Softlogic Finance posts stable results, pursues tech-driven journey

Softlogic Finance PLC recorded stable results whilst returning to moderate profitability for the nine months ended 31st December 2024 whilst commencing a drive to pursue a tech driven approach in its future journey. The company, a subsidiary of Softlogic Capital PLC, posted profit of 42.2 Million for the period and is committed to embracing innovation, improving client experiences, and addressing the growing demand for digital financial solutions in the country. 

Over the last decade, Softlogic Finance has been instrumental in providing financial services to individuals and businesses all over Sri Lanka, during which time it has operated through a traditional approach of brick and mortar. The Company which came through tough times has commenced a thorough digital transformation strategy with the intention of changing the manner in which financial services are accessed and delivered. This is in recognition of the rapid improvements in technology as well as the evolving preferences of customers towards enabling efficiency and reducing operational costs that would drive future profitability.

Softlogic Finance has completed a remarkable journey in shredding costs and reducing its balance sheet towards being lean, cost efficient and future focused. The Company posted a profit of 42.2 Million for the 9 months to December 2024, whilst Total Assets of the Company were 7.9 Billion, with Customer Deposits of 4.3 Billion, Customer Advances of 4.7 Billion and an Equity position of 2.8 Billion. Both the Tier I Capital Ratio and Total Capital Ratio were at 24.4%, well in excess of the regulatory requirement of 8.5% and 12.5% respectively.

The Company successfully implemented a distressed assets strategy where 1.1 Billion in cash was received representing 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 maneuver 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.

Following the enhanced financial performance of the Company, it will have greater flexibility to expand its lending portfolio and cater to the growing financial needs of individuals and businesses across the country. Softlogic Finance is now well-positioned to scale its operations, introduce innovative financial solutions, and extend its reach in the market, further supporting its vision to lead the fintech transformation in Sri Lanka.

Towards enabling customer convenience, the Company has completed the finishing touches where customers will be able to view their fixed deposit details, leasing contracts and Gold loan contracts online, and are able to make payments at any time, and wherever they maybe to the Company on a 24 X 7 basis. Transfers to Softlogic Finance PLC which is on CEFT can be undertaken instantly. Further product digitization is to be introduced in the near future that will cover products such as Fixed Deposits, Gold Loans and Leasing.

Commenting about the Company’s progress, Softlogic Finance Chairman Ashok Pathirage stated, "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. This transformational approach has enhanced our team in many ways that allow us to take the next steps as a lean and efficient financial institution, fully engaged in providing our customers with meaningful financial solutions that will deliver value. Our journey towards the Fintech sphere is driven by our unwavering commitment to innovation and making the customer our top priority. It is our understanding that the future of finance resides in digital solutions that are not only convenient but also responsive to the specific requirements of our customers. Our objective is to make available the resources that will enable our customers to manage their financial matters in a way that is convenient, secure, and effective.”

Softlogic Finance is part of the Softlogic Financial Services Sector that comprises Softlogic Life Insurance, Softlogic Stockbrokers and Softlogic Asset Management. The Sector operates in a highly regulated framework with Softlogic Finance being regulated by the Central Bank of Sri Lanka.