Fitch Ratings affirmed People's Leasing Finance PLC's (PF) National Long-term rating at 'BBB-(lka)', driven by the expectation that support will be forthcoming from its parent Peoples Leasing Company Ltd should the need arise.

An announcement this week from Fitch stated that PFs registered finance company license enables its parent, a specialized leasing company, to diversify its funding channels and reduce funding costs through the acquisition of public deposits, which underscores PF's importance to the PL group. As at 30 November 2009, PF's deposits funded 5% of PL's consolidated assets.

The Ceylinco consolidated group, which owned PF (formerly Seylan Merchant Leasing PLC) until PL's acquisition in June 2009, faced severe liquidity stress in early 2009 due to a deposit run on an unregulated entity within the Ceylinco group towards end-2008.

The press release stated that the resultant crisis of confidence permeated into the wider registered finance company sector, which caused PF's customer deposits to contract by 13% in Q109. However, the contraction eased in Q209 (to 6%) supported by PL's takeover and subsequent effort in re-branding; thereafter, PF's deposits grew by 11% in H209.