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Central Rating

Nov 06, 2007 (LBO) – Fitch Ratings Lanka has confirmed Central Finance Company's (CF) long-term rating of 'A+ (lka)' with a 'stable' outlook. CF has a 20 percent interest in Nations Trust Bank ('A (lka)'), a licensed commercial bank.

"CF's rating factors in its strong financial profile and its dominant market position as the second-largest registered finance company (RFC) accounting for 23 percent of sector assets at end-March 2007," Fitch Ratings said.

"The rating is constrained by its lack of product and funding diversity compared to commercial banks - inherent features of the RFC business model."

The rating agency said CF has been successful in creating a strong brand franchise over its 50 year operating history, and in capturing a large customer base through its 42 branches.

Although loan growth slowed to 29 percent in 2007 from 43 percent the previous year it was higher than sector growth of 26 percent.

CF's portfolio is dominated by vehicle finance to the higher end of the subprime market, and in 2007 leases accounted for 72 percent of the company's portfolio and hire purchase agreements accounted for 20 percent

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