March 21 (LBO) – Kandy based Sinhaputhra Finance Limited (SFL) has earned a BB (lka) rating with a stable outlook, Fitch Ratings Lanka said Wednesday. The present Joint Managing Director Ravana Wijeyeratne owns 52 percent of the company’s equity with the remainder being held by its employees. “SFL’s rating reflects its modest profitability, relatively better systems and procedures, as well as modest product diversity,” Fitch Ratings said.
“While SFL’s asset quality and solvency measures at a regulatory level were satisfactory, the rating was constrained by significantly weaker ratios at the more stringent three-month non-performing loan classification.”
Sinhaputhra’s portfolio growth slowed to 28 percent in the 2006 financial year, versus 37 percent in 2005 with the firm pushing to dispose of repossessed vehicles, rather than focusing on portfolio growth.
“SFL’s customers are limited to the Central province and comprise the riskier sub prime market,” Fitch said.
Vehicle finance (lease and hire purchase agreements) made up most of the lending at 56 percent at the six month period ending September 2006 compared to 60 percent in 200