Vehicle Rating

Sri Lankan Police forming a human chain in parliament to protect the Speaker and enable a vote.

Sept 13 (LBO) – Sri Lanka’s largest leasing company People’s Leasing got a stable A-(lka) long term rating from Fitch Ratings Lanka, led by strong growth in its vehicle lease portfolio. The company’s vehicle lease portfolio has tripled between 2003 and 2006, with commercial vehicles such as buses and lorries accounting for a bulk of the leases, Fitch said in a statement on Wednesday.

The strong growth in the company’s lease portfolio has also seen its overall non-performing loans as at end of the 2006 financial year, drop to 7.4 percent compared to 9.9 percent in 2002.

The improvement in this ratio is largely due to PLC’s lease portfolio doubling over this period whilst NPL accretion has been relatively modest.

However, Fitch is concerned with PLC’s large exposure to bus operators (30.8 percent of lease portfolio assets were on buses) which are increasingly affected by rising fuel costs and regulated fares.

Return on assets was 3.3 percent over 2.3 percent in the 2005 financial year, with the company’s net interest margin also nearly reaching the 10 percent industry average after consistent gains since 2001.

The company’s interest margin