The principal factor supporting the rating of DFCC Vardhana Bank (DVB) is the strong implied support assumed to be available from its parent, DFCC Bank, Fitch Ratings Lanka said in a statement.
In addition to its 95.2 percent shareholding and the use of a common franchise, the operations of DVB are closely integrated with that of DFCC.
Hence, Fitch is of the view that DVB will continue to enjoy a high degree of business and financial support from its parent, DFCC.
Parent company DFCC Bank, rated ˜AA(lka)’ by Fitch, is a licensed specialized bank involved in providing long term project finance.
The company bought up DFCC Vardhana Bank, formerly National Mercantile Bank Limited in 2003, which reported a net loss of 157 million rupees and a negative net worth of 98 million rupees in 2002.
DFCC’s involvement turned around operations of Vardhana Bank, with continued focus on loan growth and healthy margins from its target mid-market customer segment to post a positive n