Central Finance assigned 'A+(lka)'
Fitch Ratings Lanka Limited, assigned a 'A+(lka)' national Senior
Unsecured Long-term rating to Central Finance Company Limited ("CF").
The rating outlook is Stable.
A+(lka) ratings denote a low expectation of credit risk. The capacity
for timely payment of financial commitments is considered strong. This
capacity may, nevertheless, be more vulnerable to changes in
circumstances or in economic conditions than is the case for higher
CF's rating reflects its long operating history, strong financial
profile and well established customer franchise in its core business
segments. Management has displayed conservatism and the company's asset
quality, solvency and capital position compares well with peers. At the
same time, the rating takes into consideration the somewhat limited
product and revenue diversity of CF.
Over the years, CF has established a strong franchise with a network
of thirty-three branches. The company's core activity is the provision
of motor vehicle finance. CF also grants operating leases and provides
fleet management services to corporate customers. Portfolio growth has
been healthy averaging around 21% p.a. over the past three years and is
expected to remain robust going forward.
CF has also expanded into the importation and sale of vehicles to
complement its vehicle financing business and undertakes real estate
development on a selective basis. The company intends to deepen its
presence in the Western Province to tap the high margin segments of the
market and grow its vehicle sales operation.
CF's main source of funding is retail customer deposits. Due to the
strong franchise developed over its long operating history, the company
enjoys a high deposit renewal rate.
CF is in the process of setting up systems and infrastructure,
including an ATM network to support the recently introduced savings