Doing Ok

CEAT Kelani Holdings Managing Director Ravi Dadlani (right) and Lanka Ashok Leyland CEO Umesh Gautham exchange the OEM agreement

Sept 07, 2007 (LBO) – Fitch Rating Lanka has confirmed the ‘AA(lka)’ national long-term rating of DFCC Bank, the ‘AA(lka)’ rating of its senior debentures and the ‘AA-(lka)’ rating of its subordinated debentures. The bank’s major shareholders include entities related to the Stassens Group which hold 30.7 percent of its equity and Bank of Ceylon, which holds 14.7 percent of its equity. The outlook on the ratings was stable.

“DFCC’s ratings reflect its strong financial performance, good asset quality and strong capital position,” Fitch said.

“The ratings also take into account the bank’s high exposure to riskier long-term project lending and less diversified funding base.”

DFCC’s profitability measured by return on assets remained strong at 2.6 percent by the end of the 2007 financial year. The contribution from its 29 percent-owned associate, Commercial Bank of Ceylon Ltd rated ‘AA+(lka)’, was substantial 21 percent of net profit.

The contribution from other entities and its 95 percent-owned subsidiary DFCC Vardhana Bank Ltd rated AA-(lka) was 7 percent.

The Central Bank of Sri Lanka has asked DFCC to trim its voting rights to 15 percent in Commercial Bank by 2008 and in Vardhana Bank by

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