Fitch Ratings Lanka has today affirmed Alliance Finance Company’s National Long-Term Rating at ‘BB+(lka)’ with a Stable Outlook.
At the same time Fitch affirmed AFC’s outstanding senior unsecured debentures at ‘BB+(lka)’ and outstanding subordinated debentures at ‘BB(lka)’. AFC’s rating reflects its established but modest franchise and weaker capitalisation given its growth track record. This is balanced against recent improvements in risk controls. Execution of management’s strategic plan to expand its loan book and adherence to sustainable growth targets underpin the Stable Outlook, and meaningful deviation from the plan may place downward pressure on AFC’s ratings.
Fitch expects AFC to expand at a pace commensurate with its current capitalisation levels over the medium term, led by growth in vehicle financing and other term loans. Consequently, Fitch expects AFC’s capital ratios to remain at current levels, with capital being supported by gains from planned asset disposals and a planned Rs 72 m rights issue.
At the same time Fitch affirmed AFC’s outstanding senior unsecured debentures at ‘BB+(lka)’ and outstanding subordinated debentures at ‘BB(lka)’. AFC’s rating reflects its established but modest franchise and weaker capitalisation given its growth track record. This is balanced against recent improvements in risk controls. Execution of management’s strategic plan to expand its loan book and adherence to sustainable growth targets underpin the Stable Outlook, and meaningful deviation from the plan may place downward pressure on AFC’s ratings.
Fitch expects AFC to expand at a pace commensurate with its current capitalisation levels over the medium term, led by growth in vehicle financing and other term loans. Consequently, Fitch expects AFC’s capital ratios to remain at current levels, with capital being supported by gains from planned asset disposals and a planned Rs 72 m rights issue.
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