Fitch Ratings Lanka Limited, Colombo – 20 January, 2006: Fitch Ratings Lanka Ltd ("FRL") has affirmed the'AA(sri)'  national Senior Unsecured Long-term rating of DFCC Bank  ("DFCC").  The rating outlook is stable. The 'AA(sri)' rating denotes a very low expectation of credit risk. It indicates a very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.

DFCC's rating reflects its long and sound operating history, good asset quality, strong capital base but also its greater exposure to riskier project lending and less diversified funding base.
A large share of DFCC's earnings are still derived from project lending though FRL recognises the bank's initiatives to diversify its income sources.  Apart from its investment in Commercial Bank in which DFCC owns 29.76% of voting equity, DFCC acquired MERC Bank, a small Licensed Commercial Bank, renamed DFCC Vardhana Bank (rated 'AA-(sri)' by FRL) in 2003.  Subsequent to the acquisition, the group is now in a position to offer a wider range of banking products and services.