Q3 2024 Financial Comparison: Citizens Development Business Finance vs. LB Finance

 

Key Financial Metrics

Metric	CDB	LB Finance	Observation
Revenue	Rs. 12,672.4 million	Rs. 23,059.7 million	LB Finance generates significantly higher revenue, showcasing larger operations.
Net Interest Income	Rs. 5,503.4 million	Rs. 12,558.3 million	LB Finance outpaces CDB, indicating a stronger core financing business.
Profit Before Tax	Rs. 2,423.8 million	Rs. 7,570.9 million	LB Finance’s profitability is significantly higher.
Profit After Tax	Rs. 1,712.8 million	Rs. 4,705.2 million	LB Finance reports much higher net profit.
Operating Expenses	Rs. 3,336.7 million	Rs. 4,918.4 million	LB Finance incurs higher operating expenses but offsets them with greater revenue.
Total Assets	Rs. 141,731.1 million	Rs. 212,259.9 million	LB Finance holds a significantly larger asset base.
Deposits from Customers	Rs. 80,752.6 million	Rs. 127,824.9 million	LB Finance holds more customer deposits, indicating a broader customer base.
Equity	Rs. 21,401.5 million	Rs. 46,675.7 million	LB Finance demonstrates stronger financial stability.
Earnings Per Share (EPS)	Rs. 24.17	Rs. 8.50	CDB has a higher EPS, likely due to a smaller share base.

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Insights into Operational Efficiency

Cost-to-Income Ratio

• CDB: 60.6%
• LB Finance: 39.1%

Observation:
LB Finance operates with a lower cost-to-income ratio, reflecting superior cost management and operational efficiency.

Operating Expenses

• While LB Finance has higher absolute operating expenses (Rs. 4,918.4 million vs. Rs. 3,336.7 million for CDB), its larger revenue base ensures these costs are well-absorbed, contributing to greater profitability.

Profit Margins

LB Finance achieves higher profit margins due to effective cost control and a larger scale of operations, highlighting its ability to maximize income relative to expenses.

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Conclusion

LB Finance leads in revenue, profitability, asset base, and operational efficiency, making it a dominant player in the financial services sector compared to CDB. Its lower cost-to-income ratio and better profitability reflect superior management of expenses and scalability.

Conversely, while CDB demonstrates a higher EPS, its overall financial and operational metrics indicate room for improvement, particularly in cost control and income generation.

LB Finance’s performance underscores its robust position in Sri Lanka's financial market, driven by efficient operations and a larger market presence.

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