Lankaputhra Development Bank assigned long term 'A' rating

RAM Ratings Lanka has assigned respective long and short-term financial institutions ratings of A and P1 to Lankaputhra Development Bank Limited ("LDB" or "the Bank"). The ratings are primarily based on the Bank's State ownership and its strategic importance vis-a-vis the Government's economic development agenda. The ratings are, however, constrained by the Bank's short operating history and large risk appetite.

LDB is a licensed specialised bank ("LSB") created by the Government as part of President Mahinda Rajapaksa's new economic vision of promoting the development of domestic enterprises. LDB focuses on providing funding to start small and medium-scale enterprises ("SMEs"), a segment overlooked by other banks due to the inherently higher risk. LDB was incorporated in 2006. Following Cabinet approval; it merged with two other state-backed development finance institutions in 2008.

The Bank's strategic direction is guided by its Chairman, A. Sarath de Silva, who has over three decades experience in the banking sector, having also served as General Manager in Sri Lanka's largest commercial bank, Bank of Ceylon.