Aug 03, 2010 (LBO) – Fitch Ratings Lanka said it has confirmed National Development Bank’s (NDB) National Long-term rating at ‘AA(lka)’ with a stable outlook. The agency has also confirmed NDB’s subordinated debentures at ‘AA-(lka)’.
“The ratings reflect NDB’s strong financial profile relative to its peers,” a statement said.
“The ratings are however constrained by NDB’s less diversified loan portfolio and modest deposit base compared to peers – an inherent function of its relatively shorter operating history as a licensed commercial bank (LCB).”
NDB’s loan book contracted by one percent in FY09 compared with a growth of 9.1 percent in FY08, although the growth increased to 3.7 percent in the first quarter of the 2010 financial year, and is likely to increase further in the second half, Fitch said.
Fitch said it expects growth to be spurred by the project loan segment, with the customer base expected to encompass a greater share of the small and medium enterprise (SME) sector as peace dividends are felt by the wider economy.
The island’s 30-year ethnic war ended in May 2009.
NDB’s gross non-performing loan (NPL) ratio was the lo