Alliance Finance retains investment grade credit rating of BBB
View(s):Alliance Finance Company PLC (AFC) has been able to retain its investment grade credit rating of BBB- from ICRA Lanka Ltd (ICRA) despite the extremely challenging macroeconomic conditions.
In a media release, AFC said it is the third oldest finance company in Sri Lanka with a heritage built with the trust of four generations of loyal customers spanning a time period of over six decades.
ICRA reaffirmed the credit rating of BBB- of AFC in its latest rating review published on October 31. However, the rating outlook was revised to “negative” given the increase in non-performing loans due to adverse economic conditions and erratic weather patterns in the recent past which has resulted in the banking and finance sector experiencing a steep increase in non-performing loans in 2018 when compared to 2017.
AFC says it has one of the most diversified funding sources amongst finance companies in the country with equity, deposits, bank borrowings and foreign funding from global development financial institutions with a significantly lower dependence on public deposits. The foreign lenders of AFC include the private sector lending arm of the World Bank Group – International Finance Corporation (IFC), Netherland based Tridos Bank, Switzerland based Symbiotics SA and US based Developing World Markets (DWM) while a few more funding lines are in the pipeline from several European countries. “AFC has been very successful in developing such funding partnerships with leading development finance institutions given its strong focus and genuine commitment to its Triple Bottom Line business philosophy which supports and facilitates socially and environmentally sustainable development in Sri Lanka,” the media release said.