Sri Lanka’s LB Finance ‘A- (lka)’ rating confirmed

Sri Lanka’s LB Finance ‘A- (lka)’ rating confirmed

Fitch Ratings – Colombo – 01 Sep 2021: Fitch Ratings has affirmed LB Finance PLC’s National Long-Term Rating at ‘A-(lka)’. The Outlook is Stable. Fitch Affirms LB Finance at ‘A-(lka)’; Outlook Stable At the same time, Fitch has affirmed the company’s Sri Lankan rupee-denominated senior unsecured debt at ‘A-(lka)’ and rupee-denominated subordinated debt at ‘BBB(lka)’.

“Asset quality risk remains a key concern for overall credit profiles of FLCs such as LB due to their high exposure to customer segments that are more susceptible to deteriorating economic conditions,” Fitch said. LB’s stage 3 (impaired) loans ratio, including facilities over 90 days due, had increased to 11.4 percent by end-FY21 from 10.7 percent at end-FY20.

“Fitch expects asset quality pressures to persist in the near to medium term, due to credit migration amid a challenging operating environment.” The company’s five-month gross non-performing loan ratio worsened to 6.1percent in the first quarter of the financial year from 3.9 percent last year driven mostly by vehicle financing and gold loans where collections were hampered by lockdowns.

It also reflects high profitability from high-yielding products and satisfactory capital levels. This is counterbalanced by a high-risk appetite due to a large and increasing exposure to gold-backed lending. The operating environment in Sri Lanka remains challenging. Sri Lanka’s real GDP contracted by 3.6% in 2020 on disruption stemming from the coronavirus pandemic. Fitch forecasts an economic rebound in 2021 and 2022, but this depends on how the pandemic evolves. Our assessment of the operating environment for Sri Lankan FLCs also incorporates the negative implications for FLCs through the effects on their largely sub-prime clientele and the prolonged restriction on motor vehicle importation. LB’s National Long-Term Rating is driven by its intrinsic financial strength and reflects its established domestic franchise as Sri Lanka’s third-largest finance and leasing company (FLC), accounting for 10% of total FLC sector assets as of the financial year ended March 2021 (FY21).

NATIONAL RATINGS AND SENIOR DEBT RATINGS KEY RATING DRIVERS

The News Highlights

  • Sri Lanka’s LB Finance ‘A- (lka)’ rating confirmed
  • Check the latest News news updates and information about business, finance and more.
Disclaimer: If you need to edit or update this news from compsmag then kindly contact us Learn more

For Latest News Follow us on Google News


Latest Headlines
  • Show all
  • Trending News
  • Popular By week
A man from Whittemore has been charged with planting pipe bombs outside of cell phone stores
A man from Whittemore has been charged with planting pipe bombs outside of cell phone stores
Authorities filed charges Tuesday against John D. Allen of Whittemore, less than a week after explosives and notes threatening Verizon and AT&T were ...
To report bad drivers, call the state’s now-defunct phone number
To report bad drivers, call the state’s now-defunct phone number
The line will stop taking messages on Wednesday. The phone number you can use to report HOV violators and ferry line cutters is going away. The 976-HERO ...
Microsoft’s new flagship laptop, the Surface Laptop Studio, is a formidable machine
Microsoft’s new flagship laptop, the Surface Laptop Studio, is a formidable machine
“Surface Laptop Studio is the most powerful Surface we’ve ever built,” says Pete Kyriacou, vice president of devices at Microsoft. “It is the culmination of ...
Townscaper is a beautiful city-building game that has made the leap from Steam to Android
Townscaper is a beautiful city-building game that has made the leap from Steam to Android
You can watch August’s community trailer above, and as you can see, Townscaper is a gorgeous game that revolves around city building. Unlike typical mobile ...
Gabby Petito’s final ‘odd text’ was sent from her phone. In the Warrant, it was revealed that
Gabby Petito’s final ‘odd text’ was sent from her phone. In the Warrant, it was revealed that
In the recently unsealed search warrant filed on Sept. 17 for an external hard drive in the van Petito was traveling in, police wrote that her mother, Nicole ...
Valve wants you to try out Steam games before they’ve ever been downloaded
Valve wants you to try out Steam games before they’ve ever been downloaded
Spotted by SteamDB creator Pavel Djundik, the patent outlines a Steam mechanic that could potentially “track system read operations”, effectively allowing ...
Lebanon increases fuel prices for the 2nd time in 5 days
Lebanon increases fuel prices for the 2nd time in 5 days
Lebanon has been experiencing a crippling economic and financial crisis, which the World Bank has described as one of the worst in the world in the last 150 ...
Baptist Health Corbin awards 22 academic scholarships
Baptist Health Corbin awards 22 academic scholarships
Jordan Wilson Dorothy James John Lowe Sarah Ashley Emily Davenport Ryleigh Swafford Madicyn Wynn Makayla Mack Rhiannon Spradlin Cody Evans Kara Grisell Dylan ...
Health leaders warn of rising cases among Ohio youth |  News, Sports, Jobs
Health leaders warn of rising cases among Ohio youth | News, Sports, Jobs
During that same time, there were 47 hospitalizations for those younger than 50 with COVID-19 compared to 398. The 398 during the week of Sept. 5 is the most ...
The Case of Disappeared Van life Blogger, Gabby Petito and How it Took All Over the Internet
The Case of Disappeared Van life Blogger, Gabby Petito and How it Took All Over the Internet
In July, Ms. Petito, 22, embarked from New York on a cross-country road trip with her fiancé, Brian Laundrie, 23. As they made their way out West in a white ...
Show next
Compsmag - Latest News from tech, business and health
Logo