Fitch affirms Merchant Bank & Finance at ‘BBB+(lka)’; Outlook Stable

Fitch Ratings has affirmed Merchant Bank of Sri Lanka & Finance PLC (MBSL) National Long-Term Rating at ‘BBB+(lka)’. The Outlook on Stable.

MBSL is 84.5% owned by Bank of Ceylon (BOC, A(lka)/Stable) and other BOC group entities. BOC is the largest banking group in the country.

“MBSL’s rating is driven by our expectation that its parent, Bank of Ceylon PLC, would provide extraordinary support to MBSL, if required. The rating is anchored by BOC’s National Long-Term Rating, which reflects its stand alone credit profile and ability to support MBSL. It also takes into account BOC’s 84.5% ownership of MBSL, its history of providing equity support, its control over MBSL’s policies and strategies through board representation, and known links between BOC and MBSL,” Fitch said.

MBSL mainly serves high-yielding and under-banked customers that are outside BOC’s target market.

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