Asset Quality

June 27, 2011 (LBO) – Fitch Ratings Lanka has confirmed Sinhaputhra Finance’s (SFL) national long-term rating at ‘B(lka)’ with a negative outlook. The confirmation reflects the latest improvement in SFL’s credit risk management practices and the subsequent “stabilisation” in its asset quality, although the latter still remains weaker than its peers’ average, a statement said.

“The rating may face downward pressure if SFL fails to prevent its asset quality and net non-performing loans (NPL)/equity from weakening under the regulatory six-month classification,” Fitch said.

The full text of the statement follows:

Fitch Ratings Lanka has affirmed Sinhaputhra Finance PLC’s (SFL) National Long-Term rating at ‘B(lka)’. The Outlook is Negative.

The affirmation reflects the latest improvement in SFL’s credit risk management practices and the subsequent stabilisation in its asset quality, although the latter still remains weaker than its peers’ average. The rating may face downward pressure if SFL fails to prevent its asset quality and net non-performing loans (NPL)/equity from weakening under the regulatory six-month classification.