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Upgraded

Feb 01, 2011 (LBO) - Sri Lanka's People's Leasing Finance (PLF), a unit of Peoples Leasing Company by one notch to 'BBB(lka)' with a stable outlook, on expected support from its 'A(lka)' parent which owns 93 percent of the firm.
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Fitch said support from the parent was now "more likely" than in the past as the parent's stand-alone financial strength has improved over the past year.

PLC also channels Islamic lending products via PLF, broadening the group's lending portfolio.

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The ratings could be upgraded if there is a greater operational integration between PLC and PLF, or an increase in PLF's strategic importance to the PLC group -- measured by the proportion of deposit-funded group-assets -- while maintaining healthy asset quality and profitability, Fitch said.


A weakening of PLC's stand-alone financial position, or a perceived waning of PLF's strategic importance to PLC, could result in a downgrade of PLF's rating.

PLF's gross advances had grown 68 percent in the six months ended September 2010, driven by renewed marketing efforts amid improving economic activity.

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By September PLF's advances consisted of lease and hire purchase contracts (76 percent) and sundry loans (24 percent), which are predominant

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