Solid Franchise

Aug 02, 2011 (LBO) – Fitch Ratings Lanka has confirmed Commercial Bank’s (CB) national long-term rating at ‘AA(lka)’ with a stable outlook and also confirmed its subordinated debentures at ‘AA-(lka)’.

“CB’s ratings reflect its solid domestic franchise, sound profitability and its strong capital position,” a statement said.

Fitch noted that the bank has arrested the decline in its asset quality resulting in a marked improvement in its gross non-performing loans (NPL) and net NPL/ equity ratios.

“However, a reversal of asset quality trends or a deterioration in capitalisation could exert pressure on CB’s ratings,” it warned.

The full statement follows:

Fitch Ratings Lanka has affirmed Commercial Bank of Ceylon PLC’s (CB) National Long-Term rating at ‘AA(lka)’ with a Stable Outlook. The agency has also affirmed CB’s subordinated debentures at ‘AA-(lka)’.

CB’s ratings reflect its solid domestic franchise, sound profitability and its strong capital position. Fitch notes that the bank has arrested the decline in its asset quality resulting in a marked improvement in its gross non-performing loans (NPL) and net NPL/ equity ratios. However, a reversal of asset quality trends