Commercial Bank’s Bangladesh operations upgraded to AAA

The Bangladesh operations of Commercial Bank PLC have been upgraded to AAA (triple A) for long-term credit and reaffirmed as ST-1 for short- term credit by Credit Rating Information and Services Ltd. (CRISL).

This upgrade follows the AA + ratings received by the bank’s Bangladesh operations for the past three consecutive years from CRISL.

Banks in the triple A category are adjudged to be of best quality, offer highest safety and have highest credit quality. Risk factors are negligible and risk free, nearest to risk-free Government bonds and securities. Changing economic circumstances are unlikely to have any serious impact on this category of banks.

The ratings are based on financial performance of Commercial Bank up to 31 December 2010 and other qualitative and quantitative information relevant to the date of rating, 28 June 2011. This includes the bank’s continuous maintenance of strong fundamentals in the area of capital adequacy, asset quality, financial and operating efficiency and risk management.  CRISL has stated that it has viewed the bank with ‘Stable Outlook,’ believes that bank will be able to maintain its strong fundamentals in future, and does not foresee any volatility in the operation of the bank within the validity period of rating.

“The Bangladesh operation has always justified the Bank’s decision to venture beyond Sri Lanka,” Commercial Bank’s Managing Director Amitha Gooneratne said, disclosing that in 2010 the bank’s Bangladesh operations had grown even faster than the Sri Lankan operation and had contributed 15 per cent of bank’s net profit of Rs 5.5 billion. “The population of Bangladesh is around 150 million and we believe that our operations will grow from the 17 branches we have at present to be as large as our operation in Sri Lanka a decade from now,” Gooneratne added.

CRISL has evaluated the financial performance of the Commercial Bank in terms of Return on Average Asset (ROAA), Return on Average Equity (ROAE) and Net Interest Margin (NIM). The overall financial performance of the bank has improved in 2010 as evident from key profitability indicators.

The net profit before tax and provision in FY 2010 stood at TK. 852.64 million against TK. 659.49 million in FY 2009 registering 29.29 per cent growth. Net profit after tax stood at TK.464.41 million at FY 2010 against TK 373.97 million at FY 2009 representing a 24.18 percent growth.

Commercial Bank acquired Credit Agricole lndosuez (CAl) operations in Bangladesh in 2003. Since then, the Bank’s operations in Bangladesh have grown to seventeen outlets.   Currently, Commercial Bank is the fourth largest foreign bank in Bangladesh and one of the top international financial institutions in the country.

The Commercial Bank in Bangladesh has been awarded the CSR Award 2008-09 by The Bankers Forum in Bangladesh. In recognition of its outstanding performance in 2006, the bank was presented The Financial Mirror – Robintex Business Award in 2007. The bank also won the Financial News Services (FNS) Business Award 2005 for the ‘Best Performing Foreign Bank’ in Bangladesh and the ICMAB, National Best Corporate Award in 2007 and 2009.