Small Lender

Aug 25, 2010 (LBO) - Sri Lanka's Sanasa Development Bank (SDB), a small lender from the co-operative movement, has retained its 'BBB' local long term rating with a stable outlook, RAM Ratings Lanka said. "Despite its high-risk target market, SDB has been able to maintain its better-than-industry asset quality, supported by its stringent credit evaluation and monitoring."

SDB’s gross non-performing-loans (NPL) ratio had dipped marginally to 6.59 percent by end December 2009 which was better than the industry average of 10.38 percent.

The gross NPL ratio had fallen further to 5.50 percent as at end-March 2010.

RAM Ratings Lanka said SDB has moderate funding and liquidity positions.

"We are concerned about the widening gap in the Bank’s asset-liability maturity mismatch (ALMM) in the less than 1 year bucket, which accounted for 21.10 percent of its interest earning assets as at end-FY Dec 2009," the rating agency said.

"However, this is partially alleviated by SDB’s healthy renewal rates¦"

The bank also had 300 million rupees of unutilised funding lines. The Bank’s statutory liquid-asset ratio stood at 25.27 percent as at December 2009.

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