Confirmed Credit

April 24, 2008 (LBO) – Sri Lanka’s Fitch Ratings has confirmed Commercial Bank of Ceylon’s ‘AA+(lka)’ rating with a stable outlook, citing the bank’s good profitability, asset quality, strong solvency, high capitalization and its standing among local banks. Fitch also confirmed the banks ‘individual rating at ‘D’ and support rating at ‘5’. The ‘AA(lka)’ rating of its subordinated debentures and the ‘AA-(lka)’ rating of its preference shares was also confirmed.

In the first half of 2007 Commercial Bank had raised 5.74 billion rupees through a rights issue and increased its equity to assets ratio to 8.7 percent from 6.7 percent.

The total capital adequacy ratio rose to 13.71 percent from 11.58 percent.

“Fitch believes that the capital raised may be deployed for regional business expansion or to grow the existing Bangladesh operations where the bank has established a strong position among foreign banks,” the rating agency said.

Commercial Bank’s Bangladesh unit brought 12 percent in profits and had 7.0 percent of total assets at the end of the 2007 financial year.

Up to now Commercial Bank’s portfolio was split evenly among corporate and consumer markets.

“Though CB has traditionally been a dominant player in the corporate banki