The long-term rating has a stable outlook. The ratings are premised on the strong credit quality of the Company's loan portfolio and its healthy capitalisation.
The ratings are also supported by SFSL's well-known name, primarily underscored by its sister company, Swarnamahal Jewellers (Pvt) Ltd. Nevertheless, the ratings are constrained by SFSL's small size, as well as the Company's short track records on profitability and improved corporate governance under its new management team.
Incorporated in 2004, SFSL is part of the EAP Group of Companies a well-established, diversified family business with interests that include entertainment, jewellery, leisure and finance.
However, the Company is a relatively small registered finance company accounting for only 1.53 percent of the industry's assets as at end-September 2010.
Historically, SFSL has faced regulatory pressure due to related-party transactions; meanwhile performance had been in the red.
Notably, the company underwent a major management restructuring in 2009, following which it has turned around while strengthening its corporategovernance framework.
source - www.dailynews.lk
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