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20 % of Bank of Ceylon’s entire loan book to CPC Vote_lcap68%20 % of Bank of Ceylon’s entire loan book to CPC Vote_rcap 68% [ 178 ]
20 % of Bank of Ceylon’s entire loan book to CPC Vote_lcap18%20 % of Bank of Ceylon’s entire loan book to CPC Vote_rcap 18% [ 47 ]
20 % of Bank of Ceylon’s entire loan book to CPC Vote_lcap13%20 % of Bank of Ceylon’s entire loan book to CPC Vote_rcap 13% [ 35 ]

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FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » 20 % of Bank of Ceylon’s entire loan book to CPC

20 % of Bank of Ceylon’s entire loan book to CPC

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sriranga

sriranga
Co-Admin
The loss-making Ceylon Petroleum Corporation (CPC) represents 20 per cent of the Bank of Ceylon (BOC)’s loan book (portfolio).

According to Fitch Ratings, the BOC’s loan book has a high exposure to the state and state-owned entities (SOE) and while a sizeable portion of the exposure is state guaranteed, the resulting concentration risk is significant.

The rating agency’s comments came in a statement announcing that it had affirmed BOC’s Long-Term (LT) Foreign Currency (FC) and Local Currency (LC) Issuer Default Ratings (IDRs) at ‘BB-’ with a Stable Outlook.

The agency has also affirmed BOC’s Viability Rating (VR) at ‘b+’ and its National LT rating at ‘AA+(lka)’ with a Stable Outlook.

“BOC’s LT IDRs are driven by the Government’s high propensity and limited ability to provide support to the bank under extraordinary situations,” Fitch said.

The rating agency said the state’s high propensity stems from BOC’s systemic importance as the largest bank in the country (accounting for nearly 20 per cent of banking system deposits and assets), its quasi-sovereign status, its role as a key lender to the Government and full government ownership, while the State’s limited ability is reflected in the ‘BB-’/Stable Sovereign rating.

BOC’s gross non-performing loan (NPL) ratio weakened to 2.8 per cent from 2.1 per cent in 2011 owing to one-off event risks such as floods and drought and the Maldives’ political turmoil.

Fitch said any change in Sri Lanka’s Sovereign rating or the perception of state support to BOC could result in a change in BOC’s IDRs and National Ratings.
http://www.sundaytimes.lk/130331/business-times/20-of-bank-of-ceylons-entire-loan-book-to-cpc-38617.html

http://sharemarket-srilanka.blogspot.co.uk/

rainmaker


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
This is not really a problem. People have to take this in the context that CPC is the biggest customer and the single largest revenue collector. CPC is so big that they could basically start their own bank.

If we take the latest public results and extrapolate for growth in the last 5 years the CPC gross revenue should be at least 500 Billion LKR by now.

We could also estimate the CPC's revenue by looking at the oil import bill of US$5 Billion in 2012.





smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
But would CPC pay back their loans in near future? Or they'll make it to a 20 year old loan?

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