CRAB performed the rating surveillance based on audited financial statements up to 31st December 2010 and other relevant information. Commercial Banks rated ‘BBB’ have adequate capacity to meet their financial commitments. or However, changing Limited at “BBB3 “(pronounced triple B three) and 2006 2007 2008 2009 2010 Year Credit Portfolio (Mil. BDT) ? Gross NPL Ratio (%) PROFILE Bank”) was incorporated as public limited Rupali Bank Limited (hereinafter referred as “RBL” or “the company on 14 December 1986. Its shares are listed in the Dhaka Stock Exchange and Chittagong Stock Exchange.
After independence in March 1972 Rupali Bank Limited was constituted with the merger of 3 (three) erstwhile commercial banks i. e. Muslim adverse economic conditions circumstances are more likely to lead to a weakened capacity of the Commercial Banks to meet their financial commitments. “BBB” is subject to moderate credit risk. Commercial Banks rated ST-3 category are considered as average capacity for timely Page 1 of 17 CRAB I CRAB Ratings on Bank Credit Digest I March 29, 2012 CRAB Rating Report Bank Previous Ratings epayment of obligations, although such capacity may be impaired by adverse changes in business, economic, or financial conditions. Commercial Banks rated in this category are characterized with satisfactory level of liquidity, internal fund generation, and access to alternative sources of funds. Government support rating considers the government ownership of the bank. RBL is one of the systematically important state owned banks in the country. The ratings reflect the Bank’s improved asset quality, ability to accumulate low cost fund and adequate provision maintained.
Ratings also consider the Bank’s wide branch network having 492 branches across the country. However, ratings are constrained by high cost to income ratio, quality of the capital and weak MIS. Revenue structure of RBL in 2010 changed significantly and was dominated by net interest income (57. 64%) followed by investment income (23. 07%) whereas in 2009 investment income was 36. 80%. In 2010, investments income increased by 13. 1% driven by income from treasury bills and bonds. In 2010 although Bank’s net interest income increased by 20. 1%, net interest margin increased by 0. 0 percentage point because of shrinking spread. Net profit margin after tax decreased due to higher provision expense for pension benefit and taxes. Return on average assets decreased mainly because of stringent profit margin. The Bank’s leverage multiplier was 24. 8 times in 2010. The Bank’s return on average equity also became 14. 0% in 2010. Cost to income ratio of the Bank increased by 1. 11 percentage points due to growth in operating expense (22% growth) than that of operating income (19% growth). Staff cost to income ratio decreased by 0. 63 percentage points.
They differ from the highest-rated Commercial Banks only to a small degree. AA is judged to be of very high quality and is subject to very low credit risk. Commercial Banks rated ‘A’ have strong capacity to meet their financial commitments but are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than Commercial Banks in higher-rated categories. A is judged to be of high quality and are subject to low credit risk. BBB1, BBB 2, BBB3 Triple B (Adequate Capacity & Medium Quality) Commercial Banks rated ‘BBB’ have adequate capacity to meet their financial commitments.
However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the Commercial Banks to meet their financial commitments. BBB is subject to moderate credit risk. Commercial Banks rated ‘BB’ are less vulnerable in the near term than other BB 1, BB2, BB3 Double B (Inadequate Capacity & Substantial Credit Risk) lower-rated Commercial Banks. However, they faces major ongoing uncertainties and exposure to adverse business, financial, or economic conditions, which may lead to the Commercial Bank’s inadequate capacity to meet their financial commitments.