DFCC Bank rated AA- with Stable Outlook by ICRA Lanka 

DFCC Bank was recently assigned an issuer rating of “[SL] AA- with Stable outlook” by ICRA Lanka Ltd. 

A media release by DFCC, said ICRA Lanka’s rating factors in DFCC Bank’s established track record as the pioneer development bank in Sri Lanka, healthy asset quality indicators, and the adequate capitalization profile. 

The bank has a strong corporate banking focus, with about 44% of the total portfolio comprising corporate lending as at June 2020. The rating also recognises the healthy asset quality indicators of the bank, with gross NPA (GNPA) of 4.8% as at June 2020, which was lower than the systemic average of 5.3%.The rating factors in the adequate capitalization profile of DFCC, with the Tier 1 capital adequacy ratio at 11.1% as at June 2020, above the regulatory requirement of 8.5%. The report also highlights that DFCC bank comfortably meets the minimum core capital requirement set by the Central Bank with a reported net worth of about Rs. 48 billion as at June 2020, against the regulatory minimum of Rs. 20 billion by December 2020.

Speaking of credit strengths, the report further highlights that the bank has an established track record of long term financing, as the first development bank in Sri Lanka, having been established in 1955, and as one of the pioneering development banks in the Asian region. The bank has a strong corporate banking focus, with about 44% of the total portfolio comprising corporate lending, followed by the SME and retail segments, contributing to 33% and 18% of the overall portfolio as at June 2020. 
As at June 2020, DFCC Bank has a total market share of about 4% in terms of the asset size, with a total asset base of about Rs. 435 billion. Currently, the bank has 140 branches, island-wide.