DFCC Vardhana Bank’s AA- rating reaffirmed

DFCC Vardhana Bank (DVB) continues to uphold its status as one of Sri Lanka’s fastest growing banks.

Fitch Ratings Lanka re-affirmed the bank’s National Long-Term Rating of AA-(lka) (Stable Outlook) with DVB’s subordinated debentures also rated at A+(lka).

DVB has sustained this rating consistently over the past nine years. The company is 99.12% owned by DFCC Bank, which has strategically helped the DFCC Group to expand their product offering. Operationally merged in 2011, DVB accounts for 39% of the group assets and 76% of deposit funding for the first quarter ended in March 2012.

Commenting on the rating affirmed by Fitch, DFCC Vardhana Bank CEO Lakshman Silva said: “2012 has been a challenging year for the banking sector thus far but we have managed to retain our rating. DVB’s capacity to meet its financial commitments is a direct result of our prudent business practices. Making the bank one of the most secure places to invest their hard-earned money for our existing customers and potential ones is a philosophy we will always abide by. Re-affirmation of our AA-(lka) (Stable Outlook) is an independent and fair confirmation of our stability.”

DVB recorded an outstanding loan growth of 75% which was above the 43% increase in the banking sector in 2011. This growth was supported by DVB’s increased outreach and marketing efforts, improved customer confidence and business focused on the corporate and retail segment of the market.

As stated by Fitch, DVB has maintained its capitalisation at comfortable levels despite the high loan growth during the year. The bank’s conservative provisioning policy and large capital buffer available will be able to absorb any potential loan losses.