Rating Trend

Dec 11, 2009 (LBO) – Fitch Ratings Lanka confirmed the long-term rating of BB+(lka) and a stable outlook for Trade Finance and Investments (TFI) Limited, a firm specializing in three wheeler vehicle finance. Provision coverage for NPLs was 21 percent at end of the first half 2010 on account of 75 percent of NPLs falling in the three to six month in arrears bracket, for which regulatory provisioning is not required.

The company’s net NPL to equity ratio was good at 14 percent at end he first half 2010, which was significantly better than the sector average.

Funding is predominantly from equity, deposits and loans from shareholders and related parties.

Internal capital generation was robust, in light of good profitability and the high earnings retention policy.

Trade Finance and Investments is a finance company established in 1978 with an asset base of 519 million rupees as at end of the first half 2010.

Owners of Sri Lanka's Jetwing group, the Cooray family, bought TFI in the early 1990s and currently hold around 93 percent.

The rating considers the company's high capitalisation in terms of the size of its operations and its profitability, Fitch said.

The rating is co