LMD 100 Q&A

RANK 56 | 60

Structural reforms – especially those encouraging foreign direct investments (FDI) and market confidence – are the keys to sustainable growth and long-term stability

 

Q: As Sri Lanka embarks on a fresh chapter in the context of politics and the economy, how ready and geared is the corporate sector to drive growth while overcoming the ripples of past challenges?

Dilshan Wirasekara (DW): The private sector has always been the driving force behind Sri Lanka’s economic growth, even in challenging times. A good indicator of its readiness is the performance of listed companies on the Colombo Stock Exchange (CSE) – recent quarterly earnings show a substantial increase in profitability, indicating that companies are doing well.

Over the past decade, Sri Lanka has seen four changes of government, each with radical shifts in policy. So despite the private sector’s readiness, it is held back by instability, policy inconsistencies and a volatile macroeconomic environment in which businesses are unable to achieve their full potential.

Consistent policies and a stable economic environment are needed for companies to deliver positive results. If the government honours its commitments – particularly under the IMF programme and avoids drastic policy changes – businesses will do what they were unable to do in the past: invest confidently, take risks and make the most of growth opportunities.

Q: How is your company faring against the backdrop of the prevailing macroeconomic milieu?

Sachith Perera (SP): Despite volatile markets, our experience and expertise in research and data analytics have allowed us to stay ahead and capitalise on fluctuations. As a result, we have surpassed our historical performance by a significant margin.

We have also expanded our client base, shifting the focus from mostly institutional clients to more individual investors.

Compared to three years ago, our balance sheet has grown by between 300 and 400 percent, which shows our ability to navigate the market effectively and stay ahead of the curve.

Q: What trends do you observe in your sector – and what have you done as a business to optimise some of these?

DW: Traditionally, most public savings are held in bank deposits with a similar portion invested in government securities by institutional investors. Financial institutions and high net worth individuals also hold a considerable portion of Sri Lanka’s wealth.

However, we are currently witnessing a shift. With low interest rates, there is growing demand for better returns than those offered by traditional bank deposits and an increased interest in alternative asset classes such as equities.

We see a unique opportunity in this evol­ving landscape. As awareness about alternative investments grows, our aim is to enhance financial wellbeing by improving financial literacy, providing innovative solutions and helping individuals achieve better returns and living standards.

Q: To what extent does your company use technological advancements in its operations?

DW: We believe technology can help us reach our full potential in Sri Lanka. While the industry has been traditionally manual and paper-based, we’ve taken great strides in digitalising operations.

With the introduction of digital on boarding for example, ‘electronic know your customer’ (eKYC) enabled clients can open accounts without the need for a physical meeting, streamlining the entire process.

By offering information access and investment management through our digital platforms, we have improved transaction ease and client engagement. We are the only financial institution to launch an investment and withdrawal service over WhatsApp – an innovation that recently won us a gold award at the NBQSA National ICT Awards 2024.

We’ve achieved another industry first by introducing a debit card for unit trust transactions, a move that will transform the landscape of saving, and we are in the process of developing a fully integrated mobile wallet.

Q: Your wish list for Budget 2025 is…?

SP: Maintaining fiscal discipline and staying on course with the IMF programme is crucial to avoiding market speculation or instability. Additionally, structural reforms – especially those encouraging foreign direct investments (FDI) and market confidence – are the keys to sustainable growth and long-term stability in Sri Lanka.

Q: Could you outline your company’s plans, particularly regarding expansion?

DW: We see significant growth potential within Sri Lanka. With a presence in six locations including the north and east, we’re looking to expand further with new branches in Gampaha, Anuradhapura and Ratnapura. Our goal is to make capital market products accessible to as many people as possible.

We also aspire to expand regionally, focussing on markets such as Bangladesh and Cambodia – countries with strong economic growth but less developed capital markets.

REVENUE (RS. M)
29,564 I 26,599

REVENUE CHANGE
107% I 167%

PROFIT AFTER TAX (RS. M)
10,156 I 11,143

PROFIT CHANGE
284% I 286%

TOTAL ASSETS (RS. M)
78,671 I 64,556

SHAREHOLDERS’ FUNDS (RS. M)
7,119 I 7,679

MARKET CAP (RS. M)
13,932 I 15,205

EARNINGS PER SHARE (RS.)
22.15 I 18.10

PRICE EARNINGS RATIO
1.55 I 1.36

EMPLOYEES
122 I 17

Telephone: 2639898/2651651 | Email: info@firstcapital.lk | Website: www.firstcapital.lk