Fitch affirms Sri Lanka’s Pan Asia Bank’s National Long-term Rating at ‘BBB-(lka)’

Fitch Ratings Lanka has affirmed Pan Asia Banking Corporation PLC’s (PABC) National Long-term rating at ‘BBB-(lka)’. The agency has also affirmed PABC’s proposed subordinated debenture issue of up to LKR150m (which was to take place in 2008) at ‘BB+(lka)’, and simultaneously withdrawn the rating. The Outlook is Stable.
PABC’s rating is constrained by its weak asset quality and consequently high net NPLs/equity ratio. Fitch further notes that although capital adequacy ratios of the bank remain strong, PABC has yet to meet the LKR2.5bn minimum capital requirement imposed on all licensed commercial banks by the regulator-the deadline for which has now been extended to June 2010.

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