Going Well

Sri Lankan President Maithripala Sirisena (L) and Sri Lankan Prime Minister Ranil Wickremasinghe gesture as Sri Lankan Finance Minister Ravi Karunanayake (unseen) presents a supplementary budget to parliament, marking the first economic policy statement of the new government which came to power earlier in the month in Colombo on January 29, 2015. Sri Lanka's new government announced hefty taxes on top companies in a bid to raise revenue, accusing the previous regime of fudging the figures and leaving the economy in a "sad state". AFP PHOTO / Ishara S. KODIKARA (Photo credit should read Ishara S.KODIKARA/AFP/Getty Images)

Sept 27, 2007 (LBO) – Fitch Ratings Lanka which confirmed the AAA (lka) national rating of Citibank’s Sri Lanka branch said its interest margins were boosted by dollar financing of the island’s government. In the first half of the year net interest margins and forex gains had allowed pretax profits to improve to 2.7 percent on an annualized basis in the first half 0f 2007.

This was partly because of high yielding Sri Lanka government dollar bonds which amounted to 8.7 percent of its assets in the first half of 2007. The money was raised from sister branches of the group, Fitch said.

In corporate banking, margins were thin.

The bank’s net interest margins were healthy and rose to 4.7 percent in first half from 4.3 percent in 2006 and 3.4 percent in 2005, Fitch said.

Citibank Sri Lanka (CITISL) is a branch of Citibank N.A. Citibank’s foreign currency rating is AA+ with a Stable Outlook which is higher than Sri Lanka’s sovereign rating of BB- with a negative outlook.

Fitch said Citi’s Sri Lanka loan book contracted 21.2 percent during 2005/2006 but has grown 39.3 percent by the first half of 2007.

This is an effective increase of 10.4 percent from the financial year 2005.