RAM Rating Lanka becomes Lanka Rating Agency

Ceylon FT: RAM Ratings Lanka has changed its name to Lanka Rating Agency after RAM Holdings divested its stake and several local banks invested in the firm.

"With the divestment of RAM Holdings and the entry of local shareholders such as Hatton National Bank PLC, Commercial Bank PLC, Sampath Bank PLC, NDB Bank PLC and additional technical assistance from a global rating agency, the company is adopting a brand identity, which illustrates our commitment to Sri Lanka. The company will henceforth be known as Lanka Rating Agency (LRA), which is essentially a domestic credit rating agency with global expertise similar to many other domestic rating agencies in Asia and Europe," the ratings agency said in a statement.

"There would be no changes to the currently adopted standards, while there will also be no changes to the ratings issued previously," it said.

In 2014, RAM Ratings (Lanka) Ltd., (RAML), which was formally known as Lanka Rating Agency (LRA) Limited completed 10 years of service within the Sri Lankan economy.

Over the years RAML has become a significant player in the credit rating industry of the nation. RAM Rating Services Berhad (RAMRS) is the premier domestic rating agency in Malaysia, which facilitated the development of domestic bond markets in Malaysia and with that expertise LRA was set up in Sri Lanka in 2003 with the intention of developing the country's bond market. Given the circumstances within the Asian financial markets RAMRS provided training, advice and guidance, while instilling the RAM brand within the country. With the end of the northern conflict and the improvement in the domestic bond market RAM Holdings initiated proceedings to hand over management of the organization to local professionals who were trained to lead a truly domestic rating agency similar to CRISIL of India, RAMH of Malaysia, TRIS of Thailand and Japan Credit Rating Agency of Japan. RAML is the only rating agency in Sri Lanka who is a full member of Association of Credit Rating Agencies Asia (ACCRA), which is an association of 30 rating agencies in Asia from 13 countries formed with Assistance of Asian Development Bank (ADB) to develop the domestic bond markets in Asia in 2001.
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Sri Lanka's Amaya Leisure buys East Coast hotel

May 01, 2014 (LBO) - Amaya Leisure Plc, a unit of Sri Lanka's Hayleys group said it bought 51 percent of Sun Tan Beach Resorts (Pvt) Ltd, which owns a hotel in Sri Lanka's East Coast for 563 million rupees.

"This is a 125 room resort located at Passikudah, and would complement the rest of the Amaya chain of hotel," chairman Mohan Pandithage said in a statement.

Sun Tan Beach Resorts was earlier branded Centara Passikudah Resorts and Spa, according to its website.

New resorts came up in Sri Lanka's eastern coast after the end of a 30-year war in 2009. 

The east is sunny when key beach areas in the Western and Southern coast are struck by seasonal monsoon rains after April.

But travelling to the East is time consuming and more expensive.

Sri Lanka's Seylan Bank maintains profits amid falling rates

May 01, 2014 (LBO) - Profits at Sri Lanka's Seylan Bank group rose 3.3 percent to 526 million rupees in the March 2014 quarter from a year earlier, helped by lower interest expenses, despite falling credit growth, interim accounts showed.

The group reported earnings of 1.53 rupees per share. The stock closed at 64.00 rupees, up 1.80 Wednesday.

The bank said interest income rose 0.2 percent to 5.8 billion rupees in the March quarter from a year earlier, but interest expenses fell 7.6 percent to 3.4 billion rupees expanding gross profits 13.7 billion rupees to 2.4 billion rupees.

Customer loans fell 3.4 percent to 131 billion rupees.

Sri Lanka is recovering from a balance of payments crisis, triggered by a credit bubble worsened by state banks loans given to subsidize electricity.

After raising interest rates and energy prices, Sri Lanka is recovering from the crisis, interest rates are falling but credit growth is still weak.

Gross non performing loans rose to 11.68 percent by end March at stand alone bank level from 10.58 percent in December 2013. Non performing loans after provisions rose to 8.72 percent from 7.94 percent.

Loan losses rose to 198 million rupees from a provision reversal of 53 million rupees, a year earlier.

Analysts say a period of de-leveraging and purging of risky loans given during the bubble period is necessary for the banking system to bounce back.

Sri Lankan banks lent heavily against gold at a time when global gold prices bubbled. But gold prices have since fallen and banks have cut exposure to the segment.

Seylan's gold backed loans fell to 11.1 billion rupees by end March from 14.3 billion rupees in December. Overdrafts rose to 40.6 billion rupees, from 38.9 billion rupees and other loans fell to 45.6 billion rupees from 47.8 billion rupees.

But financial instruments available for sale rose 55 percent to 21 billion rupees.

As loan expansion slows or shrinks, banks will buy into Treasuries, helping bring down rates.

Fees and commission income rose 10 percent to 513 million rupees. Trading income rose 128 percent to 241 million rupees with forex gains rising 54 percent to 135 million rupees.

Customer deposits grew to 170 billion rupees from 167 billion rupees.

Net assets fell 0.65 percent to 24.03 billion rupees, while gross assets rose 2.4 percent to 222 billion rupees at group level.

Capital adequacy was maintained at 14.69 percent of risk weighted assets by end March from 14.58 percent in December.