Nation Lanka Finance PLC, previously Ceylinco Finance PLC, has closed the financial year ended March 31, 2009 with a group loss of Rs.788.4 million, down from a profit of Rs.14.5 million a year earlier and a company loss of Rs.265.8 million, down from a profit of Rs.29.4 million the previous year.

The company is now under a new management under Mr. N.B.S.B. Balalle, a former General Manager/CEO of the National Savings Bank (NSB) who later served as Acting Chairman and Executive Director.

Subsequent to his retirement from NSB, Balalle was Managing Director/CEO of the Union Bank. With over 35 years of banking experience holding senior positions including that of AGM at the Bank of Ceylon, Sampath Bank and Commercial Bank, he was named the new Chairman of Nation Lanka Finance in April last year.

Balalle said in the company’s annual report for the year ended March 31, 2009 that the group had performed "moderately overall" weathering turbulence specially in the last quarter of the year under review.

"Notwithstanding this (the company) was able to maintain a reasonable asset base while managing to reduce its liabilities," he said.

Sounding a note of optimism, Balalle reported an increase in the company’s hire purchase and loan portfolios over the previous year attributed to hands-on management methods. He cautiously held out the hope that the group "could position itself for greater success in the future."

The company with a stated capital of Rs.278.5 million and shareholders funds of Rs.391.8 million carried liabilities of nearly Rs.3.7 billion as at March 31, 2009 while group liabilities were a hefty Rs.8.1 billion.

Balalle said that the group will continue to push towards consolidating its position in the finance and real estate sectors divesting some of its non-performing and under-performing subsidiaries and will focus on building and strengthening its brand image subsequent to the name change.

"In the ensuing year our focus will be on improving governance, operational efficiency and profitability," he said.

"Plans are also underway for venturing out into the North and East of the country, which areas show great potential for development. These initiatives we believe will enable us to become a financially sound and trusted entity."

The group’s Acting Managing Director/CEO, Mr. W.D.B.C.J. Fernando said that they were working on obtaining a finance company license and had kept their focus on brand image building.

The group’s performance had declined mainly because rise in cost of capital with interest rates continuing to escalate as well as a lackluster real estate and property market, he said.

``The real estate and property development business continued to be amongst the worst affected industries that were most significantly affected by the global economic melt down," he noted.

However their real estate division had posted a gross profit of Rs.49.5 million for the period under review becoming the second main contributor towards the company’s progress.

He was hopeful that with the dawning of peace in the country, conditions would improve creating a higher demand for real estate and greater attention will be paid to this activity.

Fernando said they were upbeat about the future of the group in the context of the general improvement in the money market and low interest rates. Nation Lanka was strong in financial services, real estate and property development, all of which would benefit by an improved national economy.

No dividend has been recommended for the year under review.

Nation Lanka recently floated a rights issue to raise Rs.239.8 million by the issue of nearly 20 million new shares priced at Rs.12 each to meet the working capital requirements of the company. Nearly Rs.228 million of the funds to be raised will be used for lending purposes.

The company also intend raising a furthers.700 million by sale of assets, Rs.241 million by sale of shares of subsidiary companies and Rs.250 million through debt instruments.

Ceylinco group companies were among the major shareholders of Nation Lanka where the largest individual shareholder is AFL Development Limited (17.335%) followed by Ceylinco Insurance (13.57%) and Ceylinco Securities Share Ownership Trust (12.39%). Two directors, Mr. W.G.B.M. Ranaweera (8.76%) and Dr. T. Senthilverl (4.66%) are also among the major shareholders.