Softlogic Finance returns to moderate profitability

Softlogic Finance PLC, a subsidiary of Softlogic Capital PLC, returned to moderate profitability for the nine months ended December 31, 2024, its latest interim financial statement showed. 

The company posted a profit of Rs.42.2 million for the period, while the total assets of the company were Rs.7.9 billion, with customer deposits of Rs.4.3 billion, customer advances of Rs.4.7 billion and an equity position of Rs.2.8 billion. 

Both the Tier I capital ratio and total capital ratio were at 24.4 percent, well in excess of the regulatory requirement of 8.5 percent and 12.5 percent, respectively.

The company implemented a distressed assets strategy, where Rs.1.1 billion in cash was received, representing Rs.2.6 billion in gross advances that were taken over by a special purpose vehicle (SPV) set up by the group, that would enable Softlogic Finance to move forward without the lag of impairment from these loans and make a fresh start. “Fulfilling the SPV structure and completion of the initial manoeuvre have showcased the depth and finesse of financial understanding that have been completed with minimal assistance where the company will continue the aggressive recovery drive that has substantially contributed to the turnaround in performance,” the company said in a commentary that followed the interim results.

Softlogic Finance noted that following the improved financial performance of the company, it would have greater flexibility to expand its lending portfolio. It also pointed out that it is commencing a drive to pursue a tech-driven approach in its future journey.

“We have come through a tough situation and completed a remarkable journey that has brought out the strengths of the team on recoveries and liquidity management, that gives us great confidence for the future. 

Our journey towards the fintech sphere is driven by our unwavering commitment to innovation and making the customer our top priority,” said Softlogic Finance Chairman Ashok Pathirage.