High Rating

Aug 22, 2011 (LBO ) - Sri Lanka's Commercial Bank of Ceylon has been rated 'AA+' by Ram Rating Lanka with a stable outlook, which the rating agency said was systemically important as the country's largest private lender. "The ratings also reflect its strong franchise, healthy financial performance, funding, liquidity and capitalisation levels, as well as its adequate asset quality," RAM said.

"Furthermore, the fact that the Government of Sri Lanka held a stake of 14.19 percent in the Bank through state-owned entities as at end-December 2010, increases the likelihood of support in times of need."

The bank's asset quality was 'adequate' and absolute gross non-performing loans have been improving with curtailed lending to high risk segments.

But RAM said there was high personal and retail loans with the portfolio growing to 23.18 billion rupees, up 108 percent from a year earlier.

Its cost-to-income ratio was the best among its peers which have allowed strong return on assets, which improved to 3.11 percent in first quarter of 2011 from 2.68 percent in 2010 and 2.36 percent in 2009.

The full rating statement is reproduced below:

RAM Ratings Lanka has assigned the respective long- and short-te