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Sri Lanka's finance and leasing sector holds much room for consolidation with almost 80 such companies in the market overtaking the number of commercial banks and insurance companies, said an industry official.
"We feel it is too much a number for a very small country like ours," said D P Kumarage, chief executive and general manager of People's Leasing Company Limited, which claims market leadership with a 20 percent share of the leasing market.
"We feel the industry is overheating."
The island currently has 23 commercial banks and 20 insurance companies in operation.
Kumarage added that although there is an excess of firms in the finance and leasing sector, almost 70 percent of the market is controlled by approximately five companies, leaving much room for consolidation among smaller firms.
"We feel that mergers have to take place," he said.
The Central Bank having brought in regulations to increase capital in firms and finance sector ratios would result in smaller firms finding it hard to meet those requirements, added Kumarage.
People's Leasing is planning to raise USD 70 mn in the country's second largest initial public offer so far with the sale co-managed by NDB Investment Bank and Capital Alliance.
The group posted profits of Rs 2.6 bn in the year to March 2011 on revenues of Rs 10.6 bn. Gross assets of the group amounted to Rs 63.8 bn and equity Rs 8.4 bn.
"We feel it is too much a number for a very small country like ours," said D P Kumarage, chief executive and general manager of People's Leasing Company Limited, which claims market leadership with a 20 percent share of the leasing market.
"We feel the industry is overheating."
The island currently has 23 commercial banks and 20 insurance companies in operation.
Kumarage added that although there is an excess of firms in the finance and leasing sector, almost 70 percent of the market is controlled by approximately five companies, leaving much room for consolidation among smaller firms.
"We feel that mergers have to take place," he said.
The Central Bank having brought in regulations to increase capital in firms and finance sector ratios would result in smaller firms finding it hard to meet those requirements, added Kumarage.
People's Leasing is planning to raise USD 70 mn in the country's second largest initial public offer so far with the sale co-managed by NDB Investment Bank and Capital Alliance.
The group posted profits of Rs 2.6 bn in the year to March 2011 on revenues of Rs 10.6 bn. Gross assets of the group amounted to Rs 63.8 bn and equity Rs 8.4 bn.
