Fitch affirms DFCC Bank at 'AA(lka)'

Fitch Ratings Lanka has affirmed DFCC Bank's (DFCC) National Long-term rating at 'AA(lka)'.

The agency has also affirmed DFCC's senior debentures at 'AA(lka)' and subordinated debentures at 'AA-(lka)'.

The outlook remains stable.

DFCC's ratings are driven by its strong capitalisation supported by ongoing high profitability. However, the ratings also take into account DFCC's relatively high exposure to riskier project finance and the challenges in securing long-term funding for its longer tenure project loans.

The affirmation of DFCC's ratings comes on the back of the ongoing, albeit gradual economic recovery, which together with increased recovery efforts helped ease non-performing loan (NPL) pressures faced by the bank in 2008-2010.