June 26, 2007 (LBO) – Sampath Bank is raising 1.5 billion rupees through an unsecured debenture which Fitch has rated AA- (lka), but the rating agency says more capital may be needed to maintain its loan growth rate in to the medium term. It has two associates, a Bangladesh-based non-bank financial institution LankaBangala Finance Ltd (22.86 percent stake) and the Union Bank of Colombo Ltd (24.06 percent stake). Sampath’s loan book grew at 28.6 percent in the 2006 financial year, on par with national banking sector average, and showed a five year compounded annual growth rate of 25.9 percent between 2003 and 06, Fitch said.
Loan growth in 2006 was driven by retail loans (162.9 percent), leasing (92.6 percent) and residential housing loans (74.5 percent).
Fitch Ratings Lanka gave a national rating of ‘A+ (lka)’ to Sampath Bank’s 2007/2012 1.5 billion rupee unsecured subordinated redeemable debentures and confirmed its long-term rating of ‘AA- (lka)’.
It also confirmed an ‘A+(lka)’ National ratings given to Samapth’s 2004/09 and 2006/2011 subordinated debentures. The outlook on the ratings was ‘Stable’.
“The ratings reflect the bank’s consistent profitability, stable asset quality and relatively good solvency,” Fitch sai