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| Sunday, 16 March 2003 |
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Business |  |
| News Business Features Editorial
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Citibank, Sri Lanka receives Triple A rating by Elmo Leonard The Citibank, NA branch in Sri Lanka has received the SL 'AAA' rating, the highest local rating for the lowest expectancy of credit risk among banks operating in the country. The rating was given by Fitch Ratings Lanka (FRL). The 'Triple A' rating is accorded only for strong capacity to meet financial commitments that can be paid in full and on time, CEO Fitch Ratings Lanka Ravi Abeysuriya said. FRL is a joint venture between Fitch Ratings Inc, International Finance Corporation Washington, Central Bank of Sri Lanka and other leading local financial institutions. Fitch Ratings Inc is one of the three internationally accredited rating agencies and has rated over 70 sovereign nations and 2,300 international banks and financial institutions, Abeysuriya said. Citibank, NA commenced operations in Sri Lanka in 1979 as a full service branch of Citibank, NA New York. It has now expanded and provides a range of banking services to individuals and the business community, a media conference was told. Citibank had introduced its latest electronic banking and payment products and systems to the local market, the bank's Country Head in Sri Lanka, Kapila Jayawardena said. The branch has also been closely involved in upgrading and training the local financial services community over the years. The bank has been aggressively expanding its asset base and profitability in Sri Lanka. Presently, its asset base exceeds US$ 150 million, while profit after tax has recorded a 94 per cent growth over the past two years. Capital and reserves of Citibank Sri Lanka exceed US$ 15 million, Jayawardena said. The bank has shown resilience to negative environmental effects, which makes it one of the most sound financial entities in Sri Lanka, it was claimed. Abeysuriya explained that the SL 'AAA' rating offered the highest safety of timely payments of interest and principal. The rating gives investors a ranking on parity with other rated investment instruments in the market. The Government, in the 2003 budget, announced that credit rating and publication of such rating would be made mandatory for all deposit taking institutions and all debt issues over Rs 100 million, so that the public could be aware of the risk of their investments. Credit ratings, besides ensuring a higher degree of market discipline on financial institutions, would also help bring down the lending rates through disintermediation. Answering questions, Jayawardena claimed that some of the better known approved finance companies in Sri Lanka could come under the 'good credit quality' category. Another benefit of rating is that there is a lower cost of funding as debt instruments can be sold directly to investors. The need to guarantee investments through financial institutions only applies if long and short-term ratings are speculative grade. Ratings also help savers and investors understand the true risk of any fixed income investment prior to investing their hard-earned money, Jayawardena said. |
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