Aug 29, 2009 (LBO) – Sri Lanka’s Citibank, which had reported around 22 billion rupees of bad loans following a defaulted derivative sold to a state-run oil distributor, has taken the number off its balance sheet in the June 2009 accounts. In March 2008, the bank reported 22.6 billion rupees classified as ‘other loans’ among non-performing loans and gross assets of 49.7 billion rupees.
In June gross assets plummeted to 24.8 billion rupees. Total non-performing loans were reported as 85.7 million rupees.
Compared to December 2008, gross loans were down to 10.6 billion from 37.4 billion rupees.
A Citi Colombo official contacted by LBO did not respond to a query on the reason for the change in accounting treatment. The accounts published in a local newspaper also did not offer an explanation for the change.
Sri Lanka’s state run Peoples’ Bank has also kept its oil derivative losses off its books. Commercial Bank which made provisions for derivative losses up to December 2008, also changed tack in 2009.
Standard Chartered and Deutsche Bank units also ended up with unpaid oil derivative deals with Ceylon Petroleum Corporation. Some of the disputed transactions are now under arbitration.
Meanwhile Citibank’s profi