May 24, 2010 (LBO) – Fitch Ratings Lanka has upgraded the ratings of two regional development banks (RDBs) and confirmed those of four others as their financial health improved or remained stable, it said in a statement. The rating on Kandurata Development Bank (KDB) was upgraded to ‘BBB+(lka)’ from ‘BBB(lka)’; and outlook revised to stable, and that on Sabaragamuwa Development Bank (SDB) upgraded to ‘BBB(lka)’ from ‘BBB-(lka)’ with a positive outlook.
“KDB’s and SDB’s ratings were upgraded due to sustained improvements in their financial profiles,” Fitch said.
“Both KDB and SDB over the last five years (2005-2009) have progressively reduced their Non-Performing Loan to gross loan figures while having good profitability.”
Sustained improvements on asset quality and capitalization reduced net NPL/equity ratios to 9.5 percent in the 2009 financial year for KDB and to 16.6 percent for SDB.
Fitch also confirmed the ratings on Rajarata Development Bank (RaDB) at ‘BBB+(lka)’ with a stable outlook, Ruhuna Development Bank (RuDB) at ‘BBB+(lka)’ with a stable outlook, Wayamba Development Bank (WDB) at ‘BBB+(lka)’ with a stable outlook, and Uva Development Bank (UDB) at ‘BBB(lka)’ with a positive outlook.