‘BBB ika’ rating affirmed

AFFIRMATION: Fitch Ratings Lanka has affirmed Singer Finance (Lanka) Limited’s (SF) ‘BBB(lka)’ National Long-term rating. The outlook on the rating is stable, a press release states.

The principle factor behind the rating is the implied support from parent Singer (Sri Lanka) Limited (SSL) (senior unsecured debentures ‘A+ (lka)’ with Stable Outlook), a leading consumer durables retailer which fully owns SF.

On SF’s part, it provides SSL with strategic benefits, in terms of financing its products and broadening and diversifying the group’s portfolio. Fitch therefore believes SF will enjoy a fair degree of business and financial support from its parent company.

SF grew its loan book rapidly from LKR 96.3 million at FYE05 to LKR 454.1m at FYE06. SF has been moving increasingly into vehicle financing, through lease and hire purchase (HP) agreements which accounted for 60.4% of its portfolio at FYE06.

The remainder of the loan portfolio consists of consumer durables financing through HP and loans, where SF benefits from the expertise and franchise of its parent.