Fitch Ratings Lanka has affirmed Bimputh Finance PLC’s National Long-Term Rating at ‘BB(lka)’. The Outlook is Stable.
Bimputh’s rating reflects its small franchise compared with higher-rated peers and high-risk appetite stemming from its microfinance-dominated loan portfolio, which Fitch sees as risky due to the segment’s greater susceptibility to economic cycles. Fitch’s assessment also captures likely pressure on Bimputh’s capitalisation from high loan growth, which is forecast by management’s guidance, and limited funding diversity due to a heavy reliance on borrowings.
Fitch believes aggressive loan growth would pressure Bimputh’s capitalisation in the absence of any meaningful capital infusions.
The company’s Fitch Core Capital ratio remained flat at 16.5% as at end-March 2017 and Fitch believes Bimputh would depend on its 94% owner, Daya Group, for capital infusions.
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