Report
card on Senkadagala
LRA assigns A3/L2 rating to Senkadagala Finance Company
Malaysian-backed Lanka Rating Agency Ltd (LRA) has assigned a long-term
financial institution rating of A3 (with a stable outlook) and a
short-term rating of L2 to Senkadagala Finance Company Ltd.
The
ratings reflect Senkadagala’s commendable asset quality, above-average
profitability, satisfactory liquidity and sturdy capitalization,
LRA said in a statement.
Senkadagala
is LRA’s first rating to be published – since it entered
the ratings’ industry a year ago -- as well as the first dual
rated company in Sri Lanka.
So far 15 finance companies have signed up LRA which has completed
12 assignments. “We have another leasing company and a merchant
bank that have signed the agreement for rating,” an LRA official
said.
Senkadagala
is a licensed finance company registered under the Finance Companies
Act No. 78 of 1988 and incorporated in Kandy. It is also registered
under the Finance Leasing Act No. 56 of 2000, to carry out its leasing
business.
The
company headed by Lakshman Balasuriya, the Chief Executive Officer,
is supported by an able team of senior managers whose competency
is reflected in the company’s sound performance.
LRA
said Senkadagala had been the first finance company in Sri Lanka
to obtain a domestic credit rating. It also won the “Best
Annual Report” award for registered finance companies in 2004,
conducted under the aegis of the Institute of Chartered Accountants
of Sri Lanka.
Sound
lending practices and effective portfolio management have propelled
Senkadagala’s asset quality to the forefront of the domestic
finance-company industry. “Senkadagala’s powerful information
technology (IT) system provides real-time information, enabling
the management to have greater control over its portfolio. As a
result, this portfolio has been managed within acceptable credit
parameters, resulting in better collections and less overdues. Senkadagala
writes off loans that have been in arrears for more than 6 months.”
LRA
said the company’s performance has been consistently better
than the industry’s, mainly due to its well-managed interest
margins and the cost efficiencies gained through its automated lending
system, on top of staff productivity and careful branch expansion.
LRA
is a 100%-owned subsidiary of RAM, Malaysia’s premier rating
agency. RAM is also an affiliate of Standard & Poor’s,
the world’s largest rating agency.
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