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 ratings.

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 deposit products.