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Fitch Assigns Sampath Bank's Subordinated Debt Final 'A(lka)'
May 24, 2016 / 10:31 AM / 2 years ago

Fitch Assigns Sampath Bank's Subordinated Debt Final 'A(lka)'

(The following statement was released by the rating agency) COLOMBO, May 24 (Fitch) Fitch Ratings has assigned Sampath Bank PLC's (A+(lka)/Stable) Basel II-compliant subordinated debentures of up to LKR6bn a final National Long-Term Rating of 'A(lka)'. The final rating is the same as the expected rating assigned on 26 April 2016 and follows the receipt of documents conforming to information already received. The debentures will mature in five years and carry fixed and floating coupons. Sampath Bank plans to use the proceeds to strengthen its Tier 2 capital base. The debentures are to be listed on the Colombo Stock Exchange. KEY RATING DRIVERS The issue is rated one notch below Sampath Bank's National Long-Term Rating to reflect the subordination to senior unsecured creditors. Sampath Bank's rating reflects its lower capitalisation relative to that of its peers and relatively higher risk appetite, which offset benefits from the growth of its franchise. The Outlook is Stable. RATING SENSITIVITIES The rating on the proposed debentures will move in tandem with Sampath Bank's National Long-Term Ratings. Fitch views the upside potential of Sampath Bank's ratings as limited as long as the trend of higher risk-taking and declining capitalisation persists. A sharp decline in its asset quality could result in a rating downgrade. Contact: Primary Analyst Kanishka de Silva Analyst +941 1254 1900 Fitch Ratings Lanka Ltd 15-04, East Tower, World Trade Center Colombo 1, Sri Lanka Secondary Analyst Rukshana Thalgodapitiya, CFA Vice President +941 1254 1900 Committee Chairperson Sabine Bauer Senior Director +852 2263 9966 Date of Relevant Rating Committee: 7 July 2015 Sampath Bank has a 1.78% 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. Media Relations: Bindu Menon, Mumbai, Tel: +91 22 4000 1727, Email: bindu.menon@fitchratings.com. Note to editors: Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated 'AAA' and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as 'AAA(idn)' for National ratings in Indonesia. Specific letter grades are not therefore internationally comparable. Additional information is available on www.fitchratings.com Applicable Criteria Global Bank Rating Criteria (pub. 20 Mar 2015) here Additional Disclosures Solicitation Status here Endorsement Policy here ail=31 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 WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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