Fitch rates Sampath Leasing at ‘A(lka)’; Outlook positive
Fitch Ratings Lanka has assigned Sampath Leasing and Factoring
Limited (SLFL) a ‘A(lka)’ National Long-Term rating. The outlook is
positive.
The rating reflects Fitch’s expectation of continuous support from
SLFL’s parent - Sampath Bank PLC (SB, ‘AA-(lka)’/Positive, 100%
ownership), given the strong strategic and operational linkages between
the two entities.
Six out of SLFL’s eight board seats are held by current or former
senior SB officials and directors, including the bank’s CEO on an
ex-officio basis. The board is also advised by SB’s current CFO. SB
guaranteed or directly lent nearly all of SLFL’s borrowings at end-2011
(FYE11).
SLFL also benefits from business referrals from SB’s extensive branch
network, and has a growing number of window offices within the latter’s
branches. In 2011, SLFL accounted for 65% of SB’s consolidated net lease
portfolio growth.
The positive outlook on SLFL mirrors SB’s rating outlook, and
indicates that the ratings of SB and SLFL will move in tandem. A
material weakening of SLFL’s linkages with SB, such as a substantial
dilution in ownership or reduced operational integration, could result
in a rating downgrade. Conversely, a significant increase in SLFL’s
strategic importance to the SB group as measured by its contribution to
the group’s profits or closer operational integration, could result in a
rating upgrade.
|