Aug 28, 2009 (LBO) – RAM Ratings Lanka has upgraded the long-term rating of LB Finance (LBF) by one notch to ‘BBB’ from ‘BBB-‘ with a ‘stable’ outlook and its short term ‘P3’ rating has been confirmed.
LBF’s return on assets (ROA) rose to 4.49 percent by March 2009 (end-March 2008: 4.01 percent) and return on equity (ROE) rose to 47.77 percent (end-March 2008: 45.47 percent).
RAM Ratings Lanka says the company had performed consistently better than its peers over the past four years.
RAM said LBF’s profit growth is expected to moderate compared to last year’s level it is expected to remain above industry average.
Better performance, a 450 million rupee debenture issue and a rights issue last year, had also strengthened its capital position.
LBF has maintained its Tier-1 capital adequacy ratios at 12.95 percent and overall ratio at 17.26 percent, which is well above the regulatory requirement.
In line with the improving asset quality, LBF’s net NPL to shareholders’ funds was to 14.41 percent by end March 2009 from 17.91 percent in 2008.
Public deposits had grown to 9.56 billion rupees by March 2009 from 7.31 billion in 2008.amounting to nearly 75.50 percent of