National Long-Term Rating is driven by its intrinsic credit strength. It balances a superior franchise and funding profile against weaker asset quality, profitability and capitalisation and higher risk appetite relative to similarly rated private-bank peers.
“Fitch expects PB’s tight capital and liquidity positions, which are close to the regulatory minimums, to constrain further aggressive loan book expansion for the near to medium term. PB’s gross loan book already expanded 21.5% in 2020 and 10.1% in 1Q21, with a major share of that lending being to the state and state-owned entities (SOEs).”
This resulted in PB’s exposure to the Government of Sri Lanka and SOEs accounting for nearly half its loan book at end-1Q21 from 38% at end-2019, indicating high concentration risk and PB’s dependency on the state’s financial profile.
Fitch affirms Bank of Ceylon at ‘CCC’ and ‘AA- (lka)/Stable
Fitch Ratings has affirmed Bank of Ceylon’s (BOC) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) at ‘CCC’.
The ratings do not carry an Outlook because of the potentially high volatility at this rating level, in line with Fitch’s rating definitions. BOC’s National Long-Term Rating has also been affirmed at ‘AA -(lka)’. The Outlook is Stable. At the same time, Fitch has affirmed BOC’s Viability Rating at ‘ccc’, Support Rating at ‘5’ and Support Rating Floor at ‘NF’ (No Floor).