Lease Rate

Sri Lanka's Prime Minister Ranil Wickremesinghe arrives with flowers to receive blessings at the Gangaramaya Buddhist Temple, Colombo, Sri Lanka on Wednesday 4 April 2018. On wednesday (4), Wickremesinghe survived a no-confidence motion in the Sri Lankan parliament with a 46 vote majority after a 12-hour debate with 122 MPs voted in his support while 76 MPs voting to remove the prime minister. (Photo by Tharaka Basnayaka/NurPhoto via Getty Images)

June 02, 2008 (LBO) – Fitch Sri Lanka has lifted the credit watch on Commercial Leasing Company (CLC), following a take-over, and confirmed its ‘A-(lka)’ rating with a ‘stable’ outlook. CLC was taken over by Lanka Orix Leasing Company (LOLC) last month and was put on credit watch on May 16.

The resolution of the rating watch came with improvements in asset quality of its lease and hire purchase portfolio, in contrast to a reversal seen at the last review, good profitability and sound capitalization, Fitch said.

It also had a good brand franchise within non-bank financial institutions. Fitch said CLC’s rating was supported by the implied support deemed to be available from LOLC which was now the main shareholder.

LOLC’s shareholding may go up further after a buyout offer to other shareholders to be concluded in the next two months.

CLC’s gross non performing leases and hire purchase loans (gross NPLs) fell in absolute terms during the second half of 2007 with better recovery efforts.

Its gross NPL ratio reduced to 6.9 percent during the first quarter of 2008 from a high of 12.6 percent at the first quarter of 2007.

Loans grew slowly at 2.2 percent. CLC’s