Fitch Ratings has affirmed the National Long- Term Rating of Pan Asia Banking Corporation PLC (PABC) at ‘BBB-(lka)’. The Outlook is Stable.
The rating also reflects the bank’s limited domestic franchise and its predominant exposure to vulnerable economic segments. Sri Lankan banks’ operating environment (OE) continues to show signs of stabilisation, evident from the sustained improvements in reported headline macroeconomic indicators, supporting the recovery in banks’ operational flexibility.
Further improvement to the banks’ OE remains contingent on successful execution of the sovereign’s external debt-restructuring exercise alongside the restoration of the sovereign’s creditworthiness, given the strong link between the sovereign’s financial health and the banks’ operating conditions.
“We expect the stabilising economic conditions to support PABC’s ability to generate and defend business volume but its business profile remains constrained by the weak, but stable, OE.”
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