Leasing Pioneer

March, 21 (LBO) – Lanka Orix Leasing Company (LOLC) has seen high loan growth with new funding but margins are slimming due to competition, Fitch Ratings said Wednesday confirming the firm's A (lka) rating with a stable outlook. The company has a market share of approximately 8 percent of leasing sector assets, including those of banks, registered finance companies and SLCs, which is held via a network of 17 outlets. LOLC's loan book grew at a high annualised average rate of 40.6 percent in the 2006 financial year and the six months ending September 2006 on account of a surge in funding during the period.

The agency says 73.1 percent of LOLC's funding at end-December 2006 was in the form of borrowings, primarily from local financial institutions.

The company has also managed to source funds from multilateral donor agencies such as the OPEC Fund for International Development, the Netherlands Development Finance Company, and PROPARCO of France, largely due to its affiliation with ORIX of Japan and its strong financial profile.

Fitch says such funds accounted for 16.7 percent of total group funding.

A growing customer deposit base, sourced via its wholly-owned registered finance company, Lanka ORIX Finance (LO