Fitch rates Mercantile Investments, debt BBB-(lka)

Fitch Ratings Lanka said it assigned Mercantile Investments and Finance plc a national long-term rating of BBB-(lka).

The outlook is stable.

The agency also assigned the company's outstanding senior unsecured debentures a national long-term rating of BBB-(lka).

Fitch said the rating reflects Mercantile Investments’ modest franchise stemming from its long operating history, satisfactory capitalization and loan-book exposure to less risky customer segments relative to peers.

However, the ratings also capture its high-risk appetite, which is evident in its substantial exposure to equity investments, low profitability metrics relative to peers and greater reliance on concentrated and short-term funding, the agency said.

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