Vallibel Finance replaces Fitch with RAM as rating agency
View(s):Vallibel Finance PLC has requested a withdrawal from the Fitch Ratings and appointed RAM Ratings as its new ratings agency, the company announced this week.
No reason was given for the change. But companies change rating agencies if they disagree with the ratings given. Earlier Hayleys and LOLC also withdrew from Fitch after expressing reservations over issued ratings.
Vallibel said RAM Ratings Lanka has assigned Vallibel Finance PLC long and short-term initial financial institution ratings of BB+ for the long term with a stable outlook and NP for the short- term. “The rating comes in consideration of aggressive loan growth and increases in new deposits,” the media statement said.
Investor Dhammika Perera’s Vallibel Investments own a majority72.87 per cent of Vallibel Finance. The company provides a gamut of financial services including leasing and hire-purchase, pawn broking, micro finance facilities out of the nine branches and five collection centers it operates in a growing island-wide network.
Meanwhile Fitch Ratings, in a separate statement, said it has affirmed and “simultaneously withdrawn Sri Lanka-based Vallibel Finance PlC’s (VFL) National Long-Term rating at ‘BB-(lka)’. The Outlook is Negative”.
It said VFL’s rating and outlook reflect its small but rapidly growing asset base which has expanded nearly five-fold since March 2010, its modest profitability and a developing franchise. “Deterioration in asset quality indicators, along with comparatively weak capitalisation, is also a risk. Elevated liquidity pressures are a risk for all finance companies in Sri Lanka, including VFL”.
Fitch said it has withdrawn the rating as VFL has chosen to stop participating in the rating process, and w ill no longer provide ratings or analytical coverage for VFL.
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