March 23, 2007 (LBO) – Singer Sri Lanka’s finance company arm has seen rapid growth in 2006 with the firm moving heavily into vehicle financing Fitch Ratings said, confirming its BBB (lka) rating with a stable outlook.
“Singer Finance (SF) grew its loan book rapidly from 96.3 million rupees in 2005 to 454 million rupees in the 2006 financial year,” Fitch Ratings said.
“SF has been moving increasingly into vehicle financing, through lease and hire purchase (HP) agreements which accounted for 60.4 percent of its portfolio.”
The rest of the loans are made of consumer durables financing where the firm benefits from the expertise and franchise of its parent.
Fitch said the implied support from parent Singer (Sri Lanka) Limited, a leading consumer durables retailer which fully owns SF, was the principle factor behind its BBB(lka) rating.
“On SF’s part, it provides Singer Sri Lanka with strategic benefits, in terms of financing its products and broadening and diversifying the group’s portfolio,” the rating agency said.
“Fitch therefore believes SF will enjoy a fair degree of business and financial support from its parent company.”
SF’s asset quality compares favourably to its peers, thoug