Dec 14, 2010 (LBO) – RAM Ratings Lanka has given Citizens Development Business Finance (CDB) a long-term financial institution rating of BBB- with a stable outlook and rated short-term debt at P3, a statement said. “The company’s ratings are upheld by its improving performance and healthy asset quality,” the rating agency said.
“Nonetheless, the ratings are pressured by its marginal capital cushioning.”
CDB, which had operated as a specialised leasing company until May 2009, when it obtained a registered finance company (RFC) licence, is now a medium-sized RFC, accounting for 4.07 percent of the industry’s assets as at end-September 2010.
The company, formerly known as Ceylinco Development Bank, was revamped as Citizens Development Business Finance amid a crisis that had brought down the Ceylinco Group when an unregister group finance firm failed.
The firm had made changes to its board by bringing in new independent members to overcome the confidence crisis and its recent listing on the Colombo Stock Exchange has further improved the transparency of its disclosures, RAM Ratings said.
“CDB had aggressively expanded its loan portfolio to 6.60 billion rupees as at end-October 2010, from 5