Alliance Finance preserves credit rating | Sunday Observer

Alliance Finance preserves credit rating

Alliance Finance Company PLC (AFC) has preserved its investment grade credit rating of BBB- from ICRA Lanka Limited (ICRA)- despite the extremely challenging macroeconomic conditions.

ICRA reaffirmed the credit rating of BBB- given by AFC - in its latest rating review published on October 31, 2018. However, the rating outlook was revised to ‘negative’ given the increase in non-performing loans due to adverse economic conditions and erratic weather patterns in the recent past, which has resulted in the banking and finance sector experiencing a steep increase in non-performing loans this year. AFC has diversified funding sources with equity, deposits, bank borrowings and foreign funding from global development financial institutions with a significantly lower dependence on public deposits.

The foreign lenders of AFC include the private sector lending arm of the World Bank Group – International Finance Corporation (IFC), Netherland based Tridos Bank, Switzerland based Symbiotics SA and US based Developing World Markets (DWM) while a few more funding lines are in the pipeline from several European countries.