Oct 31, 2013 (LBO) – Fitch Ratings has confirmed a ‘BBB(lka)’ investment grade rating of Sri Lanka’s Pan Asia Bank but has lowered the outlook to ‘stable’ from ‘positive’. PABC accounted for 1.5% of banking sector assets in Sri Lanka at end-2012 and operated through a network of 73 branches.
Fitch said there was an unanticipated rapid deterioration of its credit profile with unprovided non-performing loans pressuring its capitalization.
“These negative developments are offset by Fitch’s expectation for a slowdown in loans growth, sufficient internal revenue generation to meet capital requirements and PABC’s acceptable funding profile,” the rating agency said.
PABC’s NPL ratio has risen to 11.8 percent in the first half of 2013 (regulatory NPLs of 7.8 percent) from 7.4 percent in 2012 with gold-backed loans defaults making up 65 percent of the increase.
The full statement is reproduced below:-
Fitch Revises Pan Asia Bank’s Outlook to Stable; Affirms at ‘BBB(lka)’
Fitch Ratings-Colombo/Singapore-30 October 2013: Fitch Ratings Lanka has revised Pan Asia Banking Corporation PLC’s (PABC) Rating Outlook to Stable from Positive and affirmed