Big Bank

Oct 20, 2007 (LBO) – Fitch Ratings Lanka has affirmed the National Long-term rating and Individual Rating of Bank of Ceylon (BOC) at 'AA(lka)' and 'D/E' respectively. It said in a statement the affirmation reflected "the bank's systemic importance as the largest bank in Sri Lanka with 18.2% of the banking system assets, its relatively stable financial profile, and state ownership."

The Outlook on the rating remains Stable.

Bank of Ceylon is the main commercial banker to the government, and one of the two commercial bankers to state-owned enterprises, extending direct credit, trade finance facilities and foreign currency funding through its large deposit base and cross-border borrowings.

The bank's loan book grew well above the banking system at a rate of 32.1 percent between FYE05 and FYE06, and at an annualised rate of 38.1 percent between FYE06 and H107, Fitch said.

"This enabled the bank's non-performing loans (NPL)/gross loans ratio to improve sharply to 5.7 percent at H107 from 6.7 percent at FYE06 and 7.8 percent at FYE05."

Despite an increase in absolute NPLs, as well as the high NPL ratio for non-state sector exposures at 12.3 percen