LB Finance rated at 'A-(lka)'; Outlook Stable

Fitch Ratings Lanka Ltd has affirmed LB Finance PLC's long term rating of 'A-(lka)'; Outlook Stable during their annual ratings review of NBFI's on 2nd August 2016. According to the rating agency the rating of LB captures its established franchise as the third largest non-bank financial institution in Sri Lanka in terms of assets, and its satisfactory levels of capital, which are supported by healthy revenue generation and sound profitability through its higher yielding products.

Commenting on the rating affirmation by Fitch, LB Finance PLC Executive Director Mr. Niroshan Udage expressed "This reassures to our customers our commitment to sustainable growth underpinned by strong underwriting practices and recovery efforts to deliver maximum financial stability".

Continuing the exceptional momentum from last financial year, the company reported a profit after tax (PAT) of Rs. 912 million for the 1st Quarter of 2016/17. This was an 18% growth from Rs. 776 recorded in the 1st Quarter of the previous year. The Interest Income for the 1st Quarter was up by 20% from the previous year 1st Quarter and exceeded the Rs 4 Billion mark.

Amidst several challenges such as low liquidity, higher cost of funds, volatile margins and slowdown in demand for new vehicles posed by the external market forces, the company's resilience and adoptability has helped it achieve a commendable growth in all key business segments underlying solid financial performance, Mr Udage expressed

The total assets base reached Rs. 85.5 billion with public deposits being the largest component in the funding mix with Rs. 52.5 billion.

The company remained well capitalized with Core Capital to Risk Weighted Asset Ratio of 16.2%.