Improvements in profitability, asset quality, ROA and track record major contributors for upgrade ICRA Lanka Limited, a Group Company of Moody’s Investor Services has upgraded the credit rating of LOLC (Lanka ORIX Leasing Company PLC) and its financial services subsidiaries LOLC Finance PLC (LOFC) and Commercial Leasing & Finance PLC (CLC) to [SL] A with stable outlook from [SL] A- with stable outlook.The ratings continue to factor LOLC Group’s long track record in the retail finance sector, its leadership position in the Sri Lankan retail finance market, professional and experienced management team and adequate risk management systems with strong retail franchise.“ICRA Lanka’s assessment to revise the ratings follows the improvement in the asset quality and profitability indicators of LOLC over the last 12-18 months. The group GNPAs improved to 2.8% as in March 2015 as compared to 4.9% in March 2014 and the consolidated Return on Assets (RoA) improved to 3.1% for FYE2015 as compared to 1.9% in FYE2014.”Along with the upgrade of the credit rating of the company, ICRA Lanka has upgraded the credit rating of the LKR 5,000 Mn Long Term Senior Unsecured Redeemable Debenture program and LKR 750 Mn Long Term Unsecured Redeemable Debenture program to [SL]A (pronounced SL A) with stable outlook from [SL]A- (pronounced SL A minus) with stable outlook.The Group Managing Director, Mr. Kapila Jayawardena stated that the upgrade of LOLC’s credit rating reflects the trust and confidence placed on the group by the public as a premier financial services provider in the country. With a wide array of product offerings ranging from microfinance, leasing working capital finance and Islamic finance the LOLC Group is in the forefront of providing access to finance. LOLC Finance PLC has the largest deposit base among non-bank financial institutions and LOFC and Commercial Leasing and Finance uses cutting edge technological innovation to enhance customer experience being the only non-bank financial institutions allowing real time digital fund transferring using CEFTS. Further, both LOFC and CLC provides internet and mobile digital financial facilities on SLIPS (Sri Lanka Interbank Payment System) and CEFTS.The Group provides general insurance including motor, marine, fire & engineering and casualty as well as life insurance.The upgrade of the credit rating of LOLC Finance PLC continues to factor the company’s robust franchise, healthy competitive position given its superior market share and its professional and experienced management team. ICRA Lanka has taken note of the improvements in LOFC’s Asset-Liability Maturity (ALM) profile in terms of moderation in shorter term ALM gaps and improvement in the overall profitability levels.Further, ICRA has taken into consideration the improved capital adequacy position of LOFC. Core Capital which stood at 13.08% as in Mar-14 has improved to 13.11% as in Mar-15, recording an improvement mainly due to healthy accretion to reserves and total Capital which stood at 13.08% as on Mar-14 has increased to 18.12%, following the subordinated debentures issued by the company during the period.Along with the upgrade of the credit rating of LOFC, ICRA Lanka has upgraded the credit rating of the LKR 5,000 Mn Listed Subordinated Unsecured Redeemable Debentures to [SL]A- (pronounced SL A minus) with stable outlook from [SL]BBB+ (pronounced SL triple B plus) with stable outlook.The upgrade of the credit rating of Commercial Leasing & Finance PLC factors the demonstrated track record of operating profitably in the retail finance segment, its well established franchise combined with a professional and experienced management team, improvement in profitability indicators, comfortable liquidity and its adequate capitalization levels.Along with the upgrade of the credit rating of CLC, ICRA Lanka has upgraded the credit rating of the LKR 5,000 Mn Listed Senior Unsecured Redeemable Debentures to [SL]A (pronounced SL A) with stable outlook from [SL]A- (pronounced SL A minus) with stable outlook.