Citibank keeps its Triple A status.

Citibank N.A’s Sri Lankan unit has kept its AAA (sri) membership during a recent annual review conducted by Fitch Ratings Lanka. Citibank N.A’s Sri Lankan unit has kept its AAA (sri) membership during a recent annual review conducted by Fitch Ratings Lanka. The Triple A rating for Citibank’s unsecured senior debt reflects a very low expectation of credit risk. The rating indicates a very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.

Being the only foreign commercial bank that opted to rate its Sri Lankan arm, Citibank’s Triple A status rides on the back of its parent — Citigroup Inc.

“Given that the domestic entity is a branch, uses the ‘Citibank’ name and is operationally enmeshed with the groups global operations, we believe that Citigroup’s support would be available under most conceivable circumstances, should it be so required,” explains Fitch in a statement on Monday.

The local branch’s financial profile is very strong, backed by high profitability, good asset quality, and competent management.

The Bank’s net income rose 33 percent in 2003, while return on assets was a healthy 3.49 percent, which is high in comparison to the larger domestic banks as well as the branches of other foreign banks in Sri Lanka.

Over the past 10 years, the local arm has also maintained an impeccable credit history and currently carries zero non-performing loans. The Bank is well capitalised with a reported capital adequacy ratio of 17.4 percent as at Dec 2003.

Citibank N.A. set foot to Sri Lanka in 1979, and has historically focussed on servicing trade finance facilities to a selected clientele.

With a single branch, Citibank Sri Lanka has aggressively grown its portfolio since 1999 and presently accounts for a third in terms of assets among the foreign bank branches operating in Sri Lanka.

Fitch Ratings Lanka Ltd is a joint venture between Fitch Ratings, Inc, International Finance Corporation Washington, Central Bank of Sri Lanka and several other leading local financial institutions. Fitch Ratings Inc is one of the three internationally accredited rating agencies and rates over 70 sovereign nations, 2300 international banks and financial institutions.

-LBO Newsdesk: LBOEmail@vanguardlanka.com