Fitch: Three leasing issuers more resilient

Fitch Ratings said in a report that the underlying risks of Sri Lanka's specialized leasing company sector have increased in light of the highly inflationary and rising interest rate environment that has prevailed since the end of 2006.

Fitch noted that the three large leasing companies that it rates - Lanka Orix Leasing Co. plc (A(lka)/stable), People's Leasing Co. Ltd. (A-(lka)/stable) and Commercial Leasing Co. plc (A-(lka)/stable), which accounted for 56% of the sector at end-2007 - are relatively more resilient to a continued deterioration in macro economic conditions, given their stronger risk management controls and systems and better access to liquidity lines from commercial banks.

However, Fitch said it believes that the underlying risk profile could deteriorate disproportionately for the 17 smaller companies that make up the remaining 44% of the sector.

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