ICRA Lanka affirms issuer rating of [SL] AAA
ICRA Lanka Limited, a wholly owned subsidiary of ICRA Ltd., an
associate of Moody's Investors Service, has reaffirmed the Issuer Rating
of [SL] AAA (pronounced SL triple A)1 of ICICI Bank (Sri Lanka Branch).
This is the highest-credit-quality rating assigned by ICRA Lanka and the
rated entity carries the lowest credit risk. The rating in Sri Lanka is
assigned on an eight-point scale developed specifically for the country
and ranges from '[SL] AAA' to '[SL] D'. This rating scale ranks the
relative default risk associated with issuers in Sri Lanka.
The rating factors in strong financial and operational support from
the parent ICICI Bank (rated [ICRA] AAA/Stable), comfortable
capitalization levels with a large proportion of the assets being
deployed into Sovereign Securities/cash equivalents. The credit
strengths are partially offset by small scale of the Sri Lankan
operations, modest profitability and high credit concentration in the
ICICI Bank (Sri Lanka branch) commenced operations in January 2006
with focus on retail lending and remittance business. Subsequently, in
line with the bank's global strategy, retail assets operations were
curtailed CY2008 onwards. The bank's focus remains on corporate lending
for India linked local corporates and reputed local companies.
The current retail portfolio is less than 1% of total advances
running down from business carried out till 2008.
Total assets stood at Rs. LKR 10,831 million as on June 30, 2012 with
the loan book accounting to LKR 2,643 million, while bulk of the
remainder of the assets were deployed in liquid investments (government
securities and interbank lending).