PABC, is a small licensed commercial bank established in 1995, and is 35.3 percent owned by Mr. K.D.D. Perera and related parties. It operates through a branch network of 35.
The rating is constrained by the bank's weak asset quality and consequently high non-performing loans / equity ratio, Fitch said in a statement.
Although capital adequacy ratios of Pan Asia are strong, the bank is yet to meet the 2.5 billion rupee minimum capital requirement that all licensed commercial banks have to show by June 2010.
Pan Asia operates in the small and medium enterprise segment but has also been growing its corporate loan book, which amounted to 10 percent of loans as at September 2009 compared to about 5 percent at the end of the financial year 2005.
The loan book contracted 11 percent in the nine months ending September 2009 due to the repayment of a few large facilities and the bank taking a cautious approach to loan growth amid the prevailing credit environment.
Asset quality weakened conside