Commercial Bank rated strongest bank in Sri Lanka by Fitch

Thursday, 23 July 2015 00:00 - - {{hitsCtrl.values.hits}}

The National Long-Term Rating of Commercial Bank of Ceylon PLC has been affirmed at ‘AA(lka); Stable Outlook’ by Fitch Ratings Lanka (FRL).

Commercial Bank’s Basel II compliant outstanding subordinated debentures have been affirmed by Fitch at ‘AA-(lka)’.

In a recent report, the agency said: “Fitch considers Commercial Bank as the strongest bank in this peer group. Its rating captures its more measured risk appetite, solid franchise, sound track record, and strong funding profile. The bank’s provision coverage has been improving and asset quality has remained satisfactory. The ratings reflect our expectation that its operations in Bangladesh will remain small.”

“Sustained improvements in Commercial Bank’s asset quality and enhanced resilience against a volatile operating environment could be positive for the rating,” Fitch said.

The agency said the ratings could be downgraded if the Bank’s ability to withstand cyclical asset quality deterioration declines due to lower earnings and capitalisation. “In addition, any marked weakening in its deposit franchise and a deviation from its measured risk appetite, both viewed by Fitch as key factors that differentiate Commercial from its lower-rated peers, would be negative,” Fitch said.

Commenting on the latest Fitch rating, Commercial Bank’s Managing Director/CEO Jegan Durairatnam said: “We are pleased to be rated ‘AA’ by Fitch and to be acknowledged as the strongest bank among our peers. This speaks volumes of the capital strength, consistent performance, dedication to quality and long term vision of the Bank. Independent of Fitch, our operation in Bangladesh has also received the highest rating of ‘AAA’ given to financial institutions in that country, and this will further strengthen investor confidence.”

Commercial Bank operates a network of 243 branches and 613 ATMs in Sri Lanka and is the country’s largest private bank. Ranked the most valuable private sector brand in the country in 2014, the bank was adjudged the Best Bank in Sri Lanka by FinanceAsia in 2015. Commercial Bank has also won multiple awards as Sri Lanka’s best bank from other international publications over several years.