The downgrade of BOC’s Long-Term IDR and Viability Rating stems from the 27 November 2020 downgrade of the sovereign IDR to ‘CCC’, from ‘B-‘ and Fitch’s assessment of the operating environment.
BOC’s Long-Term IDR is driven by the bank’s intrinsic strength, as expressed by its Viability Rating. The ratings are constrained by the sovereign IDR.The downgrade and negative outlook on risk appetite and most of the financial profile factors reflect the downside risks to borrowers’ creditworthiness and the stability of the bank’s financial metrics stemming from the operating environment.
The two Non-Executive Directors, Lalith Withana and Hasitha Premaratne, have resigned from the board of directors of Bank of Ceylon (BOC), with effect from December 8, 2020.
Both Withana and Premaratne were appointed to the BOC board on January 14, 2020.
The downgrading of BOC and resignation of two directors took place amidst the better performance of the state bank amidst COVID-19 pandemic, a senior official said, expressing his dismay on the resignations of the two eminent directors of the bank.
Bank’s asset base increased by 15% to LKR 2.8 trillion as at the end of August 2020 from LKR 2.4 trillion as at the end of 2019.
Deposits of the bank were LKR 2.2 trillion by the end of August 2020, being the first Sri Lankan Bank to surpass the LKR 2 trillion landmarks, treasury data showed.
BOC recorded a profit before tax of LKR 12.9 billion in the first eight months of 2020, compared to the profit before tax of LKR 18.1 billion in the same period of 2019.
This was mainly due to accounting for the day one loss on COVID -19 moratorium and the increase in interest expenses in line with the growth of the deposit base