Apr 01, 2011 (LBO) – Fitch Ratings Lanka has raised Ceylease Financial Services’ rating outlook to stable from negative and confirmed its ‘BB+(lka)’ rating. CFS’s total assets amounted to 1.5 billion rupees in 2010. The outlook revision reflects CFS’s improving financial profile, underpinned by better credit controls and more stringent recovery efforts, a statement said.
Fitch said it expects the favourable trend in recoveries to continue in 2011 given strengthened credit management and better macro economic conditions.
Fitch said the long-term rating benefits from the fact that Bank of Ceylon, rated ‘AA(lka)’ which has a 55 percent shareholding of CFS, intends to retain CFS within its wider group through merger with its several other group companies.
A majority of CFS’s board consists of senior BOC officials, including a Director who is chairman of CFS, and Chief Financial Officer. BOC also appoints CFS’s Managing Director.
BOC also continues to be a key creditor to CFS and subscribed to its rights issue that brought in 100 million rupees of fresh equity in late-2009.
On 26 August 2010, Merchant Bank of Sri Lanka, a 72 percent-owne