Ram said while a one-off value added tax expenses had led to a pre-tax loss of 4.34 million rupees in 2009 financial year, heavy overheads had continued to take a toll on profits during the first nine months of the financial year ending March 2010.
MFL’s traditionally high cost-to-income ratio (78.67 percent at end September 2009) remained weaker than those of its similar rated peers.
"While margins are expected to uplift the Company’s performance in the short term, a sustainable improvement in its financial performance is yet to be evinced," the rating agency said.
"RAM Ratings Lanka opines that MFL has moderate funding and liquidity positions.
Subsequent to Entrust’s capital infusions in the 2009 financial year, the company’s shareholders’ funds have been its chief funding source.
"In the long run, however, MFL expects to derive its funding primarily from deposits," Ram Rati