BB CAMELS rating
StanChart, Citibank, SBI, Prime slip from top position
Four banks, including multinational Standard Chartered and Citibank NA, slipped from the top position in the latest CAMELS rating of the Bangladesh Bank.
The composite CAMELS (capital adequacy, asset quality, management, earning, liquidity and sensitivity) rating for July–December 2011 showed that StanChart, Citibank, State Bank of India and local Prime Bank had slipped down the strong category to the satisfactory category, or the second place, sources in private banks said.
The four banks along with Hongkong and Shanghai Banking Corporation and Commercial Bank of Ceylon topped the rating in January–June 2011.
The HSBC and the CBC managed to retain their
position in the latest rating while no bank made any progress.
Local private bank First Security Islami Bank slipped down to the third place or the fair category from the second place.
The central banks prepares the rating every six months based on the overall performance of the banks that included capital adequacy ratio against risk weight assets, quality of assets such as loan and advances, management, earning, liquidity including credit-deposit ratio and sensitivity to market risk.
Twenty-eight other private and foreign commercial banks and the state-owned BASIC Bank retained their second place.
Of them, Social Islami Bank and Al-Arafah Islami Bank, however, were placed in the ‘early warning’ category for their poor performance.
Central bank officials said that the two banks were at risk of becoming ‘problem banks’ if they could not better their performance.
‘Problem banks’ ICB Islamic Bank and Bangladesh Commerce Bank, on other hand, failed to upgrade their position.
State-owned Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank and Bangladesh Development Bank, National Bank of Pakistan and Bank Al-Falah continued to remain in third position.
State-owned specialised banks Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank also failed to upgrade from fourth position, or the marginal category, the rating showed.
A commercial bank official said that the prevailing liquidity crisis, increased classified loans, downtrend in credit-adequacy ratio against risks weight assets had hit the CAMELS rating of the banks.
Local and global economical crisis is, however, one of the main causes for the downgrading of the banks, he said.
Sources in Prime Bank said that the bank was in the top position in liquidity ranking in January–June 2011 but the ranking slipped in the latest rating.
Bangladesh Bank call money data showed that Prime Bank had borrowed a large amount of money from call money market in the second half of 2011.
The CAMELS rating analysis showed that the Standard Chartered Bank had also faced liquidity pressure.
The bank’s rating for skills in management was also downgraded by one notch from the top position, which was one of the vital causes of its downgrading from the first place.
In the second half of 2011, Citibank slipped by one notch for its capital adequacy ratio, asset quality and advance-deposit ratio.
Asked about the downgrading from the first place in CAMELS rating, Bitopi Das Chowdhury, head of corporate affairs at Standard Chartered Bank, told New Age that it was not a public rating and was very confidential. ‘There is no scope for discussion about the rating in public.’
The Prime Bank managing director, Md Ehsan Khasru, also declined to comment on the ranking of the bank.
-With New Age input
