Fitch Ratings Lanka Ltd (FRL) assigns BB+ (sri) (double B plus) national rating for the Implied Long-term unsecured Senior Debt of Pan Asia Banking Corporation Ltd. (PABC). Fitch Ratings Lanka Ltd (FRL) assigns BB+ (sri) (double B plus) national rating for the Implied Long-term unsecured Senior Debt of Pan Asia Banking Corporation Ltd. (PABC). BB+ (sri) rating indicates that there is a possibility of credit risk developing, particularly as a result of adverse economic change over time; however, business or financial alternatives may be available to allow financial commitments to be met.
PABC’s rating reflects the restructuring measures initiated by its new management since late 2001 to improve operations and internal processes.
These measures have somewhat restored depositor confidence, which resulted in total deposits growing 84% from Dec 2001 to Sep 2004.
PABC reported an audited net profit of Rs 30 Mn for the nine months ended Sep 2004, and is expected to maintain a positive bottom line over the coming periods as well.
However underlying profitability as measured in terms of ROA would be weighed down by the high cost structure. PABC cost/income ratio was 74%
