BOC’s international ratings further upgraded two notches by Fitch

Bank of Ceylon’s (BOC) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) have been upgraded to ‘CCC+’ from ‘CCC-’ by Fitch Ratings (Fitch) in their latest rating review. Further, the Viability Rating (VR) was also upgraded to ‘ccc+’ from ‘ccc-’ and affirmed Short-Term IDR at ‘C’. 

According to the latest announcement made by Fitch upgrading BOC’s international ratings, Fitch has considered the following factors in order to support their rating action; 

Fitch highlighted that the successful completion of debt restructuring has reduced sovereign-related stress on Sri Lankan banks’ operating environment and as well as on BOC’s overall credit profile. In terms of bank’s risk profile, it is expected that the conclusion of sovereign debt restructuring and the bank’s focus on expanding private-sector lending will moderate the exposure to the sovereign in the medium term.

Fitch has further upgraded BOC’s business profile score considering the bank’s continued strong market position as the largest bank in Sri Lanka and the potentials to expand the business fostered by the improved operating environment. The bank’s profitability will be further improved in line with the finalised restructuring terms and conditions of sovereign instruments. 

Moreover, foreign currency funding and liquidity score of the bank has upgraded reflecting the significant improvement in the liquidity profile and will be further strengthen with the restoration of the sovereign’s creditworthiness, subsequent to the successful debt restructuring and thereby providing the bank, the access to foreign currency wholesale funding.

The asset-quality of the bank will be further enhanced due to better economic conditions of the country and the potential capacity of the Bank to enrich its credit portfolio. Additionally, Fitch has noted that the reduced risk of sovereign default and the stabilising economy alleviate solvency risk for BOC and thus, revised upward the bank’s capitalisation and leverage score. 

BOC, being the No. 1 bank in Sri Lankan banking industry, its commitment goes beyond mere financial transactions and extends to building lasting relationships, fostering financial empowerment and steering the economic growth.

Envisioning to be “Nation’s preferred financial partner” for customers and by offering innovative financial solutions and unwavering support for economic stability and growth over eight decades as “Bankers to the Nation”, BOC has continuously interacted with individuals from diverse roots in Sri Lanka, demonstrating a steadfast commitment to generate value for all stakeholders. 

With an extensive footprint comprising of a network of over 2,200 direct customer touchpoints, including fully-equipped and mobile branches, SME centres, ATMs and CRMs island-wide, the bank promotes financial inclusion across the country. The Bank also has overseas presence in Chennai, Maldives, and Seychelles, a limited services branch in Hulhumale and operates a fully-owned subsidiary in London, United Kingdom.

As per the published financials for 3Q-2024, BOC has demonstrated an impressive financial performance, achieving a Profit Before Tax (PBT) of Rs. 37.6 billion with 66% YoY growth during the first nine months of 2024, illustrating the Bank’s resilience in challenging economic environment. 

Further, the bank has recorded a robust financial position, with total Assets amounting to Rs. 4.6 trillion and total Deposits of Rs. 4.0 trillion. Notably, Gross Loans and Advances amounted to Rs. 2.3 trillion, and total Investments amounted to Rs. 2.1 trillion. 

The bank has preserved Capital Adequacy ratios and Liquidity ratios well above the statutory requirements at the end of 3Q-2024.