Sept 15, 2012 (LBO) – Fitch Ratings has confirmed an ‘AAA(lka)’ rating of the Sri Lanka branch of Citibank with a stable outlook, saying it is strongly capitalized and had support would be available from the parent unit. The bank had no bad loans but had a 44 percent concentration on the appare sector.
The full statement is reproduced below
Fitch Affirms Citibank N.A. – Colombo Branch at ‘AAA(lka)’/Stable
Fitch Ratings-Singapore/Colombo-14 September 2012: Fitch Ratings Lanka has affirmed Citibank N.A. – Colombo Branch’s (CitiSL) National Long-Term rating at ‘AAA(lka)’. The Outlook is Stable.
CitiSL’s rating reflects the financial strength of Citibank N.A.’s (Citibank) given that CitiSL is a branch and part of the same legal entity as Citibank. Citibank is rated at ‘A’/Stable, which is higher than the sovereign’s Issuer Default Rating of ‘BB-‘/Stable Outlook. Fitch believes that support from the head office would be forthcoming if required, subject to any regulatory constraints on remitting money into Sri Lanka.
CitiSL’s capitalisation has historically remained strong, with equity to assets and tier 1 capital ratios at 32% and 23.4% respectively at end-June 2012 (2011: 30%, 33.7%)