February 15, 2017 / 7:55 AM / a year ago

Fitch Revises Outlook to Stable on Three Sri Lankan Financial Institutions

(The following statement was released by the rating agency) SINGAPORE/COLOMBO, February 15 (Fitch) 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 <a href="https://www.fitchratings.com/site/pr/1018762">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 Contact: Primary Analyst Ambreesh Srivastava (International ratings on BOC, NSB and PLC) Senior Director +65 6796 7218 Fitch Ratings Singapore Pte Ltd One Raffles Quay South Tower #22-11 Singapore 048583 Secondary Analyst Rukshana Thalgodapitiya (International ratings on BOC and PLC) Vice President +941 1254 1900 Dilranie Mudannayake (International ratings on NSB) Analyst +941 1254 1900 Committee Chairperson Sabine Bauer Senior Director +852 2263 9966 Media Relations: Bindu Menon, Mumbai, Tel: +91 22 4000 1727, Email: bindu.menon@fitchratings.com; Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com. Additional information is available on www.fitchratings.com BOC and People's Bank each have a 1.79% equity stake in Fitch Ratings Lanka Ltd. No shareholder other than Fitch, Inc. is involved in the day-to-day rating operations of, or credit reviews undertaken by, Fitch Ratings Lanka Ltd. Applicable Criteria Global Bank Rating Criteria (pub. 25 Nov 2016) here Global Non-Bank Financial Institutions Rating Criteria (pub. 15 Jul 2016) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here _id=1019007 Solicitation Status here Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. 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