- Certificate of deposit programme Rating : P1 (reaffirmed)
The 'P1' (pronounced P one) rating for the Certificate of Deposit Programme of the Development Credit Bank Ltd. (DCB) has been reaffirmed.
The rating reflects DCB's favourable capital adequacy ratio, stable interest spreads and liquidity support on account of significant investment in government securities (in excess of SLR requirements). This is partly offset by challenges faced in mobilising low cost resources, average quality of the loan assets and a relatively high market risk on the banks' investment portfolio which has resulted in volatility in the earnings.
DCB was converted to a private sector commercial bank in mid 1995. As a cooperative bank earlier, DCB primarily catered to traders and small business. However, over the past few years, the bank has diversified its lending operations to cater to small and medium sized corporates. As at March 31, 1999, the bank asset base is around Rs. 23597 mn of which around Rs. 5810 million is in form of government / trustee securities. The bank reported a PAT of Rs 213 mn in the year 1998-99.