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Fitch raises outlook on Sri Lanka's BOC, NSB and People's Leasing

Feb 15, 2017 13:51 PM GMT+0530 | 0 Comment(s)

ECONOMYNEXT - Fitch Ratings had raised the outlook on state-run Bank of Ceylon, National Savings Bank and Peoples Leasing Plc, a unit of a People's Bank to 'stable' from 'negative' after the sovereign rating outlook was hiked.

Sri Lanka has a 'B+' international ratings.

BOC and NSB has a 'B+' rating from Fitch and PLC one level lower at 'B'.

The full statement is reproduced below:

Fitch Revises Outlook to Stable on Three Sri Lankan Financial Institutions

Fitch Ratings-Singapore/Colombo-15 February 2017: Fitch Ratings has revised the Outlook on Sri Lanka-based Bank of Ceylon (BOC, B+/Stable), National Savings Bank (NSB, B+/Stable) and People's Leasing & Finance PLC (PLC, B/Stable) to Stable from Negative and affirmed their Long-Term Issuer Default Ratings (IDR).

  The rating action follows the 9 February 2017 Outlook revision on Sri Lanka's sovereign rating (B+/Stable) to Stable from Negative. See Fitch Affirms Sri Lanka at 'B+'; Outlook Revised to Stable.

The lenders' National Long-Term Ratings have not been reviewed at this time. A full list of rating action is at the end of this commentary.

KEY RATING DRIVERS

  IDRS, NATIONAL RATINGS AND SENIOR DEBT

The IDRs, Support Rating and Support Rating Floors of BOC and NSB reflect Fitch's expectation of extraordinary support from the sovereign. Their ratings are equalised with the sovereign. Fitch sees state support for BOC stemming from its high systemic importance and quasi-sovereign status while state support for NSB stems from its policy mandate.

PLC's ratings differ by one notch from those of the sovereign, as we expect sovereign support to flow through its parent, the state-owned and systemically important People's Bank (Sri Lanka) (AA+(lka)/Stable).

  The Stable Outlook on the IDRs of BOC, NSB and PLC reflect the Stable Outlook on the sovereign's rating.

RATING SENSITIVITIES

Changes to the sovereign rating or perception of state support to BOC and NSB could result in a change in the lenders' ratings. PLC's ratings are also sensitive to changes in the sovereign rating, as this would affect People's Bank's ability to provide support to its subsidiary. PLC's ratings are also sensitive to People's Bank's propensity to provide support.

The rating actions are as follows:

BOC

  Long-Term Foreign-Currency IDR affirmed at 'B+'; Outlook revised to Stable from Negative

Long-Term Local-Currency IDR affirmed at 'B+'; Outlook revised to Stable from Negative

  Short-Term Foreign-Currency IDR affirmed at 'B'

  Support Rating is '4'

Support Rating Floor is 'B+'

US dollar senior unsecured notes affirmed at 'B+'; Recovery Rating at 'RR4'

National Savings Bank

Long-Term Foreign-Currency IDR affirmed at 'B+'; Outlook revised to Stable from Negative

  Long-Term Local Currency IDR affirmed at 'B+'; Outlook revised to Stable from Negative

Short-Term Foreign-Currency IDR affirmed at 'B'

  Support Rating is '4'

  Support Rating Floor is 'B+'

US dollar senior unsecured notes affirmed at 'B+'; Recovery Rating at 'RR4'

People's Leasing & Finance PLC

Long-Term Foreign-Currency IDR affirmed at 'B'; Outlook revised to Stable from Negative

Long-Term Local-Currency IDR affirmed at 'B'; Outlook revised to Stable from Negative

 


 

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