.
Fitch Ratings also recently upgraded Ideal Finance’s rating to “AA- (lka)” from “BB- (lka)” and assigned it a “stable outlook”, providing an additional vote of confidence on stability and outlook. of the society.
Adding new positive momentum to these developments, Ideal Finance posted its best annual financial performance in the fiscal year ended March 31, 2021, forcefully overcoming a host of COVID-19 issues. During the same period, the country’s non-bank financial institutions (NBFIs) sector experienced a notable decline, reporting declining profitability and an increase in non-performing loans (NPLs).
However, against the trend of the industry, Ideal Finance has achieved both an increase in profitability and a reduction in its NPL ratio. Profit before tax (PBT) increased 76% to LKR 288.4 million in the year ended March 31, 2021, year-on-year. Profit after tax (PAT) increased 74% to LKR 183.8 million year-on-year. The gross NPL ratio improved to 3.3% for the year, compared to 5.2% the previous year.
“Mahindra & Mahindra Financial Services demonstrating their confidence in Ideal Finance and Sri Lanka with this investment is a timely vote of confidence both on the country’s economic outlook and on the stability and growth trajectory of Ideal Finance,” said said Nalin Welgama, President of Ideal Group. . “The company’s outstanding performance amidst many challenges, outperforming the industry in all key metrics, demonstrates that confidence in Ideal Finance was well placed. “
“Cautious strategic changes have paid dividends, as evidenced by this performance,” said Duminda Weerasekare, CEO of Ideal Finance. “However, it is perhaps even more laudable that in addition to the near-term improvements, the developments undertaken during this difficult time have laid the groundwork for a high long-term growth trajectory – particularly with the launch of our new digitization strategy. “
“The expansion of our branch network will further strengthen Ideal Finance’s presence in key areas outside of Western Province,” said Nilanga Jayalath, Regional Director of Ideal Finance. “This positions Ideal Finance well to support and benefit from the growth of sectors such as agriculture, as the country focuses on stimulating domestic production. “
Ideal Finance Ltd. (IFL), an NBFI registered with the Central Bank of Sri Lanka, began operations in March 2012 with a clear focus on the rural and semi-urban sectors. Its loan portfolio consists of gold loans, SME loans, personal loans, automobiles, three-wheelers and commercial vehicles. IFL has developed a quality loan portfolio, while recording sustainable annual growth in profitability.